Pros and Cons of Bitcoin Payments for Small Businesses

Pros and Cons of Bitcoin Payments for Small Businesses

Bitcoin is now more than a decade old. The price of this cryptocurrency has increased over the years. But before you accept bitcoin payments in your small business, you want to know its pros and cons. For some people, accepting payments through cryptocurrencies might not be a wise move. Still, small business owners should consider these pros and cons before choosing this cryptocurrency.

Pros and Cons of Bitcoin Payments for Small Businesses

Benefits of Bitcoin Payments
Faster payments

Cross-border payments for businesses are slow, with options like checks and banks taking several days. And some countries do not accept all payment options. However, with Bitcoin, people can send and receive money from anywhere in the country. That’s because it’s a peer-to-peer payment method. And no third party is involved in this system. In addition, bitcoin transactions only take minutes. All a user needs is a digital wallet.

Low transaction fees

Transaction fees for other methods are high. For example, PayPal can charge more than 4%. Payment processors also charge setup fees, or transaction fees, which they add to every completed payment. Bitcoin exchanges, on the other hand, charge less than 1% per transaction. And there are no fees for peer-to-peer transactions. All a user needs is a crypto wallet.

No chargebacks

With most payment methods, small businesses are at risk of chargebacks when receiving money from credit cards. With Bitcoin, however, this is not a cause for concern. This is because third parties cannot return payments. Only the merchant can decide whether to return the money.

Bitcoin can be an investment

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Many people use platforms like Crypto Code to buy and sell Bitcoin. Such platforms help people who want to use Bitcoin as an investment but don’t know much about it. You can visit Crypto Code ‘s BitQT to sign up and start trading.

A small business can allow customers to pay with bitcoin and then convert the cryptocurrency into fiat money. Alternatively, the company can hold bitcoin indefinitely and wait for its price to increase. The company can store the value and then later sell bitcoin for a profit. Although this could attract capital gains taxes, the company cannot pay them until it sells the asset.

Inflation does not affect bitcoin

Inflation causes fiat currencies to fall in value. That’s because a government can choose to print more of it, resulting in a depreciation in value over time. But, Bitcoin has a limit of 21 million. That means its capacity is limited. Consequently, capping bitcoin can be the hedge against inflation.

Monetary diversification

People of older generations know how to diversify their wealth. And many investors always live by this philosophy. And that meant people held currencies for multiple countries and exchanged them on various international exchanges. Bitcoin contributes to this diversification. And Bitcoin owners can use this currency as an investment and to pay.

Disadvantages of Bitcoin payments
market volatility

Cryptocurrencies are unregulated. Authorities around the world are looking for ways to regulate cryptocurrencies. But until now, various market forces are affecting the bitcoin price. And this price fluctuates a lot. If the bitcoin price falls before you exchange it for fiat money, you could lose your value.

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security concerns

Hackers have stolen a significant amount of money after hacking crypto exchanges. Bitcoin may seem like a safe payment method. However, users should be careful and use reliable and safe crypto exchanges. Also, they should store their bitcoin in the safest digital wallets.

Unrecoverable wallet addresses

If your small business loses the digital wallet key, it is impossible to recover. This is because cryptographic access or wallet addresses have no central record. Only the wallet has the access key. That means you have to secure it. And if you lose your wallet, you lose all the Bitcoin in it too.

Bitcoin payments have advantages and disadvantages for small businesses. Therefore, you should do your due diligence before accepting this cryptocurrency as a payment method.

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