Pros and Cons of Accepting Cryptocurrency Payments for Your Business

Accepting cryptocurrency payments has its advantages and disadvantages. We’ll take a look at the pros and cons and in this article.

Crypto Markets Continue to Grow

In 2023, the size of the cryptocurrency payment gateways market was estimated to be $1.2 billion. This figure is projected to grow to $4.4 billion by 2032, indicating an increasing adoption of cryptocurrency payments by businesses globally. 

Specifically, the global bitcoin (BTC) payments market is expected to grow to about $36 billion by 2033. In 2023, it was just $1.6 Billion. The annual growth rate between 2023 and 2033 was projected to be 36.5%.

“Today you can buy a Starbucks coffee and book a holiday using cryptocurrencies“

The increase in businesses accepting cryptocurrency payments is driven by several factors. Consumers are rapidly accepting crypto as a store of value and a valid payment method, both for cross-border payments and at home.

Which Industries and Businesses Accept Cryptocurrency Payments?

Let’s take a look at some industries and examples of companies already accepting cryptocurrency payments.

A recent study revealed that the e-commerce and retail industry has the highest number of companies accepting crypto payments – 76 to be specific.

These include stores like Adidas, H&M and Etsy. Here are some other industry examples:

• Food and Beverages, with 72 companies. Examples include Hard Rock Cafe, Chipotle and Dominos.
• Travel and Hospitality, with 38 companies, including Norwegian Air, LunaJets and cruise companies like Princess Cruises.
• Luxury retail, with 35 companies including popular brands like Gucci.
• Internet and Online services, with 35 companies.

Pros and Cons of Cryptocurrency Payments

Should businesses accept cryptocurrency payments?

There is a general belief that businesses need to get on board to avoid being left behind. But a close look at the pros and cons could help you make a decision:

Pro 1 – Low Transaction Fees

While banks and traditional payment processors tend to charge high fees of up to 3.5%, most crypto transactions have zero fees. But if crypto transactions have fees, they can be as low as 1%.

In large-scale transactions, such as a small percentage of transactions fee charges can translate to a huge impact. Businesses accepting crypto payments would enable their customers to save money, driving sales further.

Pro 2 – Customer Loyalty

Some currencies have such a loyal following online. For instance, no fiat currencies have an enthusiastic following of young men excited to read through blog posts, YouTube videos, and white papers. But cryptocurrency has such a hold on people.

Although the enthusiasm is based on the possibility of making it huge with crypto, businesses can harness this loyalty. Accepting cryptocurrency payments shows these people that your brand is inclusive of them. In turn, the crypto communities reward with loyalty.

Pro 3 – Diversification

Providing more payment methods increases the number of individuals who can easily purchase from you. Additionally, your business will give access to a significant population size of unbanked individuals.

According to a World Bank report on financial inclusion, about 1.4 people are unbanked globally. This is a sizable market to tap into.

Pro 4 – Enhanced Security

From a customer perspective, cryptocurrency payments offer an extra layer of anonymity and security. This matters to an increasing number of consumers, particularly those concerned about protecting their digital identity.

However, it’s also increasingly clear that blockchain solutions are having countless cybersecurity benefits for businesses in general.

Con 1 – Volatility

The exchange rate between USD and EUR has pretty much stayed the same for months. But with cryptocurrencies, this is not the case.

Bitcoin for instance can be worth $60,000 and decline to be valued at $30,000 a month later. With such massive fluctuations, businesses accepting payments in crypto and holding them can experience huge losses. Volatility could also make product pricing and refunds quite challenging.

Con 2 – Uncertain Regulatory Landscape

The regulatory environment concerning cryptocurrencies keeps changing. There are countries such as China where crypto is banned. Currently, governments are exploring central bank digital currencies in an attempt to supersede crypto that is decentralized. 

What could this mean for businesses accepting cryptocurrency payments? Your efforts in making your brand crypto-ready can be crushed if your governments takes actions like China did; banning crypto.

Common Steps You Can Take to Start Accepting Cryptocurrency Payments for Your Business

One of the recommended ways of accepting crypto payments is through a third-party provider for a payment Gateway. A provider can accept crypto for your business, exchange it for fiat, and deposit fiat in your company account. This would solve the volatility challenges of holding crypto. 

Here is a summarised process of how to crypto payments:

• Select a provider
• Add crypto payments to your payment options
• Optimise Customer Experience with the payment process
• Enable Crypto payment option at checkout
• Integrate with popular crypto wallets to make customer’s journey easier
• Payment processing
• Payment confirmation
• Settlement

Should Businesses Accept Cryptocurrency Payments?

To accept cryptocurrency payments or not depends on your evaluation of cryptocurrency payment benefits for businesses. Also, your target customers play a significant part in your decision. If your customers demand for bitcoin payment option, for instance, it could be worth considering.

What does the future of payments look like for your business? Are you planning to accept cryptocurrency payments?