Before COVID-19 barged into our lives, crypto and blockchain were the hottest buzzwords in the business world. Now, even though corona is making headlines, crypto has not altogether disappeared from the limelight.
In fact, studies show there has been a considerable increase in the number of businesses using cryptocurrency. According to Deloitte, more than 2,300 US businesses accept Bitcoin and other digital currencies. They’re being used for investment, operational, and transactional purposes.
The question that entrepreneurs are asking is why are so many businesses going crypto?
And that is what we will answer today. This blog takes a closer look at the shift towards digital currencies.
So let’s begin by exploring the benefits of crypto that are alluring enterprises into using these digital assets.
The benefits of crypto
There’s always been a great deal of speculation about crypto ever since it was created in 2009. But due to pandemic conditions, there seems to be a stronger incentive towards the use of virtual currency.
If you’re a business owner who is considering using crypto, you need to know what it can bring to the table.
Here’s a list of some of the ways digital currency can help your company:
1. Decreased transaction fees
With credit card transactions, banks are the intermediaries, and they charge a fee for their services.
But this is not so with digital currencies. As you probably already know, crypto is built on a decentralized form of transaction. Thus there are no third parties involved. So if you accept crypto in exchange for products or services, one of the greatest benefits is that there will be no direct processing costs. Forrester’s research reveals that this allows merchants to save considerably on fees, unlocking a whole new customer base.
However, it is important to point out that you are likely to be charged a small flat fee for your wallet account if you’re a merchant selling online.
Related Read: 6 Best Bitcoin Wallets To Store Your Bitcoins Safely!
2. Faster payment
Unlike credit card payments that could take days to clear, crypto transactions can be completed almost immediately. For you, that means you have access to payments within minutes.
Moreover, crypto offers options that are simply not available with payments made in fiat currency.
For instance, organizations now have access to information in real-time and, therefore, accurate revenue-sharing data. This enhances transparency within the business, which facilitates back-office reconciliation.
3. Less risk
Crypto payment options reduce risk by lessening or eliminating issues related to fraud or mistakes. Moreover, security is better through the blockchain. Often consumers have concerns about making large online transactions, such as those who want to buy a car or a house. Crypto enables simple, real-time, and secure transactions that can facilitate your business dealings.
Additionally, crypto sales are final, and charges cannot be negated after the transaction is complete. As an entrepreneur, this means you have more financial security.
4. Better access to global customers
The speed at which companies are expanding the globe already signifies the need for a single currency that overcomes international boundaries. Businesses with overseas clients show a greater interest in cryptocurrency because they no longer need to deal with fees or currency exchange rates across borders.
For many startups, this is the perfect way to conduct business and gain a competitive advantage.
Companies may attract new customers through this additional mode of making payments, which could help boost their bottom line.
5. Improved business image
The fact that you accept crypto as a form of payment signifies that you are a step ahead of the rest. A company that embraces emerging trends is deemed one that is ready to face the future.
Again, this could provide access to a newer demographic of customers. Cutting-edge clientele that values transparency in their transactions is sure to be drawn to your business.
6. Increase in the size of transactions
You can use this opportunity to generate new sales. First-time crypto investors may be interested in spending the returns on their investment. And they could be attracted to your business because they prefer to pay with crypto.
But the cherry on top of the pie is that Forrester’s research noted that buyers who plan to pay with cryptocurrency tend to spend more than other customers. According to their study, 40% of customers who pay with crypto are new customers. More importantly, their purchase amounts are twice those of credit card users. That means that adding crypto to your offerings can help increase the size of transactions for your business.
7. Access to new capital
Often online startups offer ICOs (Initial Coin Offerings). You can think of them as the more advanced version of stocks but more as tokens specific to a particular company.
ICOs are popular among startups that want to raise additional funds. This can help them create more products and offer more services.
But an ICO can also help your business achieve greater overall gains. For instance, if people are motivated to buy your tokens, the value of the tokens will climb. As its price increases, your stance in the commercial landscape becomes stronger. This signals more people to invest in your company.
As many companies are transitioning to the digital landscape, they are looking at crypto as a new way to conduct businesses. This new virtual currency is backed with a great deal of potential. Moreover, it has the power to evolve the financial structure within corporations as we know it.
However, going crypto may not be the ideal solution for all companies. Whether you choose to incorporate it into your offerings or not depends significantly on the nature of your business, the services/products you offer, and your customer’s preferences.
If you do decide to go crypto, you need to begin by developing a road map of your company’s future.
As with any technological implementation, you must have a well-thought-out plan. Some of the aspects you should consider may include the following:
- How do you intend to introduce crypto into your business offerings?
- What partners will the company need in order to deal with crypto?
- What security measures will the company need to integrate?
- What additional resources will the company need? What expertise might be required?
This endeavor may be a challenge for many businesses. However, the key is to evaluate your progress and monitor long-term vendor performance.
Coronavirus has impacted industries all across the globe. The latest trend includes the building of interesting products surrounding crypto by new companies.
While issues like regulations, liquidity, and scams are some matters that entrepreneurs- and consumers- worry about, governments around the world must take appropriate measures to regulate the digital currency before it enters the mainstream.
At the moment, as the use of cryptocurrencies evolves, businesses both large and small are evaluating whether they should jump on board. However, this is only the beginning of their struggles.
The real challenge for business owners is knowing how to incorporate cryptocurrency into their organization effectively.