More than 30% of small businesses in the USA accept crypto as one of the payment methods, and 1 out of 4 small businesses that do not accept crypto would like to implement this payment option for their users and clients but do not have enough knowledge on how to do it. These numbers are given without taking into consideration those companies that use Bitcoin ATMs.
It looks like cryptocurrency, specifically Bitcoin, Bitcoin Cash, and Ethereum is quite a popular payment method.
All industries can benefit from accepting cryptocurrency as a payment method. As of March 9, 2021, the distribution of businesses by industries looked like this:
Source: https://www.statista.com/statistics/1222768/business-types-with-crypto-payment-solution/
The numbers are impressive, and this is just the start considering that the industry is relatively new and traditional businesses are just exploring all the pros they can get by accepting crypto.
How Your Company Can Benefit from Integrating Crypto as a Payment Method?
How can your company benefit from integrating crypto as one of the payment methods? They are numerous, and some of them open completely new opportunities for your company.
- Access to new demographic groups: users paying with crypto are mostly completely new to a company. Moreover, they spend twice as much as credit card users.
- Introduction of your company to new assets and liquidity pools: traditional and new asset types can be tokenized and used for your business purposes.
- Accessing opportunities not available in case of fiat money: cryptocurrency enables instant transfers with enhanced transparency.
How to Integrate Crypto Payments?
Companies shall consider all the benefits and drawbacks of integrating payments in cryptocurrency. So, the wider audience, the possibility of attracting clients from all around the world, and growing the company revenue shall be considered along with technical and legal challenges. As long as you manage a company, you shall take into account that it shall comply with all the AML/CFT requirements which, in turn, means that all the clients would need to pass the KYC procedures.
Here, you have several options.
Hands-off approach
You can accept crypto payments via an intermediary who will manage everything for you: the technical base, legal matters, and similar. The intermediary party accepts crypto from your clients, converts it to fiat, and sends it to your company’s account.
Pros of a hands-off approach
- No issues from the technical side
- You can start benefiting from accepting crypto immediately
- Fewer if no legal issues
Cons of a hands-off approach
- The main drawback is the price. The intermediary company will charge a fee, and frequently, this fee is not that low.
- The company depends on the third-party vendor in all matters of crypto payments. Therefore, it is important to select such a vendor carefully.
- Cybersecurity, compliance with legal requirements, and other matters might influence your clients negatively if these details are not tackled properly by the vendor.
- Conversion rates are dictated by the vendor which might not always be optimal for the company.
- The major part of responsibilities is still on you because you cannot just shift all the financial responsibilities to the third party especially when you have to tackle an issue your customer has faced.
Hands-on Approach
This approach means that the company is ready not only to use a third-party service to accept crypto but to handle all the operations, including the treasury function. This approach will definitely increase the income but also, the number of technical issues will boost.
In the hands-on approach, the company has two ways to choose from:
- To use the services of a treasury group that will manage the custody over crypto and provide the wallet management service.
- Integrate cryptocurrency into the company’s financial system and manage everything independently.
While the first case is easier to implement, the second care means more independence and flexibility, as well as more responsibilities. Whatever way you choose, you can at least save on using an API instead of developing a new solution.
When taking a hands-on approach, you shall consider the following major details:
- Accounting challenges: crypto is highly volatile, and most likely, you will handle accounting considering crypto equivalents in fiat money. It might be a challenge due to the high crypto volatility.
- Taxation: you will have to find out how transactions in crypto are regarded in your location and adjust your taxation documentation respectively. And do not forget about the volatility: even if you have to pay taxes for income in crypto, they will be paid in fiat money. Therefore, it is important for the company to record the asset value at the time when the company took ownership over it. Consider also all indirect taxes. In different places, they may differ significantly depending on the crypto legal status there.
- Technical challenges: if you do not hire a company to handle it for you, you might need to hire some new specialists who know how to implement crypto solutions.
Companies That Accept Payments in Crypto
Even though cryptocurrency isn’t mainstream yet, many companies have already moved to accept payments in crypto. Here is the list of them, and we bet you will be surprised to see some names there.
Microsoft
The company accepts Bitcoin as an alternative payment means. Microsoft didn’t make any official announcement but just started accepting crypto quietly. Now, Microsoft clients can pay with BTC for apps, gadgets, subscriptions, etc.
Starbucks
Users can download a Bakkt app to pay for the products with converted Bitcoin.
Tesla
Even though Elon Musk is known to have a very controversial relationship with Bitcoin, Tesla announced that they’d accept Bitcoin as one of the payment means. Since then, the company has invested $1.5 bln in Bitcoin, but the integration of Bitcoin as a payment method still hasn’t occurred. Elon Musk is concerned about the environmental impact of Bitcoin mining, so, it is quite possible that BTC is going to be replaced by a different cryptocurrency, their own Tesla coin, for example.
PayPal
The US users can now buy, sell, and keep Bitcoin and some more cryptocurrencies using their PayPal accounts. However, this option is not available to all PayPal users.
AirBaltic
This is the first aviation company that started accepting payments in Bitcoin in 2014. According to the company’s representatives, more than 1,000 BTC transactions have been performed since then.
Bottom Line
Cryptocurrency opens new opportunities for any company as long as the company knows how to integrate crypto payments correctly. Think properly, research the market and the crypto-laws in your country, and make a wise decision.
Stay tuned for further updates, crypto guides, and market insights from LetsExchange. You can also follow us on Twitter, Facebook, Reddit, Instagram, LinkedIn, Medium, Quora, Telegram, Steemit, and Bitcointalk for first-hand information from our team.