Ours is undoubtedly an exciting time to be alive. Today, we live in a world where technology permeates every facet of our lives. Accordingly, innovation is challenging, long-held beliefs and norms across different fields.
The enterprise sector is one that innovation has massively impacted on. It has had to contend with the blockchain revolution currently sweeping through the globe.
A vital offshoot of the blockchain revolution is cryptocurrencies. Their utility value has many in the financial sector buzzing about them. But where do they fit in the small enterprise’s grand scheme of things?
In this article, we take a look at how crypto payments can benefit small businesses. Let’s delve right in!
Preventing Fraud
Any business will have money coming in and going out. These activities provide ripe circumstances for the mushrooming of fraud.
To mitigate such occurrences, entrepreneurs need to be aware of all the transactions involving their business’. Here’s where crypto payments come in handy.
Cryptos use blockchain technology which provides an immutable record of all transactions a business engages in. All exchanges undergo public verification before their completion.
This validation curbs fraud. Additionally, monies received go directly into the business’ wallet(s). A customer, therefore, cannot reverse funds already paid.
Streamlining Transactions
Cryptocurrency payments are in real-time. Their peer to peer nature eliminates intermediaries who are an unnecessary bottleneck in transactions.
Traditional payments, on the other hand, tend to be slow. Bank payments, for instance, can take days to conclude. At the same time, some electronic payment systems, for example, PayPal may be restricted in some countries.
At a time when speed is of the essence in any matter, near-instant payments are beneficial to both of the transacting parties. Their importance shows when it comes to international payments.
Attracting New Customers
Cryptocurrencies are a hip means of transacting. Consequently, they find favour with many millennials. Adapting crypto payments is a definite means of attracting more of them.
This way, businesses get to expand their customer bases. But adopting crypto payments needn’t be a generational matter. Most customers crave convenience in transactions.
Now crypto payments offer more than convenience in the conclusion of trades. Outlets affording their customers’ ease of transactions tend to attract more of them.
Accepting crypto transactions sends out the message that a business is innovative; it moves with the times. These qualities are strong magnets that attract would-be customers.
Lowering The Transaction Costs
Let’s face it; we all like to keep a lid on our expense. Business ventures are about the maximization of profits. It follows, therefore, that cost reduction features prominently in their plans. In crypto payments, they have an opportunity to cut their operating costs further.
How then do cryptos enable them to cut costs? The answer is one word-fees. Since Cryptocurrencies are decentralized, there’s a considerable reduction in fees accruing from any exchanges.
Whereas leading online payment platforms like PayPal charge fees of up to 4% crypto exchanges can levy fees lower than 1% of the transacted value.
Things get even better when the interactions are purely P2P. Besides purchasing a crypto alert, you don’t pay fees at all! Monies saved from either the reduction or elimination of fees could go to developing the business further.
Eliminating Chargebacks
Today’s businesses have to contend with rising cases of fraud. Credit card chargebacks are common.
A customer would make an order and pay for them. Once they confirm that their orders are in transit, they cancel the payments. This way, they acquire goods and services they haven’t paid for. On the other hand, the seller remains to count their losses.
Crypto payments eliminate chargebacks. As stated earlier, the transactions are P2P. The customer cannot claim a chargeback after initiating a transaction.
Once the funds hit the vendor’s wallet, there’s no way of instituting a reversal. That is unless the vendor chooses so.
Expanding Market Reach and Sales
Small businesses have more to gain from going global. First, they expand their market and secondly revenues.
Cryptocurrencies are ubiquitous. Consequently, they are critical enablers for borderless trading.
They eliminate the bottlenecks of international trade characterized by cashflow impediments, time and the high exchange rates.
Brand Publicity
Businesses crave visibility and what better way to do so than by embracing crypto payments.
How’s that so, you may ask. The answer is simple. The mere mention that your business supports cryptocurrencies is enough publicity. It sets you apart from the competition, something that draws you, customers.
Again, you get to tap into a network of dyed in the wool crypto enthusiasts. The crypto space has passionate communities of users that support and publicize each other.
Besides crypto projects invest in promoting their partnerships and adoptions. Thus they help sell your venture.
Reducing the Volume of Abandoned Shopping Carts
Picture this. You’ve finally made your selections and head to the checkout counter. You whip out your card or whatever payment method ready to conclude the transaction. But you can’t, because you find out that the business doesn’t accept your payment mode. You have no choice but to leave without your items.
Off-putting won’t you say?
That is the reality that many customers face. One reason for customers abandoning their carts is a business not supporting their payment method.
Cryptos expand the payment options for customers. Their global acceptance helps in reducing the volume of uncompleted checkout boosting revenues.
Personalized Tokens
A small enterprise can draw in customers through the development of their cryptocurrencies. They can personalize and incorporate tokens into a pre-existing customer bonus system.
Thus they reward shoppers for their purchases referrals and do reviews on their offers. The operators could designate the tokens as currency, discount credits or a loyalty system for VIP and repeat customers.
Are There Downsides To Crypto Payments?
It shouldn’t be lost that adopting crypto is all rosy. Several shortcomings come with their usage. Consequently, one should tread the crypto adoption path with caution.
For one, they’re highly volatile.
Again they are susceptible to cyberattacks their inbuilt security notwithstanding. Further, despite their masking of the transacting parties’ real identities, their public display discomfits the privacy-conscious.
Final Thoughts
The crypto revolution has arrived. In its wake, it continues to influence all aspects of our lives. Today any entrepreneur will be naive to ignore its impact on how we transact business. Small businesses will find a lot of good in their adoption. That said, they have their downsides too. Ultimately every business will have to decide whether or not to adopt them. It also requires a lot of prudence in how one goes about incorporating them in their venture.
