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What Small Business Owners Should Know before Accepting Crypto as a Payment Method

What Small Business Owners Should Know before Accepting Crypto as a Payment Method

Cryptocurrencies have taken the world by storm, and changed the way we think of money. The concept of owning a currency but not being able to withdraw it from an ATM, or to physically touch or feel it, is probably still foreign and inconceivable to most people. However, cryptocurrencies are here to stay, and they are gaining massive popularity daily. Central banks are considering launching digital currencies similar to Tether (USDT), a stable coin pegged to the US Dollar.

Countries are even starting to adopt Bitcoin as a legal currency, El Salvador being the first to do this. With cryptocurrencies having so much power in the financial systems, it leaves businesses with no other option but to adapt their methods to retain and grow their customer base.

But would it be a good idea for small businesses to accept cryptocurrencies as a payment method? The crypto markets are not the most stable, and there are a few things to consider as a small business owner before adapting to crypto payments.

Are Crypto Payments Suited for all Businesses?

The first thing one needs to consider is whether crypto payments are suitable for your type of business. Factors under consideration are your business goals and whether switching to crypto would benefit you in the long term.

Similarly, you will require the technological infrastructure to accept crypto payments. In addition, small businesses need proper cash flow, which can be influenced by the volatility of the crypto markets.

Entrepreneurs who have built successful online businesses, investors in real estate, and technological start-ups can benefit from using crypto payment methods since they have the financial stability to adapt to the crypto market dynamics.

Ofir Bar, an angel investor who has taken part in many such ventures and is today worth around $100 million, tells us that, “it is definitely something worth considering, if the majority of your business is done online. On the other hand, you have to carefully choose which crypto tokens you are willing to accept, and your customers need to know that the list of accepted tokens is subject to change, as this market is volatile.”

“Other types of businesses that are starting to deal in Bitcoin payments are real estate. European real estate companies took the lead by accepting Bitcoin as payment to purchase property. This trend seems to be more common in the UK than in the US. This is especially interesting for real estate investors and property entrepreneurs,” adds Ofir Bar, “since we are talking about a long term investment here.”

However, as a small business owner or entrepreneur, one needs to carefully assess the risks of transacting in digital currencies. Here are some of the risks of using cryptocurrency payments.

Crypto Volatility

The prices of cryptocurrencies move rapidly, and this volatility is why it is so attractive to many investors. As a small business owner, volatility can be a risk since you have to exchange the digital currency to retain the cash value, which will have to occur very quickly. An excellent way to get this done is to use a merchant like BitPay or Coinbase to exchange crypto to cash quickly and avoid losses.

Regulatory Changes

The cryptocurrency markets are still largely unregulated. However, lawmakers are constantly working on drafting regulations to govern them. Due to the newness of the crypto markets and the uncertainty, rules are going to take time to be finalized. Furthermore, laws will also differ from country to country. Business owners will be affected by these laws, should they be implemented, and it is a crucial aspect to consider.


Security is a key priority when dealing with cryptocurrencies. Although most platforms utilize top-notch security protocols, crypto wallets have been prone to hacking. There have been numerous attempts to access users’ wallets and obtain their private keys, and some cybercriminals were successful in their endeavors.

Now that you know the risks, what are the benefits of accepting crypto payments?

Lower Transaction Fees

Considering a few of the risks mentioned, there are some benefits to accepting crypto payments. For example, transaction fees are much lower than those of credit cards or checks. Small businesses can pay up to 4% in fees on credit card transactions; in contrast, some crypto exchanges charge less than 1% for transactional fees.

Crypto Transactions Are Immutable

The immutable nature of the blockchain makes crypto transactions irreversible, thus protecting merchants from fraudulent chargebacks. Once a crypto transaction is processed, it cannot be reversed.

Increase in Customer Base

Customers are always looking for the most convenient payment services. Therefore, small businesses offering crypto payment solutions can potentially expand their customer base. Since most customers find crypto payments more convenient, they will opt for a merchant that supports the service.

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by Brian Perry // Brian Perry is a contributor to Businessing Magazine.

Opinions expressed by contributors are their own.