Every small business owners know the essence of excellent customer experience. Ideally, the overall experience you give your customers can determine whether they will buy from your small business or go to your competitors. Therefore, you want to ensure that customers have different payment options to simplify the checkout process. And accepting Bitcoin payment is trendy among small businesses these days. However, you may want to know the benefits and risks of this payment method before taking it.
Bitcoin Benefits for a Small Business
Some big companies started accepting Bitcoin and other virtual currencies some years ago. However, some firms like PayPal added this digital currency as a payment option recently. Here are the key benefits of accepting Bitcoin payments in your small business.
Low Transaction Costs
Unlike traditional payment methods, Bitcoin transaction costs are relatively low. That’s because this digital currency does not involve intermediaries like credit cards and banks. Consequently, Bitcoin users pay lower fees to send funds to this cryptocurrency’s network.
Bitcoin protects your small business against fraud due to its decentralization. Ideally, Bitcoin does not involve third parties that may cancel a transaction when a customer pays with this virtual currency. What’s more, blockchain can stop a customer whose digital wallet doesn’t have sufficient funds from making a payment. Thus, this payment method reduces the chances of time-wasting chargebacks.
When using Bitcoin, a customer or merchant doesn’t wait for the transaction to clear. Also, Bitcoin transactions do not feature intermediaries like banks. Thus, transactions are more efficient. Ideally, Bitcoin transactions clear in real-time.
Perhaps, the primary benefit of accepting Bitcoin is opening doors for a small business to the international marketplace. With this virtual currency, a small business can receive payment for products and services from customers in any location. That’s because Bitcoin acts as a universal currency, and your small business can convert it into a local currency. And this can encourage small business growth while boosting revenue.
Bitcoin Risks for a Small Business
While Bitcoin is a relatively new technology with many benefits for a small business, it has some drawbacks. Before you add Bitcoin into the acceptable payment methods for your small business, consider these risks.
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Bitcoin is a New Technology
Not all your customers are tech-savvy. That means Bitcoin payments might not be ideal for all your customers. Some may not even know anything about this digital currency. What’s more, customers need digital wallets to use Bitcoin when purchasing your products or services. Therefore, Bitcoin might not be an ideal payment method for your small business if it has older or traditional customers.
Bitcoin’s price volatility is the most considerable risk of accepting it as a payment method for your small business. Even when you check the real-time Bitcoin prices on some of the top trading systems, you notice price variations. What’s more, this virtual currency’s price can fluctuate wildly within a few hours. That means your small business could gain or lose a significant amount of funds within a short time by accepting Bitcoin.
Ideally, Bitcoin’s unpredictability makes holding it risky for a small business. At the same time, your small business can take advantage of this volatility to trade Bitcoin for profits.
Volatility and novelty make Bitcoin trading exciting to most traders. However, these elements can make accepting Bitcoin payments risky for a small business. That’s because fluctuating values could leave a business with significant losses after accepting payments in Bitcoin. Therefore, take your time to research Bitcoin and how companies accepting it as a payment method operate. That way, you’ll put measures in place to avoid losses once you start taking Bitcoin payments.