When you own a business, you want to know that customers can make payments to you securely and safely. You may have heard a lot in the news about cryptocurrencies, particularly Bitcoin, and are wondering whether to accept them as payment methods, perhaps alongside other options like card payments or PayPal. However, if you’ve never used cryptocurrencies before, you might be wondering what they are and whether you need to accept them.
What Are Cryptocurrencies?
Cryptocurrencies, sometimes called crypto for short, are basically digital currencies that are decentralized, so they’re not held in a bank. When a customer pays using a cryptocurrency on your website, they are transferring this asset to you, so you can then use the crypto yourself, sell it on an exchange to get funds into your account, or even use a Bitcoin or other crypto ATM to get the cash.
There are several ways that people obtain cryptocurrencies. One way is by ‘mining’ them, which is done via computer, and companies such as Genesis Mining allow people to mine Bitcoins without using their own equipment and power. They can also buy cryptocurrencies from an exchange, which is a bit like buying stocks and shares.
Are Cryptocurrencies Popular as Payment Methods?
Although the number of businesses that accept crypto is small, it is rising, and the market is growing while retail sales have declined. Because not many businesses accept Bitcoin and other cryptocurrencies, stores that do use them have less competition, so it could be an innovative step for your business. It’s a unique selling point (USP) that you can use in marketing and could well lead people to your website who otherwise might not have come across it.
How Easy Is It to Accept Crypto?
The short answer is that it’s fairly easy to set up cryptocurrency payment methods, and while it may sound complex and futuristic, there are plenty of online guides.
You can accept Bitcoins or other currencies manually, which just means that people send their payments to your wallet address. If you have a small business that doesn’t take a lot of orders, then this may be an OK option, as it’ll be easy to manage. However, if you’re dealing with lots of transactions each day, it may be easier to use a platform such as BitPay. Adding this to your website allows you to take Bitcoin payments, but it does mean you pay a withdrawal fee for each transaction, usually about 1%. However, as a retailer, you will have credit card fees anyway.
What About Taxes?
Some retailers avoid Bitcoin because they are confused about how they work with taxes. Essentially, if Bitcoins or other cryptocurrencies are used to provide goods and services, then they are taxed as normal, as with any income. As with any transaction, you should keep records that show how much you received in crypto and how much it is worth in dollars, as this will ensure you pay the right amount of tax.
Adding the option for crypto payments could be good for your business, no matter it’s size, and could open you up to a whole new market of potential customers.
