Cryptocurrency has exploded into mainstream popularity in recent years. First came Bitcoin, followed by several other decentralized currencies that operate in much the same way. Litecoin, Ethereum, Ripple, Dogecoin, Tether, and Binance are just a few of the more than 1500 cryptocurrencies on the market today.
But although cryptocurrencies now outnumber fiat currencies, experts in the field believe that too few businesses around the world are accepting this new crypto payment method. This means that a vast number of organizations are also missing out on the chance to grow their businesses and increase their profits.
It stands to reason that the more payment methods a business can accept, the more opportunities they have to make sales and generate revenue. If your company wants to join industry leaders like FedEx, Starbucks, Etsy, Whole Foods, AT&T, and Home Depot, who accept cryptocurrency payments, this guide can set you up for success.
The Basics Of Cryptocurrency
In short, cryptocurrency is a decentralized digital online-based currency that uses cryptography to secure quick and seamless transactions. It’s “online money,” but it’s so much more than that.
Cryptocurrency allows for direct and seamless transactions via an online platform. Because of the relative newness of cryptocurrency in the finance world, most of these digital currencies are still completely unregulated. This means that there’s a lot of wiggle room when it comes to payments, no matter the size. This flexibility can greatly benefit small businesses by lowering their transaction fees and avoiding costly bank charges. In the long run, this could be hugely beneficial to the growth of a company.
Studies show that around 47% of cryptocurrency owners currently seek out businesses that accept crypto as payment and prefer to make payments to those businesses. The community is supportive and loyal, and it’s growing rapidly on a global scale. Making it known that your company accepts and deals in cryptocurrency might just bring in new customers you never had or targeted in the past.
Why Your Business Should Accept Crypto as Payment
A nationwide survey recently showed that around 36% of small businesses in the United States currently accept crypto payment. This trend has been picking up pace in 2022. This is clearly something that isn’t going to go away any time soon, and it’s always a business-savvy move to get in on new trends and changes in the market early.
Crypto adoption might become a survival tactic for many small businesses. Many larger and more innovative companies – like Elon Musk’s Tesla – are already allowing all payments to be made entirely in crypto. Joining the trend would ensure your business doesn’t get left behind.
Some of the best business advice is to follow innovators in the market. This is another reason your small business should consider allowing crypto payment. Being a trailblazer isn’t a bad thing, especially when you’re following in the footsteps of enormous brands that have set the benchmark for crypto payment.
There are several other reasons that your business could benefit from accepting crypto payment:
- Grow your customer base: Accepting crypto payments will increase the international reach of your business and facilitate payments from all around the world.
- Expand your target audience: You will open up and explore new customer bases.
- Speed up payments: Utilizing crypto will allow for faster and more efficient payment methods.
- Boost long-term profitability: Earning in crypto could massively increase your gross profits, as crypto investments have shown to grow exponentially over time.
- Reduce bank charges and transaction fees: Cryptocurrencies have lower processing fees (especially in the case of international transactions), allowing for more significant cost savings.
How To Accept Crypto As A Payment
Now that we have discussed what cryptocurrency is and why your business should consider accepting it, let’s discuss how to accept crypto as payment.
Accepting crypto is a relatively simple process:
1. Set Up A Crypto Wallet/Crypto Gateway
The first step in optimizing your business and integrating it into the world of cryptocurrency is to set up a crypto wallet or a crypto gateway. The wallet is exactly what it sounds like, and it’s relatively easy to set up. You just need to know more on the topic of crypto payment platforms, what they do, and the various options that you can utilize and trust.
A crypto wallet will allow you to store, accept, and make cryptocurrency payments. You can set up crypto wallets for personal or business purposes. There are two types of crypto wallets; you will need to set one up to start accepting payments.
The first type of wallet is known as a hosted or “out-of-the-box wallet.” They require minimal setup and are the most common type of crypto wallet. When making use of a hosted wallet, a third party will be responsible for protecting and storing the cryptocurrency that you own.
These wallets are fantastic entry-level options for businesses or entrepreneurs who are not too clued into the world of crypto and the levels of security necessary to secure your funds. Hosted wallets, however, will be limited to the storing, collecting, paying, and accepting of crypto. However, this should be enough for any small business looking to enter the crypto payment world.
The second type of crypto wallet is a self-custody wallet, and the name again explains the concept perfectly. Unlike a hosted wallet, a self-custody wallet would not be protected or hosted by a third party. Instead, a self-custody wallet will provide you with the software necessary to completely set up your own storage site for cryptocurrency, but without the protection of a third-party host. The options are limitless with a self-custody wallet, but a more secure network of crypto professionals should be working to protect the digital assets stored within.
For businesses looking to give cryptocurrency a try and are simply looking to use crypto as a form of payment, a hosted wallet should be more than sufficient and safe.
2. Select a Crypto Wallet Platform
If you decide to make use of a hosted wallet, you will need to select a platform where you can open the wallet. There are many different platforms available, and these are a few of the most popular options:
- CoinBase: Coinbase is perhaps the most popular cryptocurrency platform in the world right now. The reason for its popularity is the fact that it is exceptionally reliable, and the UI is beginner friendly too. This means that you can hop straight onto the platform without prior knowledge and find it easy to navigate and utilize. The digital wallets are secure and safe, which is the most important aspect when using a hosted wallet.
- BitPay: BitPay has recently grown in popularity due to the number of currencies it allows you to trade on the platform. There are currently 13 different types of cryptocurrencies available for use on BitPay. This vast number of currencies could give your company extra flexibility as it allows for a broader customer base to make crypto payments.
- Exodus: Exodus is a more flexible platform when it comes to setting up a crypto wallet. This wallet supports over 200 cryptocurrencies, and no sign-up or account is required. The wallet is encrypted and stored on your mobile device, making it ideal for small business owners who prefer to have complete control over their finances. However, you may encounter issues if your device gets lost or stolen.
3. Select a Cryptocurrency
Once you have a wallet set up on one of the platforms mentioned above, you’ll need to decide which crypto is accepted as payment.
Bitcoin is currently the most popular cryptocurrency globally, with over 75% of crypto owners owning some form of Bitcoin. However, other currencies like Ethereum, Dogecoin, and Ripple are all popular in their own ways.
It’s also important to remember that cryptocurrencies like Bitcoin are generally purchased fractionally. The value fluctuates depending on supply and demand. All cryptocurrencies are taxable too, and they’re considered property. The IRS taxes them in the same way that gold or stocks are taxed.
Researching the different types of cryptocurrencies and their uses might help decide which crypto is accepted as payment for your business.
4. Integrate Crypto Payments on Your Website
Once you have a crypto wallet, the question of what crypto payment platforms is no longer a mystery, and you know what type of cryptocurrencies your business will deal in. It’s time to integrate a form of payment for customers on your website. Aside from allowing crypto payment, this will also alert potential crypto customers to the fact that your business accepts alternative currencies.
Numerous browser plugins are available that make the job of crypto payment integration extremely straightforward. If you can’t find the right plugin for your website, you can also set up a cryptocurrency gateway. This gateway takes customers to a platform where they can make payments.
Well-known and respected crypto platforms like CoinBase and BitPay have made it easy to integrate payment buttons or invoices. These add-ons include built-in links that lead directly to their payment processing platforms. Customers simply have to click the button, and they’re redirected to a secure transactional platform.
If integrating a crypto payment method into your website is proving a challenge, there are other options. One of these is to include a simple message that alerts customers about which crypto is accepted as payment. Another is to ask customers to contact your business to complete the transaction. This isn’t ideal, but it still puts you ahead of other brands or businesses that are not yet accepting crypto payment.
The Bottom Line
Crypto payments offer small businesses a cheap, efficient, and technologically advanced way of accepting money for products and services. The immense growth in the popularity of cryptocurrencies over the last decade proves that this isn’t a fad that will disappear in a few years. In fact, it might be the complete opposite.
With the birth of the metaverse and other online technological advances, it’s almost certain that cryptocurrencies will continue to grow. You can be part of this evolution if you know how to take crypto as payment.