Blockchain technology has led to numerous cryptocurrencies, each with its own community, structure, unique use case, and utility. All cryptocurrencies share a common feature – they are transforming the way people conduct their everyday financial transactions and gradually shifting the perception of money, ownership, and value towards blockchain-based currencies.
Although the growth of the DeFi sector may make the shift seem sudden, the transformation actually began in 2008 with the advent of the Bitcoin whitepaper.
The DeFi space is only a part of this fundamental change. After the initial hype surrounding Bitcoin’s potential, there was a significant increase in public interest towards crypto payments. This led to the emergence of thousands of different cryptocurrencies, such as Bitcoin Cash, which is now seen as an amazing option for crypto payments.
Crypto as a new payment gateway
Nowadays, it’s widely accepted that cryptocurrency, including Bitcoin Cash, has become an intriguing and exciting new medium of exchange for businesses and casual users alike, seeking to broaden their financial horizons with more openness and freedom.
It is becoming increasingly common to spend cryptocurrencies on goods and services. Businesses from a wide range of industries now accept payments on decentralized networks without intermediaries, something that was impossible earlier. They do this either because it suits their business model or because cryptocurrency payment methods complement traditional ones.
If you’re thinking about accepting Bitcoin Cash payments, there are many more reasons to consider. The following study will suggest that it might be a good idea for everyone.
Is it worth accepting Bitcoin Cash?
Recent studies conducted by Crypto.com have revealed a significant gap between consumer demand for using cryptocurrency as a form of payment and the number of businesses accepting it, despite thousands of businesses already accepting crypto payments.
The study surveyed 110,000 customers and over 1.5 million Worldpay merchants and found that only 4% of the merchants accept cryptocurrency payments. However, 60% of them expressed their interest in such an option. On the other hand, 40% of the surveyed customers already use digital assets for purchasing goods and services, and 75% of them are interested in having the ability to do so.
This suggests that there is a huge opportunity for merchants worldwide, particularly in the travel, automotive, digital media, and hospitality industries where there is a high demand and gap. These industries have the most potential for growth according to the statistics.
Allowing customers to pay with cryptocurrency is not only driven by high demand, but there are other compelling reasons that businesses should consider.
What are the benefits of accepting Bitcoin Cash and other cryptocurrencies?
Cryptocurrencies like Bitcoin Cash are becoming increasingly popular for payments due to their speed, affordability, simplicity, and confidentiality. This opens up new opportunities for merchants who accept crypto payments and helps them avoid the hassles associated with traditional payment methods like credit cards and bank transfers.
Implementing cryptocurrency payment methods into business operations can benefit merchants in multiple ways.
Get instant payments from anywhere
The speed and cost of transactions for customers using Bitcoin cash are not affected by their location. Transactions are typically settled immediately by most blockchains, so payments are processed in seconds.
Crypto payment processing services can detect and approve payments made in Bitcoin and Ethereum, even if they typically take longer to process, before they are fully confirmed on the blockchain. This significantly reduces the waiting time required. These transactions can be viewed in real-time on the public ledger.
Merchants can accept cryptocurrency without requiring customers to have bank accounts or credit/debit cards. This means they can sell digital products online, sell in-store, ship merchandise across the world, or collect funds from business partners using cryptocurrency.
Cryptocurrencies can be used by businesses without any geographical restrictions. Therefore, having the option to use cryptocurrencies can be advantageous in various scenarios.
Avoiding costly currency conversions
If your business involves international transactions, you may face challenges when making cross-border payments through multiple banks and accounts, especially if currency conversion is required. This can result in delays and extra costs, which can be frustrating.
In contrast, making or receiving payments using digital currency does not require cross-currency settlements, which is much simpler than dealing with fiat currency exchange rates and procedures. While this may not be important for most businesses, it can help you appreciate the ease that cryptocurrencies bring to the process in certain cases.
Low transaction fees
Compared to credit card payments which usually have processing fees of up to 3%, Bitcoin Cash transactions cost less than a cent and don’t involve a third party taking a cut.
However, if a third-party payment processor is used to handle payments and provide tools for accounting and business operations, the merchant may incur some costs.
Generally, crypto payment providers charge significantly lower fees compared to traditional payment methods, with the highest fee not exceeding 1% of the transaction volume.
Many experienced e-commerce professionals have faced customers who ask their banks for a chargeback on the products or services they received. Customers may have different reasons for initiating a chargeback. Some may forget the services they subscribed to and become anxious when they see unknown charges on their credit card. Others may try to take advantage of consumer protection laws and request a refund from the bank for a product or service that they have already used.
Many customers mistakenly file chargebacks instead of seeking a refund from the merchant. As a result, up to 80% of chargebacks are filed incorrectly. This is often due to confusion between the two processes, and some customers choose to contact their bank for a refund instead of the merchant. This is known as friendly or unintentional fraud.
It is crucial for merchants to fight against fraudulent chargebacks, even though it can be burdensome. Failure to do so could lead to hefty fines from the bank and loss of profits from a sale. Also, if a merchant experiences too many chargebacks compared to their total orders, their credit card processor might stop processing payments for them.
Unfortunately, merchants often have little success when disputing chargebacks. Research indicates that card issuers tend to side with consumers rather than vendors, with a ratio of 5:1. This can be frustrating for merchants, particularly given the effort and stress involved in managing these disputes.
Cryptocurrencies eliminate the risk of fraudulent chargebacks since payments cannot be made without the owner’s consent. Even if cryptocurrency is used as an additional payment method, it can still greatly reduce the aforementioned risks.
Connect with wealthier customers
A research about BitPay customers revealed that 40% of customers paying through cryptocurrency are new to the merchant. Also, customers who support blockchain technology tend to spend twice as much as those who use credit cards and are more likely to return for another purchase if they have a positive experience.
Accepting crypto payments is crucial for businesses that target educated males below the age of 34, as they possess the majority of decentralized wealth worldwide.
If you let them use their wealth to purchase from your business, it could greatly enhance your sales and revenue. This leads us to the following point.
Use crypto for marketing
If your business accepts some Bitcoin Cash or other cryptocurrencies, you might have good marketing opportunities from new customers who own those cryptocurrencies and come to you because of it. We observe that merchants who promote themselves as crypto-friendly establishments are often successful. By doing this, they not only offer a product or service, but also make it available to more people and let them know that their business is open to those who own crypto.
Control your funds
Cryptocurrency enables individuals and businesses to have direct ownership and control over their money. If you receive payment in cryptocurrency, you have the option to keep it in its digital form or convert it into local fiat currency using external payment processors when the settlement is finalized.
It is important to keep in mind that although accepting Bitcoin Cash on your own is straightforward, managing multiple coins without outside assistance can become a time-consuming and complicated task, as well as potentially causing tax issues.
Most businesses choose not to create their own cryptocurrency payment systems due to the complexity involved. Instead, they either ignore it altogether or team up with other companies that can handle the process for them and provide additional benefits.
How to start accepting Bitcoin cash? – Considerations before you start
If you are considering accepting Bitcoin Cash, you should decide whether you want to handle it on your own or use a service. Your decision should be based on your goals.
It’s important to note that doing it yourself may be harder and have more restrictions compared to using a specialized company. You will need staff to manage and maintain it and will require time to learn about the crypto industry.
If you plan to receive payments in multiple currencies and prefer to receive settlements in your national currency, using a payment processor that can handle all aspects of collecting crypto payments is the best solution. This will also resolve any tax issues related to cryptocurrencies.
Accepting Bitcoin Cash and other cryptocurrencies opens up a world of opportunities for both consumers and merchants. As a progressive and efficient medium of exchange, it presents a variety of business benefits that span from instant global payments to reduced transaction fees and protection against fraudulent chargebacks.
Additionally, it serves as a powerful marketing tool, appealing to a growing customer base of crypto users, and offers an elevated level of financial control. With a plethora of accessible and affordable tools available, entering the world of crypto payments is no longer a daunting task. However, before jumping on the bandwagon, both merchants and consumers must consider the volatility of cryptocurrencies, potential tax implications, and their readiness to adapt to this new technology.