Cryptocurrency is now gaining more momentum in business, especially as the pandemic forced consumers to look for alternative forms of payment. In fact, as of May 2020, the cryptocurrency market cap has already reached $265.545 billion with Bitcoin making up for $6 billion of daily online transactions. It’s likely that cryptocurrency will become a payments industry trend in 2021 and beyond.
But the big question now is: should your high-risk business start accepting cryptocurrency payments? Let’s take a closer look:
One of the biggest benefits of cryptocurrency is the lower transaction fee. Since digital currencies are not held by any financial authority, transaction fees are relatively cheaper at just 1% maximum compared to credit and debit cards, whose fees can go anywhere from 3-5%.
With the pandemic, 2020 saw a 42.6% increase in card payments. Accepting cryptocurrency gives your consumers another option to pay cashless without spending a lot on transaction fees.
Fraud is such a huge problem for high-risk merchant accounts and it results in high chargeback rates that make it harder to get a good credit card processor.
Cryptocurrency is one of the most secure digital platforms in the world because all transactions are completely anonymous. Unlike processing credit cards, where you risk exposing your customer’s personal information to hackers, removing personal data in the equation makes your business less attractive to scams and hacks.
Out of the 7.6 billion potential consumers around the world, at least 40 million of them have a Bitcoin or Ethereum account. With at least 300,000 new Bitcoin wallets downloaded each month, it’s now easier for you to reach a global market without having to worry about currency fluctuations or high exchange fees.
Transactions are also a lot faster even across borders, which is a huge advantage for even the smallest business.
The lack of regulation can be an advantage, but it can also mean a lack of stability for the cryptocurrency market.
While some governments are working on understanding and accepting digital currency, there are still threats from some financial authorities and regulatory organizations to control or even stop this technology altogether.
It’s no secret that there are still some speculations about the credibility of Bitcoin, Ethereum, and other digital currencies, and this can cause high levels of volatility. It can result in what is called a “flash crash,” where a digital currency’s value suddenly drops to very low levels within just minutes.
Ethereum has experienced this when its value suddenly dropped from $319 to $0.10. Although it recovered quickly, it sent some businesses into panic and recovery can sometimes take a while.
So, should your high-risk business start accepting cryptocurrency? There really is no definitive answer yet. But if you take the right steps and know how to mitigate the risks, you will definitely benefit from having another payment option for your consumers to use.