Should Your Business Accept Bitcoin Payments?
Should your business accept bitcoin payments & is it ready to embrace it?
5 years ago, when someone in the business community mentioned “Bitcoin” the immediate question we all had was ‘Is that legal?’, however, that is no longer the case. Bitcoin is here and it is here to stay.
But how did the perceptions of Bitcoin change? For starters, Elon Musk, CEO of Tesla Motors put out a tweet last year that Bitcoin was a good thing. Once the tweet was published, the gates were opened, and the value of Bitcoin skyrocketed. This week Bitcoin is trading at over £30k and in the last 12 months, Bitcoin value peaked at closer to £50k.
Today, businesses from small shops to large corporations are joining the Bitcoin revolution. With the spike in online sales, Bitcoin is deemed as secure and can also be a great way to improve cash flow for businesses. Tesla started accepting the digital currency for purchases of its electric vehicles only to reverse decisions in mid-May. However, Mr Musk announced in June that as soon as Bitcoin mining is powered by more than 50% renewable energy, he will open up Bitcoin purchases again.
And it’s not just Tesla taking strides on accepting Bitcoin...Microsoft has been accepting Bitcoin purchases for use of its online Xbox Store for over 5 years, and Starbucks also accepts payment by Bitcoin.
But why might businesses accept cryptocurrency as a form of payment?
Some of the reasons for accepting cryptocurrency as a form of payment for web transactions are security, convenience, low fees and enhanced privacy.
One of the main reasons for accepting Bitcoin or other forms of cryptocurrency is because it’s much more secure than using traditional credit cards. You don’t need to worry about hackers taking customer details or stealing credit card numbers. You don’t need to ask for personal details.
2. Convenience & Lower Fees
There are many website apps that make the transaction easier than using a credit card, and compared to credit cards, Bitcoin has lower fees which is yet another reason for accepting cryptocurrencies. However, you need to be careful as I have seen reports of fees ranging from no fee to nearly £50.
In the US and some other countries, charities are accepting Bitcoin. Bitcoin use in Venezuela soared in 2020 due to hyperinflation. Whilst things seem positive if the value moves the right way, it goes without saying that if you are a small business this could mean disaster if the value decreases by a large percentage.
With all that said and done, if you do decide to take the plunge and start accepting Bitcoin, you will be following the current trend. With that said, as an accountant and advisor,
I would not recommend Bitcoin or other types of digital/cryptocurrency as a mode of payment at present. In the UK, high street shops are not accepting Bitcoin yet and there is some way to go so it’s best to wait until it's widely accepted. You also need to be mindful of your customer base, as unless your customers start asking to pay by Crypto, then it might not be time to review your position. Finally, Bitcoin is not ideal for small value items yet as there are still issues with charges.