Cryptocurrencies and blockchain technology are steadily heading towards the mainstream, with Bitcoin and Ethereum leading as the top two cryptocurrencies. Payments and transactions form an integral part of how societies co-exist and function. They occur every day through direct payments, digital payments, and now, blockchain. Accepting cryptocurrency as a means of payment is now more like accepting foreign currency, and does not require a new form of a payment processor, according to Hackernoon.
A mutually beneficial future for SMEs and cryptocurrencies
For Small and Medium Enterprises (SMEs), there are a plethora of benefits that come when you choose to accept crypto payments. Up to 36% of US SMEs are already accepting crypto payments. This means that it is no longer just an idea; it’s becoming a reality that is shaping how we transact.
Newer businesses are also more open to these modes of payments and are adapting willfully to this new paradigm. And why wouldn’t they? The benefits of accepting cryptocurrencies for Small and Medium Enterprises are numerous:
#1 Crypto payments will create a new customer base
Cryptocurrencies are growing in popularity, thanks to the constant research and development to make them more relevant. Small and Medium Enterprises and businesses can grow their base exponentially by adding a crypto-based payment system to their list of supported payment methods. This should increase and expand their customer base, bringing in more people who prefer to use this mode of payment. According to a survey, 30% would prefer the addition of cryptocurrencies such as Bitcoin as a mode of payment while making general purchases.
#2 Introducing crypto payments will reduce costs
Source: Logos Network, Medium
Transaction costs tend to be on the expensive side for traditional payment mediums. Card companies charge a merchant fee, and cross-border transactions are subject to exchange rate fluctuations and significant margins applied by banks. Since cryptocurrencies are decentralized, the fees are both agnostic of the transaction type, and often significantly lower. This has been a significant development in the sector as upcoming cryptocurrencies, and technological advances focus heavily on the cost-reducing factor of crypto transactions. The fact that crypto transactions happen faster than traditional bank transfers is a bonus!
#3 Superior fraud protection is on the horizon
When it comes to digital payments, secure payments are a game-changer. The basis of every cryptocurrency is blockchain technology. By design, relying on the blockchain means that transactions are final and cannot be reversed, which implies that transactions cannot be overridden. They’re also practically impossible, or at least, exceedingly challenging, to manipulate. In other words, cryptocurrencies give us secure, valid transactions far more resilient to malicious attacks than the current monetary systems.
Another concept deserving of our attention is programmable money – using smart contracts, eliminating manual and administrative work, Agreements, contracts, and transactions can be more secure and automated than ever, and eliminate the possibility of both frauds and chargebacks. In other words – SME payments benefit from lowered costs and increased convenience.
#4 Going global and increasing sales
Cryptocurrencies’ decentralised nature has a variety of benefits. One of them is that they enable small and medium enterprises to expand and open their doors to international buyers. This allows them to go global and removes the barrier of inaccessibility. The boundaries to a business’ digital assets are non-existent since it has the potential of being a global currency.
Cryptocurrencies, as an industry, is constantly coming up with new ways of bridging geographical gaps, especially in terms of money flow on a global scale. It’s resolving issues such as waiting time for processing international transactions and the frustratingly high costs associated with exchange rates. A transfer halfway across the world, say from the US to Bangladesh, doesn’t have to take two days and double-digit dollars in fees. Instead, it can be done within minutes, at a fraction of the price. It’s obvious what this means for SME payments, and even for large businesses.
#5 Better brand visibility
Announcing that your business accepts crypto as a means of payment is essentially carving a niche for your brand and making it stand apart from the competition. Cryptocurrencies and blockchains have passionate and interactive communities of users that are keen on buying from and supporting a small and medium enterprise that accepts it as a mode of payment.
It is already a thriving ecosystem, which is only expanding, thanks to its $300 billion market cap since conception.
While some feel that the switch from traditional payment system payments to crypto might take a while, others argue that the revolution is already here. Although cryptocurrency adoption is not as widespread as bank transfers or credit card payments, it is certainly piquing everyone’s interest, thanks to a large number of advantages it offers against the payment systems already in place. Cryptocurrencies are essentially redefining the future of finance, and SME payments are positioned to be at the centre of this revolution.
The integration of payment apps with cryptocurrencies is culminating a symbiotic relationship. The fact that these applications offer crypto investing and spending opens up new avenues for reaching larger strata of the population and penetrating new markets.