Introduction
The popularity of Bitcoin is increasing day by day. And the Bitcoin boom is working behind it. During the Coronavirus pandemic, when the global economy was struggling, it was the Crypto market that handled itself after a little while.
This is the time when more investors, common people, institutional investors, and retailers started to use Bitcoin and some other efficient Cryptocurrencies.
Even El Salvador became the first-ever country to recognize Bitcoin as their official currency along with the traditional fiat currency. Apart from that, a number of countries have loosened the restrictions on using Bitcoin.
More business owners and retailers are accepting payments through Bitcoin and other Cryptocurrencies. Several small businesses have also started to accept payments through Bitcoin.
In case you are operating a small business and also thinking about starting to accept payment through Bitcoin, you should have a clear idea about its advantages and disadvantages. To know the details read more.
Pros Of Bitcoin For Small Businesses
Around the world, there are more than 15,000 businesses that accept payments through Bitcoin. And the number is increasing. There are obvious reasons behind the increasing popularity of Bitcoin among business owners.
Here are the advantages of Bitcoin for your small business.
1. Lower Transaction Fees
We all are aware of the high credit card fees; it discourages small businesses from accepting credit card payments. As per Forbes, payment options beyond cash always encourage customers to spend more on shopping.
So, your small business requires something other than credit card payments. Here, payments through bitcoins play a huge role. Here you do not need to worry about the transaction fees that much.
2. Quick Payments
When it comes to Bitcoin transactions, higher speed and lower transactions are the most prominent advantages. Usually, it takes around a minute to process a Bitcoin transaction, and it takes a few hours to complete the transaction process.
Even though accounting for a third-party Bitcoin vendor, you will get Bitcoin payments faster than credit cards and will be able to convert that into cash faster.
3. No Chargebacks
Once a Bitcoin transaction is done, it is final. It provides businesses with another path to saving money. Once the payment is made, the buyers can not dispute the transaction or can not reverse the transactions by claiming that the goods were not delivered or the product is defective.
This way, businesses are protected from chargeback fraud. For every chargeback, the credit card company withdraws the amount from the merchant account and then deposits that back into the account of customers, and a chargeback fee is also applied.
4. Convenient International Transactions
When it comes to international payments and transactions, we all know that credit card rules are different for different countries. However, Bitcoin always comes free from foreign transactions and currency exchange fees.
With Bitcoin, small businesses can accept international payments, and that too simply with no additional cost or barriers. When you are accepting payments through Bitcoin, you can simply accept the payment from anyone and anywhere across the globe.
Cons Of Bitcoin For Small Businesses
Along with all the benefits we have mentioned in the above section, Bitcoin payments for small businesses also come with several disadvantages.
1. Volatility
Volatility is the most prominent feature of Bitcoin, just like any other Cryptocurrency. By November 2021, the price value of Bitcoin was more than $68,000, and then by the mid of June 2022, the price dropped to a little more than $25,000.
2. Taxes
When you are accepting Bitcoin payments, you are required to ensure that you are immediately exchanging them for cash. Otherwise, you will get a tax headache. Suppose after you get the payment with Bitcoin, the price value of Bitcoin increases; now, you will need to pay more tax than what you have actually received.
3. Security
One of the biggest concerns about Bitcoin is security. To be honest, almost a quarter of all financial malware attacks always target Bitcoin, as per reports. It also has been found that 14% of all malware or cyber attacks came from Bitcoin mining malware and from Bitcoin wallet theft 8%.
Final Talks
These are the major advantages and drawbacks of Bitcoin for small businesses. Just like any other thing, Bitcoin also comes with pros and cons.
Here you have to ensure that you are taking appropriate security precautions in order to enhance the security. And in order to reduce the tax, you have to exchange the Bitcoin you are recovering immediately for cash.
