Cryptocurrency, also called “crypto”, is an intimidating concept for many business owners. This is because most business owners do not understand what crypto even is.
And yet, according to a recent article on Inc., “One-third of U.S. Small Businesses accept cryptocurrencies as payment.” As a result of this growing trend, we’ve decided to explore crypto in this article. Specifically, what exactly is crypto and what are the benefits of accepting it in your business.
What Exactly is Crypto?
When people try to explain crypto they usually do so by saying that it is a digital currency. But this explanation is somewhat limited.
Crypto can best be thought of as a virtual coin that is designed to function as a medium of exchange. This begs the question of what a medium of exchange is. A medium of exchange is anything that is widely accepted in exchange for goods and services.
So, obviously dollars and cents have been mediums of exchange in the United States for a very long time. However, crypto is just starting to become adopted by individuals and businesses as a medium of exchange.
Now that we know that crypto is intended to function as a medium of exchange, we still need to explain what exactly is meant by a “virtual coin”.
A virtual coin is simply a set of data. These data sets or virtual coins are stored in ledgers, which are computerized databases that use strong cryptography to ensure the security of each person’s storage of coins.
These virtual coins are then transferred to another person’s or business’s ledger during a transaction.
Now that we have a better understanding of what crypto actually is, let’s take a closer look at 4 benefits of accepting crypto as a form of payment in your business.
4 Benefits of Crypto
BENEFIT #1: LOWER TRANSACTION FEES
For most businesses, accepting credit card payments results in fees incurred by the business of anywhere from 2% to 4% of the transaction. These fees are very frustrating for business owners because they cut into profit margins.
When it comes to crypto transactions the transaction fees are much lower because there is no central intermediary such as a bank that is driving up the fees. This makes crypto a desirable alternative to credit card payments and adds back profit to the bottom line of businesses.
BENEFIT #2: MERCHANT PROTECTION
Some customers abuse merchants by charging back items when it’s not warranted. These fraudulent chargebacks are a costly liability for business owners. By accepting crypto, businesses are immune to chargebacks because there is no central intermediary facilitating the transaction. This means that crypto transactions are like cash transactions and all sales are final unless approved by the merchant.
BENEFIT #3: EASE OF INTERNATIONAL BUSINESS
Oftentimes United States business owners have products and services that they wish they could sell internationally but are unable to because of currency differences. Since crypto is the same value across all countries, it makes it easier for businesses to transact internationally without having to worry about exchanging different currencies.
BENEFIT #4: INCREASING CUSTOMER SATISFACTION
As a business owner, it is possible that more and more of your customers will wish they could pay you in crypto. Some customers prefer transacting in crypto for a variety of reasons. One of these reasons is privacy. Crypto is not tracked the same way that the U.S. dollar is tracked. For this reason some customers prefer to pay in crypto. As a business owner, accepting crypto allows you to increase your level of customer satisfaction by including those customers who prefer crypto payments.
Auxilia is Now Accepting Crypto
Here at Auxilia we like to stay on the cutting edge of all technologies including cryptocurrency. If you are a customer who prefers to pay for your goods and services in crypto, your crypto is welcome here. We can easily accept your crypto payments! If you would like more information about crypto payment acceptance at Auxilia, feel free to reach out to us.