“Cryptocurrencies are a big part of the emerging economy, although as a total percentage they are relatively small. Their rapid growth, however, should capture the full span of our attention.”
These were the words of Trust Payments’ CEO Daniel Holden in a recent interview with The Economist’s Future Banking & Payments project, as featured on the project’s hub.
It’s been debated at length if cryptocurrencies will come to overtake traditional fiat currencies, but whether or not this ever becomes a reality, businesses of all shapes and sizes should be prepared to embrace crypto and the myriad ways in which it will disrupt how consumers, companies and even entire industries will handle money.
Here are some of the top reasons why incorporating blockchain technology will help small businesses:
1. Cheaper, Decentralised Transactions
Blockchain-based technology enables transaction value to be exchanged between peers without a centralised authority. This represents a cheaper, faster and more efficient alternative to traditional payment networks. Accepting cryptocurrency payments as a small business is becoming increasingly important as they rise in popularity among tech-savvy consumers. Merchants can save money on processing fees by accepting digital forms of money, which may be crucial as they try and get off the ground. As cryptocurrencies become more prominent, start-ups will no longer need to go through the lengthy process of setting up a business bank account with a traditional bank to receive and distribute funds – instead, they can choose to bank with one of the raft of challenger banks springing up, who give businesses the flexibility to work with cryptocurrencies.
2. Customer Confidentiality
The loss of personally identifiable information to hackers leaves the affected customers vulnerable to identity theft and, ultimately, the loss of their finances. When a customer completes a transaction using a credit or debit card, they create an elaborate transaction history that can be abused and manipulated by criminals. The blockchain technology that facilitates cryptocurrency transactions keeps customers’ information encrypted and inaccessible. By offering cryptocurrency as a payment option, small businesses can make their business attractive for buyers who wish to maintain their privacy and are looking for an extra safety net to protect themselves.
3. High Transaction Speed
Cryptocurrency transactions happen in near real-time, meaning that it takes Bitcoin miners roughly 10 minutes to verify and facilitate a transaction from one wallet to another. There are even cryptocurrencies like Litecoin and Ethereum that verify transactions in as little as 20 seconds. This means that coins can be deposited into a merchant’s wallet in less than 10 minutes. This is much faster than the 2-3 days it can take for a credit card transaction to clear, meaning that small businesses can use these funds elsewhere much more quickly.
4. Worldwide Payment Methods
International payments have a number of touchpoints which often prove to be aggravating for both the customer and the merchant, including additional transaction charges, lack of cost visibility and delay in settlement. This can be particularly annoying when small businesses are targeting specific foreign markets, or use exports services and goods or purchases materials from other countries. Bitcoin and other cryptocurrencies help small businesses to avoid the expensive foreign transaction fees or exchange rates thanks to their universality.
5. Raising Capital
Cryptocurrency has altered the way that early-stage companies are able to raise capital. With Initial Coin Offerings, start-ups around the world can raise money quickly and cheaply from a wide pool of global investors. Additionally, the valuation of a company is almost immediately reflected by the market, as shares can be issued as tokens and become tradable almost immediately, bringing increased liquidity to the company.
6. Brand Visibility
Businesses that accept cryptocurrency stand out from the crowd. They are forward thinking and future-proof. By announcing acceptance of cryptocurrency, consumers can instantly distinguish these businesses from the competition. Moreover, cryptocurrency has a passionate community of users, who very often have a preference for buying from a business that isn’t afraid to be ambitious and flexible in its payment methods.
Trust Payments work with a diverse range of companies in touch with the world of cryptocurrency. Whether you are a cryptocurrency exchange platform or wallet, or are simply looking to accept cryptocurrencies for your small business, speak to one of our team of cryptocurrency experts today about how we can help you.