It should be clear by now that over time, technology is going to influence how people transact business.
As a business owner, it’s incumbent on you to accept this fact and prepare yourself and the business to accept new challenges.
While it may seem cryptocurrencies like Bitcoin have been around forever, the truth is the whole cryptocurrency revolution is still in its infancy. While many people view cryptocurrency more in terms of an investment option than a means of exchange, the reality is quite different. Merchants all over the world are starting to realize that payment by crypto may someday be a must, not a choice.
Is your business ready to start accepting cryptocurrencies as a payment option? If not, the following information should help you understand why your business should be heading in this direction. It will also explain the challenges that lie ahead.
Providing Service to Customers
As a business owner, servicing your customers should always be a top concern. While the demand to accept crypto payments now might be small, that’s something that could change in a hurry. When the tide does change, the ability of your business to accept crypto could give the business a competitive edge.
With that said, it’s possible this whole issue could be a lot simpler to address. There is nothing wrong with offering to accept coins like Bitcoin or Ethereum just as a matter of convenience for customers. If there are takers, that’s fine. If not, what’s loss by having the option available?
Dealing With Value Volatility
Unlike fiat currencies, cryptocurrencies will always offer challenges in terms of valuation. That’s one of the reasons consumers still seem to view cryptocurrencies as investment vehicles and not a means of payment.
As a business owner, you have to be ready to deal with the fact that cryptocurrencies like Bitcoin are volatile. A portion of coin placed in a crypto wallet today might rise or drop in value by as much as 10% overnight. That wouldn’t necessarily be a huge problem for a business that has limited crypto transactions. However, the volatility problem could have a major financial impact on a company that is transacting a lot of business through cryptocurrency.
By the way, there is no safe haven. All cryptocurrencies tend to move in the same direction at the same time. Bitcoin might be more volatile than say Ripple, but both coins will have similar valuation patterns.
The solution is easy but not so easy to follow. There would need to be a mechanism or process in place that would immediately turn a crypto payment into fiat cash within hours. Today, this can be done by buying and selling cryptocurrency through an exchange. It’s the only reliable way to ensure a coin doesn’t lose value after the business has been transacted.
Preparing to Handle Multiple Cryptocurrencies at the Same time
For the longest time, it looked like Bitcoin would be the dominant coin. In the last couple of years, it has become clearer that several coins could end up being major players in the crypto space.
Since this is where the market seems to be going, the pressure is going to fall on business owners not to discriminate against certain coins. If a business is going to accept Bitcoin, they don’t want to risk losing business from customers who prefer to use Litecoin, Ripple, or Ethereum.
Fortunately, most crypto wallets are set up to accept a wide range of coins. As the business owner, you would have the inconvenience of actively monitoring your wallet and making conversions as frequently as possible. With that said, that could be a small price to pay for accepting a variety of cryptocurrencies if it will entice more customers to transact business with your company.