Cryptocurrency is all the buzz these days with Bitcoin soaring and investors scrambling to make sense of its current use, value, investment, and future. Crypto gained momentum in 2017 with 1 Bitcoin surpassing the $15K mark and opened the door to use the coin itself, as well as other altcoins, as currency for goods and services. Question is, why should online merchants jump to add cryptocurrency as a payment option at checkout?
1. Expand your payment options and increase sales
You may not understand cryptocurrency in its entirety, and there are very few people who do, but understand this — it is a form of valued currency that people have and are interested in spending.
The first universal credit card was introduced by Diners’ Club, Inc., in 1950 followed by American Express and Visa in 1958, then MasterCard in 1966. It was almost 20 years later in 1985 Discover Card came along and not many merchants adopted this form of payment — until they learned it was a preferred payment method for many consumers because of its no annual fee and higher credit limits. By merchants adding Discover card as a payment option, they were able to increase sales and expand customer base — this theory may also be applied to adding cryptocurrency as a payment option in 2018.
2. You control the fees you pay on transactions and avoid chargeback fraud
Cryptocurrency transaction fees are significantly less than most payment processors which charge around 3% per transaction. Current Bitcoin fees are around $1 per transaction and are projected to decrease. The higher your transaction fee, the quicker you will receive payment. If you are not in a rush, set a lower fee payment — instant added profit to your sale.
Additionally, a buyer cannot reverse a cryptocurrency payment. Once the transaction is complete, there is no way they can reverse the transaction. You would have to manually initiate a payment back to your customer, thus avoiding chargeback fraud.
3. Option to keep your payments as cryptocurrency and possibly earn more on your sale, or cash-out immediately
Price volatility is a known fact in cryptocurrency. Prices change minute by minute, day by day. For example, on May 15, 2017 at 8PM EST, the price of 1 Litecoin was valued at $25.76. Nearly a year later on May 10, 2018 at 11:40AM, the price of 1 Litecoin was valued at $157.07. If your online store sold 1 item last year for 1 value of Litecoin, and you retained the Litecoin by not cashing out, you would have $131 profit on top of your profit from the original sale.
As Isaac Newton once stated, “What goes up must come down.” Newton’s theory applies to cryptocurrency. If you are not interested in rolling the dice, you have the option to cash out to fiat immediately to ensure you retain your original profit. The prices of coins will begin to settle as we see more real-world adoption of cryptocurrency.
Easiest way to start accepting cryptocurrency is with BitPay or Coinbase, two popular payment solutions. BitPay charges 1% on each transaction while it is free to use Coinbase. However, when cashing out with Coinbase to your bank, they charge a 1% fee, but only after your first $1 million.
Victoria Stiles is the Founder and Creative Director of online store NATTYMOD (www.nattymod.com). She is a blockchain investor and her store is cryptocurrency-enabled. NATTYMOD is a 2018 Business Ambassador to the ASPCA and is a proud supporter of the animal welfare organization and their mission to save lives. (www.aspca.org)