There has been a great deal of debate over whether Bitcoin is a fad or a permanent payment method. Many small and major businesses are accepting Bitcoin. Still, others have been finding out about some of the challenges in adopting Bitcoin. Is Bitcoin right for your business? Let’s have a look.
- Fees: Credit cards have made so many of our lives easier. But if you are a small business owner, the fees (especially American Express) can be very high. Some estimates put credit card fees / rates as high as 3-5% of transactions. For a small business owner who is living on a very thin margin, 3-5% can be a huge amount. On the other hand, Bitcoin merchant account fees are at about 1%.
- Fraud: Have you ever considered how much information there is floating around there about your customers and their buying habits? It’s all right there in all of your credit card processing transactions. Their names, birthdates, Social Security numbers, and credit card account numbers are all out there for anyone to have access to. It’s really rather startling for any of us to consider. But with Bitcoin there is nothing to fear. Bitcoin is something of a virtual cash dispensary. There is nothing linking any customers identity with their Bitcoin purchases. That can be huge for so many people who don’t want their personal information shared or divulged. As the preferred provider of Bitcoin services that’s a one up for you and your business!
- Chargebacks: Bitcoin eliminates chargebacks. Many businesses get frivolous chargebacks that take time and energy to dispute. In most cases, while a chargeback case is being investigated, your merchant provider holds those funds until the issue is resolved. With Bitcoin, you have more control with returns overall.
- Speed: Another thing about Bitcoin which many business customers have discovered is the speed which money arrives to your account. When dealing with regular credit card transactions, your money can be locked up for as much as ten days. As a small business, you need access to cash on hand and Bitcoin allows for this.
- International: Another thing about being a small business is that you are limited by the scope of geography and place in the world that your merchant provider allows you to process. When you accept Bitcoin, this widens your overall reach. There is no need to worry about conversions, there is no need to worry about international banking issues, and you can save as much as 8% in international transaction fees.
- Acceptance: Because it’s still not widely accepted, it’s still not widely understood. Wider Bitcoin acceptance is going to be the real sticking point for users.
- Learning curve: Consumers have a learning curve when sending Bitcoin and it takes people some time to understand the entire concept behind it.
- Loss: If your hard drive crashes or a virus corrupts your data, your Bitcoins can be “lost” if not backed up. You will lose all the value of your Bitcoins and there is no way to recover them.
- Fluctuation: You can buy or be holding bitcoin and from one day your value can go up or down.
Conclusion: For most small businesses, the fluctuation of the currency alone may be enough reason to not accept it. Now, every business may have unique reasons for choosing to accept Bitcoins, and a diversified portfolio of payment options is never a bad idea.
Looking for solutions aside from a Bitcoin merchant account? Painless Processing can help!