By Martin Desmond
According to Crypto.com, global cryptocurrency usage numbers doubled within four months in the first half of 2021. As more consumers begin adopting crypto, small businesses will have no option but to rise and meet the occasion.
Today, several businesses have already done so, making them well-positioned to meet the ever-increasing needs of the crypto-verse. In this article, you’ll learn how to begin accepting crypto payments in your small business. Read on for more!
Accepting Crypto Payments as a Small Business
A nationwide survey conducted by HSB in 2020 showed that close to 36% of all registered small businesses had begun accepting crypto payments. If your business isn’t in this bracket, it’s high time you did so to help you catch up with your competition.
Of the business owners who took part in this survey, 50% said they got motivated to adopt crypto after seeing its adoption by large innovative companies and major payment processors. 35% said that they adopted crypto payments to meet customer demands.
While some small businesses have chosen to adopt crypto payments to catch up with their competition, others have done so to become more efficient. The reality is that there are many benefits to using cryptos, e.g., bitcoins in small businesses. Some benefits include:
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Getting rid of the chargeback fees that can cut into your profits
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Boosting your international reach
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Low processing fees
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Faster and more secure payments
Though they are cheap and fast, these payments also come with several downsides. Increased risk of cyberattacks and high volatility are the most common. However, it’s possible to minimize these risks based on how you choose to adopt crypto payments.
How You Can Begin Accepting Crypto Payments as a Small Business
Contrary to what you may think, it doesn’t take much to begin accepting crypto payments. Follow the steps below to get you started with this process:
Step 1: Set Up a Crypto Wallet for Your Business
The first step requires you to set up a cryptocurrency wallet, which you’ll rely on when sending and receiving cryptos. Opt for a multicurrency wallet, as there are chances you’ll trade with consumers using different types of crypto.
Multicurrency wallets can hold different cryptos at a time, making it unnecessary for the business to operate more than one wallet at a time. Currently, the most popular cryptos in the small business community, in order of preference, are:
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Bitcoin
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Bitcoin Cash
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Ethereum
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Litecoin
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Binance
Choose a wallet that will allow you to hold all these different cryptos at a go.
Step 2: Integrate Crypto Payments to Your eCommerce Portal
You should only integrate payments into your eCommerce website after you have confirmed that the wallet is operational. Small businesses that run their stores on popular platforms such as WooCommerce should consider looking for plugins to simplify integration.
If you fail to find the right plugin, consider using the services offered by a crypto payment processor. These payment gateways will provide you with several ways that you can use to accept crypto payments in your eCommerce store.
Depending on the gateway chosen, you may find options such as paying invoices and payment buttons. Today, leading crypto payment gateways include BitPay and CoinBase Commerce. Ensure you select a crypto gateway that:
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It is safe, uses a user verification process, and has a tight sign-in process
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It has excellent reviews and an outstanding reputation
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Offers low transaction rates
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Provides additional benefits, e.g., recurring payments, invoicing, and other accounting options
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Easily integrates with the platforms you need to run your business
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Enables you to settle crypto payments in more than one currency
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Allows instant conversion to FIAT money as an insulation measure against market volatility
Small businesses that don’t want to integrate payments can choose to provide their customers with direct payments. All the clients will need is a QR code or your wallet address. Clients will need to enter the wallet address or scan the code to make a payment.
Step 3: Cushion Your Small Business Against Crypto Risks
Every small business accepting crypto payments needs to cushion itself against the many risks of trading in cryptos. Some of the measures you can use to safeguard your crypto include:
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Instantly converting Bitcoin and other cryptos to FIAT money: You’ll need to sign up with a payment processor such as BitPay that allows you to make instant conversions. Converting crypto to FIAT money will protect you against market volatility.
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Reducing your exposure to cryptocurrencies: A small business can accept crypto payments without having to deal with them directly. For example, you can request your clients to use the crypto option offered by PayPal. The payment processor will convert the crypto into US dollars once the payment gets processed.
Are there Factors You Need to Consider Before You Start Accepting Crypto Payments?
As with everything else linked to the eCommerce market, there are factors that you must consider before you can begin accepting crypto payments. In this case, these will include:
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Tax implications in terms of capital gains tax
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Your target audience
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Crypto regulation
Conclusion
Accepting crypto payments as a small business shows that you’re innovative and forward-looking. It will improve your brand image and make it more competitive. But before you do, use this guide to learn everything there’s to know about accepting crypto payments.
This article was written by Martin Desmond of Wizer Energy.
