Should you have a crypto business account?
In the past ten years, technology has continuously innovated and strongly impacted people’s lives, especially the economic sector, with the advent of the cryptocurrency market. In addition to the traditional means of financial exchange via banks, e-wallets or electronic payment gateways, payment on the decentralized financial system with crypto business accounts is increasingly popular.
Suppose you are doing an online business, or you own an eCommerce business. In that case, you need to pay attention and learn more about payment methods with cryptocurrency. Customers who pay with cryptocurrencies have a much higher reputation and transaction volume than customers who pay via credit cards or banks.
In this article, we will explain Crypto Business Account and the pros and cons of using it for your business.
What is a Crypto Business account?
First of all, you need to understand cryptocurrencies. Cryptocurrency is an online payment alternative to the physical currency you are using (USD, GBP, EUR, etc.).
Cryptocurrency transactions are fast (just seconds) and are transferred directly from buyer to seller via digital wallets. Each cryptocurrency transaction is publicly saved on the blockchain system. Blockchain allows everyone to view cryptocurrency transactions on the system but cannot change or delete transaction history. This feature makes cryptocurrency transactions transparent and safe without the intervention of any third parties, including central regulatory agencies.
Today, many cryptocurrencies, such as Bitcoin, Ethereum, USDT, etc., are in the market with their values and trading rules. Bitcoin is the most famous and traded cryptocurrency in the world.
Crypto Business account is the most secure account for conducting cryptocurrency transactions for eCommerce businesses. As of the end of 2020, more than 2,000 businesses in the US accepted Bitcoin as payment.
Steps for your business to own a crypto business account:
- Seek legal advice to ensure that all licensing requirements are met.
- Get venture funding.
- Find a software solution provider. (Yield.app)
- Use security best practices.
- Start a marketing and public relations campaign.
- Provide electronic payment services to customers.
- Maintain an ongoing legal team to ensure compliance.
The addition of a form of payment in electronic money brings many unique benefits to online businesses. Here are some benefits:
- Safe and fast: Cryptocurrencies use encryption to verify transactions. The transaction and data transmission process is wholly encrypted and saved on the Blockchain to ensure safety and security. Compared to fiat currencies, transactions in cryptocurrencies are much faster. Fast payment transaction processing speed will benefit businesses.
- Company growth: The adoption of cryptocurrency payments in your business will open up a new market and new customer files to your business. As customers demand faster, more accessible payment methods, digital currency is necessary for your business growth.
- Opportunity to earn high profits: When your business has many payment options, it means you have a chance to increase revenue by meeting all the needs of your customers. Customers need to pay by any method you have.
- Reduce the risk of payment fraud: Some businesses have encountered fraud from customers when making payments. The customer asks the bank to cancel the payment or get a refund but keeps the items received from the business. For crypto payments, any transaction cannot be cancelled or reversed.
- Low transaction fees: Many payment services put extra fees on transactions. For example, PayPal charges up to 4% per transaction (or sometimes higher). Meanwhile, cryptocurrency transaction fees are almost zero or low transaction fees. For example, Binance, one of the world’s most famous crypto trading companies, charges around 0.04 – 0.10% on transactions, determined by trading volume.
- Eliminate intermediaries: Cryptocurrencies were created to eliminate intermediaries, banks, and e-wallets or online payment gateways. Transactions are recorded publicly on the Blockchain and go straight from the buyer to the seller.
Despite the various benefits of cryptocurrency, it still has its opposing sides. These adverse aspects are:
- Volatile value: The value of a cryptocurrency can change very quickly in a single day. The volatility in the price of cryptocurrencies can impact the financial position of the business.
- Not yet widely accepted: Cryptocurrencies, in general, are not yet universally accepted and unfamiliar to some. So you have to consider whether your target customer group is interested in using digital currency. Some people even want to pay with cash or other traditional means of payment.
- Complicated setup process: Setting up your business’s crypto payment options can take along. You can create a crypto wallet for your business or choose a third-party exchange service. The third-party service will act as an intermediary between you and the customer.
- The possibility of digital asset theft: If you lose your crypto wallet due to a hack or theft, you will lose all the assets you have. It is similar to the case where someone takes your debit card and withdraws all your money, but in case your virtual wallet is hacked, no bank will compensate you.
- Very easy to be scammed: The foundation of cryptocurrencies is mainly based on new and developing technology areas such as Blockchain. Internet scammers and hackers can trick cryptocurrency holders through social media platforms like Facebook, Twitter, and Instagram. Fake crypto-related investment schemes have been used to defraud crypto users, resulting in loss of profits.
Coins always have two sides, and using a crypto business account also has a positive and a negative side. You may feel nervous about adopting this as a payment method for your business. That’s normal. We hope that the information provided above can help you balance and consider whether crypto is doing more harm than good or vice versa for your business.