Are you in a dilemma about whether to accept Bitcoin in your business or not? Then you need to weigh the pros and cons of this decision before implementing it! Bitcoin is the newest currency in town, and loads of people are trading and using it through platforms like Coingate. So being a considerate business owner, it becomes your duty to figure out whether it is helpful to keep that transaction option in your company.
So here are the main advantages and disadvantages of accepting Bitcoin in your business. Let’s get started!
Advantages Of Accepting Bitcoin
Better Payment Security
We have seen a massive surge in credit and debit card frauds in the last couple of years. And more often than not, small business owners are the ones who suffer during these moments. But with cryptocurrencies like Bitcoin, you can avoid these problems altogether.
Bitcoin is considered much safer than debit or credit card payments since there is no need for third-party verification. So if your customers pay you with Bitcoin, their information is stored only in their crypto wallet. And thanks to the Blockchain ledger system, it is also impossible to steal one’s identity through these transactions.
Bitcoin transactions are also irreversible, making it easier to manage your cash flow. You won’t have to worry about any chargebacks, and if anyone requires a refund, you can send back the amount.
However, make sure that your employees keep an immaculate record of every customer transaction. Only then will you be able to pay them back the exact amount they have sent you during their purchase.
For most payment processors, you have to pay heavy setup and transaction fees. For example, PayPal itself charges almost 4% with every transaction. It can stand up to an excessive amount by the end of the month, slashing down your profits considerably.
However, with Bitcoin, you won’t have to worry about losing a chunk of your profits, and you won’t have to pay so much. It charges just 1% for every transaction. And since they have ties to any country or national banks, you won’t have to incur international fees either!
Easy Foreign Payment
Several business owners are afraid of going into the global market because of foreign transaction fees and currency exchange problems. Not only are they very confusing from the accounting perspective, but they are also very expensive.
But as we discussed before, with Bitcoin, you won’t have to worry about these things at all! This cryptocurrency is global, making it easier for owners to make international transactions. You can easily expand your business without bearing any of the transaction fees or the hassle.
Faster Money Transaction
Lastly, Bitcoin payments ensure faster, immediate money transactions. With debit or credit cards, a business owner won’t see the money for some time. Due to different regulations, it can take anywhere between three days to a week for the money to reflect in their bank account. And this becomes very problematic if you need liquid cash to pay your staff salary or bills.
With Bitcoin, once the transaction has been verified, you can see it reflected in your account within a few moments. It can help you maintain your working capital to ensure your business doesn’t suffer.
Now that we know about the pros of accepting digital currency let’s look at its disadvantages.
Disadvantages Of Accepting Bitcoin
Complicated Tax Implications
Most countries consider Bitcoin and other cryptocurrencies as property under the tax slab. So if you do accept Bitcoin in your business, you have to report it under gross income depending on its fair market value when you receive it. So if you use, buy, or sell Bitcoin, you have to pay tax on capital gains.
You also have to track the coin’s value on the day you receive it, and the day you sell it. So if you are unable to keep track of it, it will become severely complicated.
Lastly, we are super grateful that cryptocurrencies like Bitcoin do not fall in the clutches of inflation. No government or bank can influence its prices, which becomes a blessing and a risk. How?
On the one hand, Bitcoin works as a barrier against any monetary inflation in the market. But it is also extremely volatile. For example, Bitcoin reached 8% on the volatility scale in just three months. So being a business owner might pose a threat to accepting such a volatile currency.
Now you know the implications of accepting Bitcoin in your business. While it does have some disadvantages, the advantages surely outweigh those, and it can prove to be quite useful for your company’s growth. We hope this article provides you with all the details to make your decision easier. All the best!