By Sherri Carrier
Technology constantly alters every aspect of our society, and it didn’t spare our mode of payment for goods and services. Currently, in the financial transactions sphere, we have PayPal, Amazon Pay, Apple Pay, cryptocurrency, and other various online payment methods. Cryptocurrency is a relatively new payment system, with many people trying to figure out how it works.
However, there are currently more than 2,000 distinct types of cryptocurrency. In this article, we discuss the far-reaching influence of cryptocurrency and the pros and cons of using this digital financial currency.
Influence of Cryptocurrency in the Business Sector
Researchers at essay writing service UK claim that the importance of cryptocurrency cannot be ignored anymore. Cryptocurrency involves using virtual tokens or coins, which are used by private individuals and companies alike for operational and transactional purposes, and undoubtedly investments.
According to some estimates from late 2020, it was established that about 2,300 US businesses accept bitcoin as a form of payment for transactions, excluding Bitcoin ATMs. Cryptocurrency is a form of digital payment system that doesn’t rely on banks to verify transactions., thereby making running financial processes easier and faster.
Cryptocurrency may take the form of coins, and as there are two sides of a coin, we have the good and bad of using cryptocurrency in business. You may have been feeling left out or reluctant to adopt this as a payment method for your business, and some of your fears are justified. So, we will be providing you with information to put on a scale and weigh if it’ll do more harm than good or vice versa to your business.
Pros of Using Cryptocurrency in Business
Technology enthusiasts at Aussieessay writers suggest that the benefits of using cryptocurrency are significant, especially in virtual businesses. Here are some of the benefits.
- It is secure and fast: Cryptocurrency uses encryption to verify transactions. Hence, the name “cryptocurrency.” Advanced coding is involved in the transmission of data and transactions processes; there is blockchain tracking of each coin and wallet. The end goal is to enhance safety and security. Also, in comparison to fiat money, transactions involving cryptocurrency are concluded much faster. Speed is imperative in the aspect of receiving and processing payments in businesses.
- Growth of the company: Growth is characterized by change, and times are changing. Many people have opened their minds to digital currencies, and customers are demanding faster, easier means of payment. Adopting cryptocurrency into your business places it in this important emerging space for currency evolvement.
- Creates an avenue for gaining high profits: Having the capability to provide your clients with as many payment options as possible is a win for your company. The ultimate goal of a company, or most companies, is to make profits. The more cryptocurrencies you feature as possible payment options, the better your user engagement and conversion rates will become.
- It reduces “friendly fraud”: Friendly fraud, commonly known as chargeback fraud, is a situation whereby a cardholder contacts the issuing bank to reverse payment or obtain a refund while still keeping the items gotten from such transaction. This is not an issue with cryptocurrency, thanks to its rigid tracking system around blockchain technology. Essentially, it is almost impossible to carry out a chargeback fraud.
- Low transaction fees: A lot of payment services places extra charges on transactions. PayPal, for instance, charges up to 4% per transaction (or sometimes more). Meanwhile, cryptocurrency transactions fees are close to nothing, or sometimes, even nothing. For instance, Binance, which is one of the world’s best-known crypto-trading companies, charges about 0.04 – 0.10 percent fees on transactions, which is determined by trading volume.
- Removes Intermediaries: Cryptocurrencies were created to oust middlemen; banks, and online marketplaces. Blockchain set to achieve this by replacing the central system with a decentralized ledger of chained records where everything is interconnected.
Cons of Using Cryptocurrency in Business
Despite the various benefits of cryptocurrency, it still has its negative aspects. These disadvantageous aspects are:
- It is highly volatile: Cryptocurrencies are extremely volatile; their values can vary significantly. In a single day in May 2021, the price of Bitcoin dropped by about 30% before recovering down to 12%. Its volatility might be influenced by security breaches, the uncertainty of its future value, bad news, among other factors.
- It is not widely accepted: Cryptocurrency is still not generally accepted. Digital currencies are still foreign to some people. So, you have to consider if your clients prefer to use digital currencies or not. Some people who even possess wallets and coins prefer not to trade using them but to go for fiat money or other traditional means of payment.
- Complex set-up process: In comparison to other transactions channels, setting up your cryptocurrency payment options may require additional efforts and time. You could create your business’ wallet or opt for third-party exchange services, which will act as an intermediary between you and your clients. In the long run, you may consider these as minor setbacks, but it may be a huge turn-off initially.
- The responsibility of protecting your digital assets rests solely on you: In circumstances where you lose your virtual wallet as a victim of a hack or delete your currency, you have to bear the consequences yourself. It is similar to an instance where someone takes your debit card and withdraws all your money, but in the case where your virtual wallet is hacked, no bank is going to replace it for you.
- Migration: As established earlier, there are over 2,000 different types of cryptocurrencies. Consequently, if other companies and even your clients migrate from one digital currency to another, what happens? The value significantly dips.
- There are no established bodies like the Financial Conduct Authority to regulate financial activities: When it comes to cryptocurrencies, your business may be vulnerable to scams and the likes, as there are no rules to protect it. It is also risky in contrast to investing in the stock market.
- Highly vulnerable to scams: The foundation of cryptocurrency rests mainly on the new and developing technology areas such as Blockchain. The effect of the newness of this technological aspect is that internet fraudsters and hackers can take advantage of this critical factor to defraud cryptocurrency owners through social media platforms such as Facebook, Twitter and Instagram. Fake investments schemes related to cryptocurrency have been used to scam crypto-users, resulting in profit loss.
Having considered the benefits and the not-so-alluring aspect of adopting cryptocurrency as a means of payment in your business, I hope you’re able to make a decision or reach a conclusion that is beneficial to your company. Sometimes, one needs to take that bold step while considering its worth.
About the Author
Sherri Carrier is a professional writer that engages in dissertation writing services and dissertation help. Sherri writes at assignment help UK and is a member of several writing clubs in New York. She has been writing her own poems since she was a child. The young author gets inspiration from her favorite writers and people whom she loves.