Should Businesses Accept cryptocurrency as a mode of payment?

Since Big companies like Mastercard, Starbucks, Microsoft started accepting cryptocurrency as a mode of payment, whether businesses should accept virtual coins as a mode of payment or not is one of the most trending topics of debate throughout the entire financial Industry.

The impact of cryptocurrency is revolutionizing the methods of transactions globally was exemplary. In the modern era, when an individual starts a conversation about investments in the financial markets, the primary thing which strikes the mind is probably cryptocurrencies and bitcoin.

In the last two years, since the world witnessed the global pandemic, the prices of numerous cryptocurrencies surged significantly, where few skyrocketed even by 5000-7000%. Check for more details about cryptocurrency trading. Because cryptocurrency is a very new technology in the market, with over a decade of existence, many people have a robust notion that virtual can lead to dire consequences for businesses. 

However, they lack a fundamental value and parameters for analysis and reliance, which goes hand in hand with the high volatility of the prices. However, companies like Roadway, headquartered in New York and initiated accepting cryptocurrencies in 2017, which became their most lucrative decision ever, turning their profits in millions of dollars. 

Consider your business model.

Before considering the cryptocurrency, you should first access and analyze a few things about your very own business model and whether virtual coins as a mode of payment will suit your business or not??

Starting gaining knowledge about the cryptocurrency markets is an excellent first step of the procedure. Then, you can go through a few cryptocurrencies oriented courses affiliated with credible universities or institutions. Moreover, you can learn how cryptocurrency works and the trends, price fluctuations, risk management, trustworthy platforms and many more from the internet. 

Furthermore, since every transaction via cryptocurrency is treated as a tax realization event, maintaining compliance and documentation can take ample time and money. Therefore, many financial experts advise not to accept cryptocurrency as a mode of payment to avoid complexity or to use it only for a few specific transactions. 

You should consult your accountant about whether your business model and tax profile are suitable for a transition towards cryptocurrency or not. 

Pros and Cons of cryptocurrency 

Processing fee: The cryptocurrency is one of the cheapest modes of money transactions as its transaction fee varies typically from 1% to even 0 % in some cases. At the same time, financial tools like credit cards and debit cards may even charge up to 3% or more in some cases. The cheap transaction facility that crypto provides to its users gives users an upper hand over others in terms of cost-cutting and easy transactions. 

Volatility: Cryptocurrencies are volatile and can fluctuate drastically in a brief period. The increase and decrease in the prices even by 1000% are widespread in the market. Therefore, before accepting cryptocurrency as a mode of payment, businesses should consider the risk management factor on their digital coins and impose a stop loss accordingly on every virtual coin accepted. However, in the case of Roadway, cryptocurrency turned out to be a great decision. 

Security: A cryptocurrency is a digital tool made for payments; all the transactions made via cryptocurrency are recorded and can be tracked as per the user’s convenience; therefore, it is considered very safe. Bitcoin is even considered uncheckable by many technology experts and institutions. But it can also be a bane for the user if they forget their password; it is impossible to retrieve the money as it is decentralized, and no organization is liable for the loss. 

Practicality: Accepting cryptocurrency as a mode of payment is different, but using the coins with a pragmatic approach in the real world can be complex. Primarily, it is not accepted everywhere globally and is restricted to only a specific sector. So, for example, cryptocurrency can’t be used as an operating expense in the company and several other day-to-day activities in a company that will still work only with the help of traditional financial tools. 

The acceptance of cryptocurrency is skyrocketing throughout the world. Unquestionably, it will soon be a part of every individual’s day-to-day life in one way or the other.  

An informative guide to cryptocurrency
An informative guide to cryptocurrency
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