All around the world, forward-thinking businesses of all sizes are accepting Bitcoin payments to cut the cost of operation and improve their bottom line. But if you’re still unsure out about accepting Bitcoin and how this will boost your sales, here are the top reasons why you should reconsider.
Lower transaction fees
In general, the transactional fee for accepting Bitcoin is much lower than the fee charged for credit or debit card purchases. In fact, this might be the most significant reason why small businesses are starting to accept Bitcoin payments. Compared to large companies, small businesses pay higher credit card fees on average. Large, enterprise level organizations that have scale can negotiate a much lower transaction fee. Since small businesses cannot negotiate the same, most pay a 2-4 percent fee per transaction plus other hidden fees. However, accepting Bitcoin could reduce your credit card processing fee to less than one percent.
Prevention of fraud
Since people can make payments without divulging personal identifiable information such as names and billing addresses, Bitcoin offers a higher level of identity-theft protection than credit cards. Bitcoin is a lot like digital cash, making interception and identity disclosure literary impossible.
It’s however notable that in the United States, Bitcoin exchanges often collect personal identifying information such as names, addresses and bank account numbers from their users before establishing their Bitcoin wallets.
Unlike credit card dealings, Bitcoin purchases are final, which means there are neither chargebacks nor returns. As a result, transacting in Bitcoin helps businesses save money.
Credit card chargebacks occur when a cardholder contests a transaction completed using his/her card for reasons ranging from defective items or failed deliveries to unauthorized purchases.
Aside from withdrawing the disputed amount from a merchant’s account and depositing it back into the client’s account, the credit card company will typically charge your business a costly chargeback fee.
On the other hand, those who purchase in Bitcoin will have no recourse in dispute. Bitcoin purchases are generally perceived as transactions done in cash, which makes them final and insulates entrepreneurs from the likelihood of chargebacks and the associated fees. In simple terms, this virtual currency puts all the power in the hands of the merchants.
For small businesses, having access to cash is usually critical to survival. Fortunately, accepting Bitcoin payments puts cash within reach a lot faster that accepting credit card payments. In simple terms, accepting Bitcoin provides you with the ability to get paid quickly.
With credit cards payments, the problem is that your funds are likely to be locked up for around a week and held in some sort of escrow just in case a user requests a chargeback. In general, the same does not apply to Bitcoin payments. For instance, payouts often arrive in merchant bank accounts within two business days at Coinbase.
Bitcoin payments settle at the moment of transaction. When a client pays in Bitcoin, the entrepreneur receives and sells the Bitcoin to Coinbase for conversion to U.S. dollars. Merchants are guaranteed their money at that time.
Easier international payments
Expensive cross-border transaction fees have kept small retailers from trading internationally. But Bitcoin helps to relieve the steep cost of conducting business globally by making cross-border payments a lot easier, much quicker and significantly cheaper. By accepting Bitcoin, businesses can receive payments from anyone and anywhere as fast as an email. Additionally, the much lower transaction fees can help you save as much as eight percent.