But, at heart, the electronic currencies serve a practical purpose in terms of business: they allow customers to pay for goods and services.
For that reason, many store and restaurant owners are wondering if they should accept Bitcoin and other cryptocurrencies.
There are several reasons why Bitcoin and other cryptocurrencies would be attractive to merchants but there’s also some reasons for caution. Here are some things to consider:
Chargebacks Are Not Allowed
This is obviously a reason in favor of accepting Bitcoin at your business. You can think of it as cash in most instances. Once the transaction is complete, the money is in your account. In other words, there is no waiting or settlement period the same way there is with credit card payments.
If the customer wants a chargeback, they will need to call you, the merchant, and request a refund.
It Protects Against Fraud
Because customers can pay with Bitcoin without using any personally identifiable information, there’s nothing to steal in terms of names, addresses, social security numbers, PIN numbers, or anything else that the customer would worry about.
Again, it’s similar to cash from that perspective. Only the money is exchanged and nothing else. But, in this case, it’s all digital instead of physical.
It May Not Be Worth As Much Tomorrow
As mentioned earlier, the prices for Bitcoin and other cryptocurrencies have been very volatile over the years. In fact, Bitcoin lost about a third of its value within a 24-hour time period last December.
The potential for a loss in value is real but, on the other hand, the opposite is also true. The prices may rise and you’ll find that you have something worth more than it was a few days ago.
And therein lies the problem: the price swings are dramatic and unpredictable. But, merchants can dodge some of that variability by setting up their business so that they instantly sell the Bitcoin received from a sale and convert it into dollars.
Selling right away may help ease some of the volatility and it may have a second benefit: the IRS considers Bitcoin and other cryptocurrencies to be property, not currency. Therefore, any capital gains or losses need to be reported. Selling as soon as you receive the Bitcoin will likely mitigate any tax issues.
It’s Easier to Accept Money from Overseas
Because Bitcoin is not tied to any particular government and it can be exchanged over the Internet, there’s no boundaries for its use in international trade.
What does this mean for your business? If you want to begin selling goods or services overseas, it’s easy to do so by accepting Bitcoin for your business. You can presumably accept orders and payments through a website and then ship the goods to wherever the customer lives.
Interested in learning more about Bitcoin and cryptocurrencies for your business? Here are a few links to get started:
Have questions about your point-of-sale options? Contact us today to get the answers you need.