Last updated on December 9th, 2024 at 10:27 am
There’s an increasing adoption of cryptocurrency by businesses to improve their financial liquidity and ensure transparency in transactions while also attracting new customers.
Furthermore, cryptocurrency is a technological trend that will continue to provide opportunities for businesses into the future and not just a short-term fad.
Cryptocurrency is a digital form of currency that differs from traditional fiat currencies used globally for transactions. Cryptocurrency isn’t issued or managed by one central institution but is distributed and run on blockchain technology to provide a ledger that tracks transactions.
History of Cryptocurrency
Before the creation of Bitcoin, there were some digital currencies like B-Money and Bit Gold but they couldn’t attract interest or establish themselves in the financial markets. On October 31, an organization by the name Satoshi Nakamoto published a scientific paper titled Bitcoin: Peer-to-peer Electronic Cash System that detailed the concept of Bitcoin.
In early 2009 Bitcoin software became available for mining. Investors like Gavin Andersen bought $10,000 for $50 and the first transaction was carried out by Laszlo Hanyecz who bought two pizzas with $10,000 Bitcoins.
This led to the idea of decentralized digital currencies that birthed Ethereum projects and in 2013 the price of a single Bitcoin hit $1,000 for the first time.
Crypto Payment Gateway for Businesses
Businesses that want to offer cryptocurrency options at checkout have various options to choose from. important factors to be considered are, the range of cryptocurrency that can be assessed, speed of processing, fees, ease of technicalities, and security.
BitPay
BitPay offers businesses the leverage to directly deal with cryptocurrencies by settling payments in cash. This means that BitPay connects traditional financial systems and digital currency platforms to cushion the effect of the cryptocurrency volatile market.
For instance, sometimes funds might be reversed by traditional financial institutions which could lead to fraud. BitPay has eliminated all this Chargeback by providing another layer of security for businesses. It also supports numerous wallets and over 16 cryptocurrencies for businesses in more than 229 countries.
Coinbase Commerce
Coinbase is an easy and flexible payment gateway for new business owners with 1% transaction fees and two wallet management options. Coinbase Commerce has multi-asset support that offers over 10 popular cryptocurrencies without merchants sifting through complex APIs.
For instance, a business owner can set up his Coinbase Commerce payment to be managed by himself or Coinbase depending on comfort level and technical expertise.
CoinGate
CoinGate enables merchants to use Bitcoin and altcoins for transactions while accepting payment in fiat currencies with lower transaction fees of 1%. CoinGate provides plugins for e-commerce stores with the integration of shapeshift to allow merchant accept cryptocurrencies.
The acceptance of over 70 cryptocurrencies and modification of settlement balance instantly by CoinGate has broadened Cross-border payment beyond limitations like delay payment caused by traditional financial institutions.
PayPal
PayPal is a top gateway payment that’s easy to use and convenient for merchants to convert crypto to US dollars without any hassle. PayPal combines traditional and digital finance to allow sales of crypto to fund purchases.
PayPal has a built-in price alert system that activates notifications for any significant price changes to caution merchant in their day-to-day holding of crypto.
Binance Pay
Binance Pay is a borderless and secure crypto payment technology designed by Binance to shop with crypto at merchants without restrictions.
You can connect your Binance to stores by simply, clicking on the merchant ID and secret key in the payment gateways settings.
Then the payment screen will look like this.
In the world of cryptocurrency, it’s important to use stablecoin like USDT that offers stability and wider acceptance which plays a critical role in the decentralized finance ecosystem. USDT offers price stability, enhances access, and increases privacy because Tether claims to hold assets equal to or greater than the total number of USDT tokens in circulation.
Though they’ve been controversy surrounding Tether reserve, the company has managed to maintain its peg to the US Dollar and also regularly publishes daily reports on its website to provide transparency into its reserve holding and number of outstanding USDT tokens.
Benefits of Cryptocurrency To Businesses
They’re various cryptocurrencies, though Bitcoin and Ethereum are the most prominent ones. Here are some of the benefits of Cryptocurrency for businesses:
No Paper Money Required: Cryptocurrency doesn’t require paper for transactions and it is easy and flexible to do business. Cryptocurrency comes in handy because there’s high risk of physical money being mishandled by users.
Access To New Liquidity: cryptocurrency helps investors to raise funds and improve financial liquidity. Businesses could be loaned crypto without being subjected to the same limitations associated with assessing loans for fiat currencies. It’s noteworthy that in the early stage of cryptocurrency, funds were often raised via an initial coin offering (ICO). New cryptocurrencies are first minted and offered in exchange for much publicity and investment.
Expanded Payment Methods: this can help businesses with broader means of payment options without limitation.
Potential For New Customers And Demographics Group: this can help improve patronage of business by customers and age brackets because there’s an easy and flexible payment option.
Entry into The Web 3.0 World: Cryptocurrency serves as the gateway to venture into Web 3.0 technologies to offer or sell your services.
Transaction Transparency And Audibility: Cryptocurrency provides an immutable ledger to record transactions. The high degree of audibility of the ledger allows businesses to track audit transactions to enable transparency.
Extra Layer of Customer Privacy: the blockchain on cryptocurrencies offers users privacy in all transactions by relying on public key cryptography.
Cross-Boarder Transaction: Cryptocurrency helps eliminate barriers faced by businesses when selling their product and services globally. It offers an alternative to businesses without the rigor of using bank or payment procedures.
Though the price of crypto can fluctuate, its value is consistent across the globe and has eliminated the complexities in currency conversion for easy and fast transactions.
Less Risk of Chargeback Fraud: It has helped reduce the risk of Chargeback fraud by introducing irreversible transactions through an immutable ledger.
Conclusion
Creating and maintaining a business using crypto payment is a challenging task that requires legal knowledge, a lot of capital, and some experience in the field in which your product will belong.
FAQ
Can a business invest in cryptocurrency?
Yes, a business can buy, hold, and sell cryptocurrencies.
can a business accept cryptocurrency payment?
Once you have the gateway properly set up, you need to let customers know about this new way to pay. This process can take some time, depending on the POS, e-commerce platform, and other shopping channels you use.
