Merchants that accept crypto rather than credit cards for payments can expect to save as much as 3.5% — or more.
Tesla temporarily embracing Bitcoin (BTC) as a method of payment for its products was conceivably one of the catalysts that pushed asset prices to record highs last year and put the spotlight on crypto legitimacy — particularly in the realm of payments. Moreover, crypto enthusiasts had lauded the fact that Tesla even set up its own node to accept BTC and stated that it won’t swap its holdings for fiat, implying high confidence in the crypto’s long-term prospects.
But despite having backtracked and ceased Bitcoin acceptance a few months after due to climate concerns, Tesla was only a cog in the adoption machine of 2021. Starbucks, Whole Foods and AMC Entertainment were just some of the other juggernauts that made their foray into crypto last year. However, what’s apparent is that headlines play favorites to household names. For other businesses that want to hop on the trend, it’s a question of how to start.
Cointelegraph Research’s latest report provides answers. The 35-page paper goes over the booming trend in crypto acceptance and practical ways any business can integrate cryptocurrencies into their operations. Additionally, the report also looks at the future of crypto in payments, particularly concerning regulation, and a lot more.
Why should businesses accept crypto?
Cryptocurrencies are believed to be in a phase of hyper-adoption, and the 178% increase in the global crypto population is further evidence of that. For businesses, accommodating this growing demographic would mean an expansion of their potential client base. Receiving payments in crypto is also a lot cheaper when compared to TradFi methods, which may improve a company’s bottom line. Merchants could save up to 3.5% in fees — or more — if the payment method is in crypto rather than credit or debit cards.
Chargebacks are also another drawback with TradFi payment methods, costing e-commerce merchants $125 billion in 2021. Chargebacks are a type of payment reversal where the merchant returns the sum of money to the customer due to a transaction dispute or if the customer returns the purchased product. However, chargebacks can also be outright fraud, as some customers may dispute a transaction in order to secure a refund despite having zero issues with the product or its delivery.
The process of accepting crypto
Whether a company sets up its own node like Tesla or opts for a payments processor to facilitate the transaction, the way to do it is more or less the same but differs under the hood. For instance, certain payments processors can allow a merchant to receive crypto but would also enable real-time settlement in fiat. This effectively removes price volatility while giving the merchant the flexibility to accept digital assets. Of course, the downside is that it subjects the company to the often drawn-out procedures in TradFi.