No doubt, Bitcoin has proved to be one of the most popular investment options among digital currencies, but what about its real-world application. You will find plenty of resources on how to invest in bitcoin and its future value. Here we will focus on the business application of bitcoin for payments.
Statistical data shows that big players are benefitting from the adoption of bitcoin in their business. However, is it a good fit for small businesses? In this article, we will see both the advantages and disadvantages of Bitcoin. It will help you to decide whether it makes any sense to use it in small businesses.
Bitcoin for Small Businesses
Due to the popularity of bitcoin, merchants across the globals started accepting bitcoin payments. Now let us analyze the pros and cons of Bitcoin.
Pros of Bitcoin Payments
There are many potential benefits of bitcoin payments, such as lower transaction fees, faster transactions, global exposure, and easy processing. Now let’s understand each of the advantages one by one.
1) Lower Transaction Fees: First of all, bitcoin payments have lower transaction fees than other payment methods. Generally, most people use credit or debit cards for making payments. Merchants have to pay 2% to 4% for the credit card payment facility. However, Bitcoin payment processors charge only 1% or less per each transaction.
2) Faster Transactions: Bitcoin payments are usually faster than conventional payment options. It is because of the absence of third-party involvement for payment approval. However, it may take some time for a large amount.
3) Global Exposure: Another potential benefit of bitcoin is global exposure. Small businesses can also accept bitcoin payments from international customers that may be very costly or not possible in credit cards.
4) Easy Processing: With the digital wallet and QR code facility, the payment process is easy and convenient in Bitcoin. Although digital payments are available nowadays, bitcoin payments are easier for processing than the conventional payment system.
Cons of Bitcoin Payments
It’s not wise to look at the advantages only; you should also consider the downsides of bitcoin. There are some disadvantages of bitcoin, such as legality issues, volatility, security vulnerability, taxation issue, etc.
1) Legality Issue: One of the primary problems of bitcoin payments is the legality issue. Although some economies have legalized the usage and trading of bitcoin and cryptocurrencies, some countries still banned the use of virtual currencies.
2) Volatility: Secondly, the price fluctuation of Bitcoin is very high. As people use it primarily as an investment tool and its value is extremely volatile, so it’s not the right decision to use it for payment purposes. However, trading through awesomejelly.com in bitcoin is a profitable idea for everyone.
3) Security Vulnerability: Another big problem of bitcoin payment is security issues. As it is a new form of payment system and the platforms are not much secure, there is a fear of theft and cyberattacks. Thus, many small businesses are not accepting bitcoin payments.
4) Taxation Issue: Lastly, bitcoin is not a legal tender in the USA. The Internal Revenue System (IRS) declared that Bitcoin is properly and subject to capital gains tax. So, it might be a problem for small businesses to pay the taxes as its value is highly volatile.
If you are running a small business, you need to consider the above factors and decide whether it’s the right choice for your business or not.
Using bitcoin for small businesses can be a challenging task. However, it can save a lot of money for global and large corporations. Thus, weigh the pros and cons carefully before you decide to adopt Bitcoin for your small business. I hope the information in this article has helped you understand whether bitcoin payments are viable for small businesses. Lastly, don’t forget to share what you have decided for your firm.