Why Small Businesses Should Consider Accepting Cryptocurrency Payments


Cryptocurrencies used to only be mentioned by futurist technology groups. Now, they’re part of the mainstream and you can hear about them every day in the media. Their rapid rise has been shocking. Worth only a few pennies a decade ago, a single bitcoin is today worth tens of thousands of dollars. There is popular interest in the cryptocurrency movement. The question for the small business person is if they should accept cryptocurrency payments. There are a number of challenges you will face before you can proceed. Each choice has its advantages and disadvantages.

What is cryptocurrency?

Cryptocurrencies are tokens that can be used to pay another party for a good or service. It utilizes peer-to-peer (or p2p) technology. Because it’s decentralized, there’s no government entity or central bank that controls it or backs it. This is in contrast to what is known as fiat currency (such as the US Dollar or Euro).

There are several good reasons to want to start accepting payments for your small business in the form of cryptocurrency.

A big one is lower transaction fees. The most commonly used technology today is credit cards, and they have high fees. They take around 25 cents for each swipe and 2 to 4 cents of the transaction total. At the end of the quarter, credit card fees will eat a large part of your profit. This is why many stores have a high purchase minimum. Depending on the processor and your payments, accepting cryptocurrency might mean lower fees.

Cryptocurrency also protects merchants better. With credit cards, you constantly have to worry about fraudulent chargebacks. On the other hand, cryptocurrency transactions are similar to cash. They’re considered final and there’s no party that can reverse the charges.

Some retailers might experience increased sales. Some people in the cryptocurrency movement like to patronize small businesses that accept cryptocurrency. It can generate a wave of publicity.

Lastly, some small businessmen might want to help the cryptocurrency movement any way they can. It might not be troublesome to implement.


One major risk with accepting digital currency is volatility. Every day, cryptocurrency prices change based on supply and demand. To get around this, you’ll need to convert the cryptocurrency into fiat regularly. Some might like to accumulate cryptocurrency savings but this would be similar to investing which can end with losing money in the short term.

Crypto wallet security is also important. It’s not 100% safe. Some wallet services like OKEx and Coinbase only keep a small percentage of the crypto online and insure the rest. Enable multifactor authentication, back up your data regularly and secure and maintain your private keys.

Lastly, there is much uncertainty regarding cryptocurrency regulations. Lawmakers and government officials are still researching and crafting the regulations. And those laws will evolve more. While they want to promote innovation, they also want to protect consumers. Once again, your best bet is to convert your position regularly into dollars. A large holding of cryptocurrency might expose you to new regulations.

Cryptocurrency is an exciting new technology. Many small businesses are thinking about accepting payments. There are pitfalls and opportunities.