New and growth startups have a lot of decisions to make when designing payment platforms. Not only must price points and necessary margins be determined, but increasingly, actual payment methods are a major focal point.
Some would argue that cash payments are slowly, but surely becoming obsolete. More recently we’re even seeing various forms of electronic payment eclipse the use of credit cards. Along with the intensifying movement toward electronic payment methods—think PayPal, Apple Pay, etc.—the use of digital currency is also becoming a major factor for a lot of businesses.
Bitcoin leads the way in this discussion, and while it hasn’t yet become the hugely influential new currency that some of its early supporters predicted just yet, it isn’t going away either. And this is why anyone managing an early-stage or high-growth startup ought to ask the question: Should we accept Bitcoin payments?
Becoming a Bitcoin Early Adopter
One of the main reasons to consider doing so is that being an early adopter of Bitcoin payments can allow you to enjoy a bump in business. This isn’t too difficult to understand. People who do have Bitcoin, or who support the concept of the ongoing development of cryptocurrencies, are always looking for opportunities to actually conduct real financial transactions with their digital currency.
Imagine a scenario in which such a person is choosing between doing business with your startup or with a competitor, but you’re the only one of the two options at which he can pay with Bitcoin. Depending on your industry and the size of your startup, this may or may not be a common situation, but it’s certainly one that can and will arise more frequently over time.
You may also consider that Bitcoin payment capability is more versatile than many would expect. In recent years, we’ve seen an increasing number of brick and mortar businesses accepting Bitcoin payments through various POS devices, which means that retailers are no longer viewing cryptocurrency exclusively as a method for online payment.
Just as services like Apple Pay cater to on-the-go payments, it can be fairly simple to set up any storefronts that may be connected to your start-up with the capability to accept Bitcoin from in-person customers. In this regard, there’s almost a “why not?” component to this discussion; the more ways you allow customers to pay, the more likely it is that any given one will spend money.
Finally, there’s the fact that Bitcoin payments empower merchants with regard to both security and revenue. Customers paying with Bitcoin are not disclosing personal information or payment methods in the same way that those using credit cards are, which eliminates an entire area of fraud and theft concerns from the transactions.
Meanwhile, payments made with Bitcoin are also considered to be final, as Bitcoin does not carry any sort of recharge or sell-back capability in the way that a credit card does. This means that a merchant accepting Bitcoin can adopt an “all sales are final” policy, not only avoiding seeping revenue from returns but also the fees associated with chargeback transactions involving credit card payments.
Considering all of this, integrating Bitcoin payments with your startup is an idea worth thinking about. It’s too soon to move entirely toward cryptocurrency payments, but accepting them as part of your payment platform can diversify your business structure in a very effective way.
This article has been edited and condensed.
Paul Bryant is a freelance writer based out of Los Angeles. He frequently covers topics related to technology, finance, and startups. When he’s not working on his latest piece, Paul enjoys riding his bike and writing short stories. Connect with @pibryant on Twitter.
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