BitCoin has a lot of potential but there are a few things to watch out for if you are thinking about accepting this method of payment.
As I was reading a Wall Street Journal article a few days ago on big investors getting involved with BitCoin, the thought hit me to share a real world experience with BitCoin in a business environment.
As a business one thing that is always being monitored, or at least should be, is the cost of doing business. Part of this cost are the fees that are associated with processing customer transactions. This is one area that BitCoin excels in.
With BitCoin being purely a digital currency, the fees, if any, are very minimal which can have a positive impact on reducing transactions fees. From a business perspective this could be the leading reason to think about accepting BitCoin as a payment method.
It is hopeful that as BitCoin gains a wider acceptance and user base, that it causes pressure to be put on PayPal to reduce it’s PayPay to PayPal (since these transactions are purely digital also) transaction fees. This would be a nice side effect for businesses.
What to Consider Before Accepting Bitcoin
Ok, that was the positive side of BitCoin. Now, as a business owner, here are some things for you to consider related to BitCoin.
The long term success of BitCoin is still in question. Holding on to BitCoins can be a risky move. I am not a financial advisor, so take the following comment as my own opinion: Unless you are in the business of holding risky investments hoping the market goes up, then you should not hold BitCoins. Instead, if you do decide to accept BitCoins, have the transactions immediately converted to your local currency via BitPay.com. In simple terms, think of BitPay as a clearing house for BitCoin.
At Hostek.com we started accepting BitCoin sometime in mid 2014 after a few customers inquired about paying via BitCoin. After researching and knowing we did not want to hold the volatile currency, we opted to use BitPay as our BitCoin payment gateway.
As far as BitPay goes, our experience has been great. Just as their site states, if you charge $1, the business gets $1; and the funds are in our bank the next day. If your business accepts cards or PayPal, you know that is a big difference from what you would get via either of those methods..
Your first thought is probably, wow, this is perfect. Well, it can be, but you must proceed cautiously. We found that there was a lot of fraud activity with BitCoin payments.
We still accept BitCoin as a payment type, but only for customers that have been with us for a while and have demonstrated the ability to pay with more traditional methods. For us, this has eliminated the fraud activity related to BitCoin while still providing our customers with the ability to pay using their digital currency.
Categories: Business Tips