In the rapidly evolving digital landscape, the emergence of cryptocurrency has brought forth exciting opportunities for businesses. In this blog, we will delve into the intricacies of cryptocurrency and shed light on why integrating it into your business operations can be beneficial.
Cryptocurrency is a digital or virtual currency secured by cryptography, which makes it difficult to counterfeit or double-spend. It is completely different from traditional currencies (also known as fiat currencies), which are issued and regulated by governments. Cryptocurrency operates on decentralised platforms, free from governmental influence.
Bitcoin, the original avatar of cryptocurrency launched in 2009, pioneered the concept of a decentralised currency. It was developed and released as open-source software. Today, we have thousands of different cryptocurrencies (often referred to as ‘altcoins’), including big names like Ethereum, Ripple and Litecoin, each with its own unique proposition.
Cryptocurrency is powered by a technology known as the blockchain. A blockchain is a distributed ledger that records all transactions across a network of computers. These transactions, once recorded, are immutable without the alteration of all subsequent blocks or the consensus of the network.
The decentralised nature of the blockchain means it’s resistant to a lot of the threats traditional banking systems may encounter. Because cryptocurrencies are not tied to any central authority, they remain less affected by governmental interference, making them an alternative means of transacting in an increasingly globalised world.
With this foundational knowledge, let’s delve into the advantages of integrating crypto payments into businesses.
There’s a community of crypto enthusiasts worldwide. By offering a crypto payment option, businesses can tap into this untapped market segment. Moreover, cryptocurrencies eliminate the requirement for a traditional bank account, which expands the business’s potential reach to regions where banking services are limited or completely absent. This aspect is particularly beneficial for online businesses eyeing global expansion.
Traditional banking systems and online money transfers often involve fees and exchange costs that can impact your profit margins. Cryptocurrencies bypass these fees as transactions can be completed without a bank or an intermediary. While there are transaction fees associated with buying and selling cryptocurrency, these are generally lower than those charged by conventional banking systems, offering a more cost-effective option in the long run.
One defining characteristic of cryptocurrency is its ‘push’ transaction method. Unlike traditional ‘pull’ payment methods, where the business withdraws funds from the customer’s account, a crypto transaction requires the customer to initiate (or ‘push’) the payment to the business. This approach significantly reduces the risk of fraud and eliminates chargebacks because once a transaction is completed, it cannot be reversed. This feature can have significant advantages for businesses operating in sectors with high chargeback rates.
Traditional banking systems can sometimes be lethargic, taking days to process payments, particularly for high-value transactions or those that cross national borders. Cryptocurrency operates round-the-clock, eliminating the concept of business hours, which means transactions can be completed within minutes. For businesses with high transaction volumes or those that operate globally, the speed of cryptocurrency transactions can enhance operational efficiency.
Cryptocurrencies offer a heightened level of security. Each transaction made via cryptocurrency is encrypted, and the blockchain ensures it can’t be altered, providing a robust shield against identity theft and reducing the likelihood of data breaches. Moreover, transactions can be completed with fewer personal details than traditional online payments, enhancing privacy for customers.
Embracing crypto payments can set a business apart from its competitors, positioning it as an innovator and a future-oriented enterprise. It shows your customers, stakeholders and the market that your business is proactive and forward-thinking. Additionally, as cryptocurrency continues to gain mainstream acceptance, integrating it into your business operations could offer future-proofing benefits, ensuring your business stays relevant.
Cryptocurrencies can be used to create reward tokens for loyalty programmes. These tokens can be traded for products or services, driving customer engagement and retention. Since the process is digital and automated, it’s more cost-effective and efficient than traditional loyalty programmes.
By accepting crypto payments, businesses appeal to a new demographic of tech-savvy consumers. This demographic tends to appreciate businesses that embrace new technologies, which can help improve brand reputation. If you’re looking to expand your market, attract a broader customer base and keep up with the digital transformation, you may want to consider cryptocurrency payment integration.
At Venue Smart, we’ve integrated cryptocurrency payments into our systems, facilitating the processing of selected digital currencies alongside traditional AUD transactions. Our cryptocurrency payment gateway records all electronic transactions in the same way, irrespective of the currency used. Get in touch with us for more information.