6 Financial Advantages Bitcoin Can Bring to Small Businesses
Small business owners are unfamiliar with blockchain and haven’t accepted cryptocurrencies as a standard method of payment. However, with the digital world increasing crypto transactions, businesses should pay more attention to the evolving financial landscape. Furthermore, you can reap numerous benefits of using bitcoin for business transactions. Some of the advantages include:
- Reduced Transaction Fees
Every time someone swipes a card, there is a transaction charge involved, and some credit card issuers have a 4% transaction cost. For a small business with cash flow issues, such transactions can affect their financial health. Cross-border businesses also attract significant transaction fees from the cost of changing currencies and bank charges for wire transfers. All these problems will vanish if you embrace digital currencies as payment methods. Crypto transactions minimize the transaction costs by 1%. You can buy bitcoin and use it to acquire your stock from international suppliers, and it allows customers to pay using crypto. You don’t require banks to verify each transaction when you buy cryptocurrencies, and you won’t lose money to credit card companies and financial institutions.
- Minimizes Effects of Inflation
When the government prints more money, it lowers the purchasing power of your customers, which can lead to losses. You may also acquire your stock at a higher price and sell at a lower price with inflation. Such market fluctuations can affect your cash flow and lead to financial problems. You can evade the effects of inflation by adopting crypto payments for buying or selling. The bitcoin system is finite, which makes it impossible to issues surplus currency.
- Instant and Secure Transactions
Waiting for your money after a transaction can create unnecessary anxiety. It doesn’t help that international money transfers are becoming more complicated, and the processing time can take several business days. When you want to enjoy fast transactions, use digital currencies for money transfers. The blockchain processes transactions within minutes. There is no central entity to confirm and manage the transactions, making the payment process fast and secure. The transaction speeds give small businesses an edge over established market players that rely on slow transfer solutions with high transaction charges passed on to customers.
- Minimal Third-Party Involvement
When you buy cryptocurrencies for transactions, you will eliminate intermediary institutions like law firms, banks, and money transfer systems. Removing third parties reduces service costs and promotes efficiency. Blockchain also facilitates smart contracts, which allow you to execute complex deals without third-party involvement.
- Reduces Losses from Chargebacks
Credit card chargeback is a significant problem facing small businesses. For instance, a customer can use a credit card when buying gift cards and later cancels the transaction. The credit card company will charge the business for the transaction, leading to significant losses. Chargebacks only apply to fiat currency since crypto transactions are irreversible. When customers buy gift cards with cryptocurrencies, the transaction is permanent and will reduce business losses.
- New Investment Opportunities
Apart from using crypto as a payment method, you can use it to provide unique investment opportunities for your business. For instance, when you buy bitcoin with credit card, you can boost the financial holdings of your SME. As the value of the digital currency rises, your investment will yield more profits. While most countries don’t recognize crypto as an investment instrument, the digital currency landscape changes daily. Therefore, it makes sense for companies that use crypto to invest in better rewards.
While digital currencies are yet to penetrate the mainstream market fully, they provide numerous benefits and growth opportunities to small businesses. You can reap the benefits of crypto by embracing it as a mode of payment in your organization.