Everyone is talking about Bitcoin—it certainly has generated lots of recent buzz, but is it right for you—the small business owner? But first, exactly what is Bitcoin? According to Wikipedia, Bitcoin is a peer-to-peer payment system and digital currency that provides for instant payments to the vendor; it is an alternative way to accept payments, much like credit cards and cash. It is not backed by any central bank or government, unlike known payment processors like PayPal and digital wallets like Google Wallet. What follows is a list of the advantages of using this latest technology in running your small business.
- Save money on credit card processing fees—this can be a huge savings and immediately increase your profit margins
- Transaction costs are less than one-half of 1%
- Zero barrier to entry; bitcoin integration is easy
- Using the latest technology will brand your business as tech savvy
- Stand out against your competition-be the first one to use bitcoin in your area
- Attract customers who may not have credit cards
- Provides another way for a customer to pay for goods and services
- Bitcoin transactions are final, unlike credit card transactions which can be disputed; avoids dealing with customers who later call credit card companies to stop purchases on payments—prevents charge-backs
- Transactions are more quickly completed over the internet
- Avoids foreign currency issues—a bitcoin is the same in the US as it is in Europe
- Opens your products to a worldwide audience
- Simplifies online international sales
See “More Businesses Embrace Bitcoin”—WSJ.com. While the use of bitcoins as an everyday currency remains a bit of a mystery, Sara Angeles in her recent article entitled, “Accepting Bitcoin: What Small Business Need to Know,” notes that “once debunked, bitcoin may actually help small business grow.” “2014 is promising to be a blockbuster year for the bitcoin ecosystem, and small vendors shouldn’t be afraid of jumping in,” said Matthew Branton, founder of Coinlock, an e-commerce platform that lets users sell digital content using Bitcoin technology. But “buyer beware”—using bitcoin as a virtual currency is not for everyone. At this point in its life cycle, the small business owner should think of using bitcoin as big tech experiment.