Small and medium-sized enterprises are sometimes on the bleeding edge of technological change. In many cases, SMEs look to larger companies to test out new technologies before they adopt them. In others, it is the SMEs that are nimble and adaptable enough to make the changes needed for new technologies. Accepting Bitcoin can be one of those cases. Here’s why SMEs should be looking at cryptocurrency as a potential method of payment.
How Accepting Cryptocurrency Can Benefit a Business
Regardless of how one personally feels about cryptocurrency, the fact is that there are people who own cryptocurrency. And the number of people holding cryptocurrency is growing. Here’s how accepting it can benefit a business.
Accepting Bitcoin Can Provide a Unique Selling Proposition
Bitcoin adoption in terms of acceptance as payment is currently pretty low. By establishing themselves as a business that accepts Bitcoin now, they can make a name for themselves. As Bitcoin grows as an alternative to fiat currency, so too will awareness of that company grow in the minds of the public.
If you like this article, check out one of our previous in-house articles, “A Tokenized Future” by Census Open Finance.
Concerns about Inflation are at Levels Not Seen Since 2013
Inflation is becoming a widespread concern due to the large increases in the supply in fiat currency around the world. The U.S. has a 10-year Treasury Inflation-Protected Security (TIPS) whose yield is now -0.82%. This is the lowest the yield has been since 2013 and signals that significant inflation worries exist.
When inflation becomes a concern, many people have historically sought out gold. However, how many young people have you seen surfing eBay or gold websites late at night shopping for gold bullion? That’s not their style. The accessibility of Bitcoin allows anyone to purchase it and it is a modern-day hedge against inflation. This means that as inflation worries escalate, so too will interest in and user adoption of Bitcoin.
Conditions are Favoring the Adoption of Cryptocurrency Around the World
We live in some challenging times. Many difficult decisions remain to be made. Social upheavals are happening around the globe, particularly in the U.S. Concerns about the novel coronavirus and increasing economic and social instability could have a dramatic effect on economies around the world.
COVID-19 Concerns Make Contactless Payment Options More Attractive
The risks of contact related to COVID-19 have made any payment option that does not require contact more desirable. It’s true that this also holds for payment card processors like VISA and MasterCard as well. There are two reasons why cryptocurrency would be a better choice.
Firstly, the payment card processors charge high fees for their services. Accepting Bitcoin means much lower fees. Even using a Bitcoin payment processor is cheaper than VISA or Mastercard.
Secondly, some consumers simply prefer cash. Bitcoin can be used in a form that is similar to way we use cash. The Census Note is a cold hardware cryptocurrency wallet that is the same size as a payment card. A user can easily access the functions of the wallet using any smartphone. This means that someone can carry their currency around like cash and be able to pay or receive funds without any physical contact whatsoever.
COVID-19 is Causing Central Banks to Print Massive Amounts of Currency
Inflation in Venezuela has led to the massive adoption of cryptocurrency in that country as more and more businesses began adopting it. In economies where the supply of currency is out of control, cryptocurrency provides a safe haven of sorts against the rapid decrease in value that results. It does this because of its strict supply limits that cannot be manipulated like central bankers continually do with national fiat currencies. Accepting Bitcoin allows companies to cater to those customers who are using Bitcoin to safeguard their assets and by accepting Bitcoin, a business can also enjoy that same protection against inflation.
One of the knocks against Bitcoin has been that it’s too volatile. But volatility is relative. The United States, as an example, increased the money supply dramatically as a result of the COVID-19 pandemic. The increased unemployment benefits extended to the millions who have been out of work will soon end. The country will is currently faced with the dilemma of extending the benefits again or potentially facing a recession.
With inflation worries already so high, it is a choice between a recession that may engulf the entire world in the midst of a pandemic, or a massive devaluation of fiat currency in order to keep the money flowing and businesses afloat. This is not an easy decision. And it is a decision similar to those being faced around the globe. But the amount of fiat currency about to be printed may very well be enough to dwarf any volatility concerns that Bitcoin has.
Bitcoin can offer a unique selling point to users of Bitcoin, which will only continue to gain steam as the adoption of Bitcoin increases. The adoption of Bitcoin also eliminates the middleman for those transactions, thus saving fees on transactions. It also gives a business the same protection against escalating inflation that threatens fiat currencies—and individual wealth—around the world.