Even though many people view cryptocurrencies as a speculative investment, it’s still worth adding it as a payment option if you run an e-commerce store.
Several reputable stores already include cryptocurrency payment options, and the number is growing each week. In this article, we’ll analyze the pros and cons of including it as a check out option and provide you with the resources to add it to your store.
The Pros
Reduced Fraud. Chargeback fraud is a common occurrence on e-commerce platforms. Here’s how it works:
- A customer orders your product using a debit or credit card.
- You deliver the product to the customer.
- Once the customer receives the product, he/she initiates a chargeback. They claim that the package never arrived, their card was stolen, or some similar excuse.
- You’re stuck wasting resources to fight the claim. You have to prove that the product arrived successfully while the card company locks the funds in the meantime. This is especially troublesome for e-commerce businesses with an already limited cash flow.
Cryptocurrency payments are irreversible. Once a customer pays you, there’s no way they can reverse the transaction. You would have to initiate a payment back to the customer. Because of this, chargeback fraud is virtually impossible when using cryptocurrency payments.
Lower Transaction Fees. Most payment processors charge around 3.0% per transaction. On top of that, some also have markup and monthly fees. Although 3.0% may not seem like much, it adds up over time.
Cryptocurrency transaction fees are significantly less. Current Bitcoin fees are ~$1.00 per transaction and are estimated to decrease with further SegWit adoption and Lightning Network implementation. Additionally, you have significant control over the fees that you pay. The higher your transaction fee, the quicker you’ll receive your payment. If you’re in no rush, just set a lower fee payment.
Other cryptocurrency projects, like Nano, are working on an instantaneous payment solution with absolutely no transaction fees. Some e-commerce stores have even begun to successfully implement Nano on their platform.
Greater Customer Reach. Beyond the transactional advantages of accepting cryptocurrency, you also reach more customers by doing so. In a world where governments and large corporations seem to be tracking your every move, customers are becoming more privacy-focused. More and more people are beginning to use cryptocurrencies, like Bitcoin, for online purchases in order to keep some form of anonymity. Having cryptocurrency payments as an option at checkout helps to target this customer base.
The Cons
Price Volatility. As you probably know, the price of Bitcoin and most other digital assets can vary widely on a day to day basis. As an e-commerce store owner, you want to ensure that the $50 you receive for your product is still worth $50 a week later.
The simple solution to this problem is to cash out your cryptocurrency to fiat immediately when you receive it. Several cryptocurrency payment processors support this as an option. As cryptocurrency sees more real-world adoption, the prices will begin to level out as well.
Additional Set-up. As with adding any new feature to your e-commerce platform, there’s additional work involved. You need to configure the back-end to actually accept the cryptocurrency payments as well as design a new user interface so your customers can make the payments.
Well, there’s good news. The top cryptocurrency payment processors have out-of-the-box solutions that provide everything you need to easily integrate crypto onto your platform. They include everything from the wallet capabilities to “Pay with Bitcoin” buttons to add to your checkout screen.
Customer Confusion. Customers may be confused by the additional option(s) at checkout. Even though Bitcoin is becoming more popular, we’re still in the early days of adoption. Be prepared to field questions from curious customers on how it works.
This article was originally published at CoinCentral.com