Tesla’s temporary adoption of bitcoin (btc) as a payment method for its products was possibly one of the catalysts that pushed asset prices to record levels last year and highlighted the legitimacy of cryptocurrencies , especially in the field of payments. Furthermore, crypto enthusiasts praised the fact that Tesla even set up its own node to accept BTC and stated that it would not exchange its holdings for fiat, implying great confidence in the long-term prospects of cryptocurrencies.
but despite backing off and ceasing to accept bitcoin a few months later due to climate concerns, tesla was just a cog in the 2021 adoption machine. starbucks, whole foods, and amc entertainment were just a few of the other giants that they made their foray into crypto last year. however, what is evident is that the incumbents are favorites of the familiar names. for other companies that want to join the trend, it is a question of how to start.
Reading: Report accepting bitcoin payment
Cointelegraph Research’s latest report provides answers. The 35-page document reviews the growing trend in cryptocurrency acceptance and the practical ways any business can integrate cryptocurrencies into their operations. furthermore, the report also looks at the future of cryptocurrencies in payments, particularly in regards to regulation and much more.
why should companies accept cryptocurrencies?
See also: Bitcoin Mining & The Grid (Part 1): Generators | Braiins
Cryptocurrencies are believed to be in a hyper-adoption phase, and the 178% increase in the global cryptocurrency population is further proof of this. For businesses, adapting to this growing demographic would mean expanding their potential customer base. Getting paid in crypto is also much cheaper compared to business methods, which can improve a company’s bottom line. merchants could save up to 3.5% on fees, or more, if the payment method is crypto instead of credit or debit cards.
download the full report here, complete with charts and infographics
Chargebacks are also another downside of merchant payment methods, costing eCommerce merchants $125 billion in 2021. Chargebacks are a type of payment reversal where the merchant returns the sum of money to the customer due to a transaction dispute or if he returns the purchased product. however, chargebacks can also be outright fraud, as some customers may dispute a transaction to secure a refund despite not having a problem with the product or its delivery.
the crypto acceptance process
Whether a company sets up its own node like tesla or opts for a payment processor to facilitate the transaction, the way to do it is more or less the same but differs in substance. for example, certain payment processors may allow a merchant to receive crypto, but would also allow real-time settlement in fiat. this effectively eliminates price volatility while giving the merchant the flexibility to accept digital assets. Of course, the downside is that it subjects the company to the often lengthy procedures in tradfi.
See also: Bitcoin Mining Uses More Electricity Than All of Google
The other side to this is to accept the actual crypto-asset wholeheartedly, and there are various reasons for doing so. Long-term price appreciation is the most common argument, but companies can also hold on to crypto assets for rainy-day situations. Merchants can also earn additional revenue by utilizing the avenues available within the crypto space, such as locking cryptos in DeFi protocols to earn yield from staking or lending.
Ultimately, the deciding factor on the channel to receive crypto assets will depend on the merchant. the factor that needs to be taken into account is whether the goal is to maintain cryptocurrencies or take advantage of the growing cryptocurrency customer base, or perhaps even both.
Download the full report with more detailed information, complete with charts and infographics at the cointelegraph research terminal.
This article is for informational purposes only and does not represent investment advice or investment analysis or an invitation to buy or sell financial instruments. specifically, the document is not a substitute for individual investment or other advice.
See also: What Does Staking Mean in Crypto?
