Many businesses plan to add a new payment option for customers — cryptocurrency. Pew Research Center reported that 86% of Americans have heard at least a little about cryptocurrencies. Of those, 24% have heard a lot about it. Only 13% have not heard about cryptocurrency. These numbers are in stark contrast to a 2015 Pew Research Center survey on Bitcoin. At that time, only 48% of American adults had heard about the currency. Only 1% had collected or traded it.
As American consumers have become more familiar with cryptocurrency, many of them now want to use it to pay for products and services 32% of small businesses have already risen to the challenge and now accept cryptocurrency as a form of payment.
Consumers’ comfort level with cryptocurrency varies by age, gender and race. If a business’s target audience is more likely to request or expect an option for cryptocurrency, the business should prioritize it.
While the Pew survey mentioned above found that 16% of all adults in the U.S. have traded or used cryptocurrency, 43% of men aged 18 to 29 have used cryptocurrency, compared to 19% of women in the same age group.
Pew also found that Asian, Black and Hispanic adults are more likely than Caucasian adults to have invested, traded or used cryptocurrency. When deciding if offering cryptocurrency is the right move, businesses should consider whether their target customers fall into the demographics most likely to want the payment option.
Businesses add cryptocurrency because the payment method offers several key benefits that can improve operations and increase revenue. Offering cryptocurrency payments can help businesses:
As with most new payment options, businesses may have concerns about accepting cryptocurrency. Common concerns include:
One of the biggest questions asked by businesses considering accepting cryptocurrency is: How does it work operationally? Many businesses find it’s much easier than they expected.
The biggest difference between cryptocurrency and traditional currency is that digital currency operates on individual blockchains instead of through an owner of the currency or platform. Each blockchain is a decentralized digital ledger that logs each transaction for the specific coins. Because a single person cannot change the blockchain, cryptocurrency has a level of visibility and transparency that is simply not possible with traditional currency.
Businesses can accept payments using one of two options: a cryptocurrency wallet or a cryptocurrency exchange. With a wallet, the business stores and retrieves the cryptocurrency either using software or a physical USB device. However, businesses must set up the wallet to accept each specific type of cryptocurrency. With cryptocurrency exchanges, businesses can trade all types of cryptocurrency from the platform.
With cryptocurrency likely to become even more popular in the future, businesses who are on the fence should closely monitor their customers’ expectations. Remember, the process is apt to become easier as early adopters work out the kinks. Do most of your competitors or other businesses your target audience shops at take cryptocurrency? If so, your business may want to consider following suit to stay competitive.