Bitcoin has been the hot topic in the FinTech world over the last few years, but 2017 saw the world’s leading cryptocurrency enter the mainstream.
With agencies such as Japan’s Financial Services Agency giving licenses to 11 bitcoin exchanges back in October, businesses and consumers have started to see the value tech geeks have been talking about for years. In fact, with the price reaching record levels in November, the US financial world has also embraced the online currency.
As regulators gave the green light for bitcoin to become a futures commodity, traders have been preparing for a new era. Indeed, with CME Group and CBOE Global Markets now offering bitcoin futures markets, it looks as though the decentralised payment system is slowly becoming an important financial asset.
— Inspeer (@Inspeer_io) December 4, 2017
Of course, it’s little wonder that technology is shaking up the financial sector. As we pointed out in November, the rate of investment in FinTech is growing by 45 percent annually with £10.3 billion finding its way to start-ups in 2017 alone. Put simply, if you’re not on the financial tech train, you’re missing out, which leads us to the question: is bitcoin important for your business?
We know that major brands such as Microsoft and Virgin Galactic have accepted bitcoin payments for at least three years, but it’s fair to say that it’s still not a common payment method. Indeed, for all the hype surrounding bitcoin, consumers are yet to really see an increase in the number of merchants accepting it.
Bitcoin as a Business Commodity
The obvious benefit of bitcoin is that it’s a decentralised currency that isn’t restricted by government borders. Once you’ve set-up a bitcoin wallet, you’re basically capable of accepting payments from anyone in the world. Indeed, by freeing yourself from the shackles of currency conversion charges and taxes, you’re opening up your business to an international market. However, it’s important to remember that pricing is crucial. According to advice on bitcoins.net, the volatility of bitcoin’s value means you need to set prices carefully.
With values changing on a daily basis, you should consider one of two pricing strategies: “price goods or services at the market rate at the time of sale or apply a weighted average rate to reflect the recent volatility”. As well as considering the price you’ll accept for goods and services, you need to consider how you’re going to accept bitcoins. Online businesses can use a “pay now with bitcoin” plug-in to accept payments through an integrated service provider such as Shopify or Drupal.
Make Bitcoin Payments Simple for a Better Business
However, physical vendors have two main options. For ease, a QR code can be attached to your payment terminal. After setting up a bitcoin wallet, you can find your QR code, print it out and attach it to your till. At this point, customers can scan the code and the funds will be sent to your wallet. Alternatively, near field communication (NFC) wallets allow people to effortlessly tap their phone or a card to make a payment. Although the number of consumers with bitcoin payment cards will be small (most will have phones with bitcoin wallets installed), this method is more in line with common payment options and may, therefore, feel more comfortable.
Indeed, this may be the biggest challenge for businesses. Although tech and financial experts might be hot on bitcoin, the average consumer may still be wary of it. This, in many respects, is where business could be most effective. By making it a standard payment option, consumers will gradually start to accept it. If bitcoin is good for business, then it’s businesses that need to help promote it and, in turn, reap the benefits of using the latest currency system.