Why Small Scale Businesses should accept Cryptocurrencies as a medium of payment

[Alpha Marine]

It is a common saying that “cryptocurrency is the future” but one can categorically say crypto is the present. Many big corporation now accept cryptocurrencies as a medium of exchange and that is how it begins.

We all know the history of fiat money, how it was first the merchant receipt of deposits in large commercial transactions.
Paper money was first introduced in the 7th century during the ‘Tang dynasty’ in China but it did not appear till the 11th century during the ‘Song dynasty’. It was not introduced in Europe till the 13th century by European explorers like Marco Polo. in the early 1800s, Napoleon issued Paper notes.

The essence of the history lesson is to illuminate the similarities between the introduction of paper money and the introduction of cryptocurrencies. If you also look at the introduction of credit/debit cards you'll see a whole lot of similarities. The point is, these mediums of exchange/payment don't just get accepted overnight. Just as it took paper money centuries to be accepted globally, so did it take credit/debit cards, electronic bank transfers, to be accepted globally. We can see cryptocurrencies following in these exact steps but better, more transparent and easier to understand. Governments, businesses, individuals around the world saw the benefit of accepting paper money and keyed into it. Centuries later, they saw the benefits of adopting credit/debit cards and they did.

Today governments, big corporations, individuals are seeing the importance and benefits of cryptocurrencies that is why they are adopting it. So why should the small scale businesses be left behind?

If you still need more reasons a small scale business should adopt bitcoin, these are a few;

1. Low transaction fees and Quicker transaction:
    It is relatively cheaper to carry  out transactions through cryptocurrencies than electronic bank transfer. It's also faster

2.  High Security and reduced transaction Fraud:
     Every transaction is stored in the decentralized blocks, once the transaction is made, it cannot be reversed or canceled.
     Since no central authority oversees the operation, customer confidentiality is maintained.

3.  New Customer acquisition:
     There are hundreds of millions of people all over the world who trade in bitcoin and other cryptocurrencies. In fact
     according to Zippia, there are about 36.5 million American crypto user and 300 million global users as at 2021. So if you
     accept crypto as payment for your business, you will have more people who prefer to transact in crypto and you have the
     opportunity to expand.

4.  Access to world market:
     Unlike the stock market that has an opening and closing hours (working hours), crypto markets don't have specified
     working hours. It operates 24/7. You can take advantage of this and work around the clock if you want to without any
      limitations.


https://en.wikipedia.org/wiki/Banknote#:~:text=The%20first%20known%20banknote%20was,coinage%20in%20large%20commercial%20transactions

https://yourstory.com/mystory/impact-bitcoin-cryptocurrency-small-scale-business

[D ltr]

As we know, small-scale businesses have limited capital funds, which is different from large-scale businesses, so if business owners want to use crypto, they must really enter the target market for crypto itself, they can't just use crypto, the reasons you give make sense, but we return to geographical conditions, the standing business environment cannot just use crypto in every business

[Luzin]

Today governments, big corporations, individuals are seeing the importance and benefits of cryptocurrencies that is why they are adopting it. So why should the small scale businesses be left behind?

If you look at the visionary Bitcoin, it looks like it will become a new currency. This can be seen from its development, more and more large companies trust and use as a payment medium. But behind that you also need to know that not all countries today recognize bitcoin or crypto as legal tender.

Like my country the principal payment option is my country's currency. If the payment is used via Crypto it is considered unlawful, and can get criminal penalties. So far it does offer a good solution, but we are hindered by regulations. Moreover not yet understanding crypto or bitcoin will make people more confident in fiat money recognized by the world.

[rat03gopoh]

3.  New Customer acquisition:
     There are hundreds of millions of people all over the world who trade in bitcoin and other cryptocurrencies. In fact
     according to Zippia, there are about 36.5 million American crypto user and 300 million global users as at 2021. So if you
     accept crypto as payment for your business, you will have more people who prefer to transact in crypto and you have the
     opportunity to expand.

Looking at global bitcoin regulation I believe it's spot trading user statistics. It can't be concluded at this time that the purchase of goods and services with bitcoins has already accounted for at least half of that figure.
Another issue, I'm afraid that as the bitcoin price increases it will shift the goal of just being an absolute investment asset even though regulations allow it.

[slaman29]

As we know, small-scale businesses have limited capital funds, which is different from large-scale businesses, so if business owners want to use crypto, they must really enter the target market for crypto itself, they can't just use crypto, the reasons you give make sense, but we return to geographical conditions, the standing business environment cannot just use crypto in every business

Small scale can't work for true crypto because, they have very small profit margins, in my understanding anyway.

If you make 50 cents from a sale (as opposed to big businesses which make $50 a sale let's say) then you're paying off miner fees, consolidation fees, not to mention exchange fees.

Unless you want to only keep revenue in crypto and use fiat for continued capital, but then you're not really a small scale business that needs profit in this case

[Alpha Marine]

Today governments, big corporations, individuals are seeing the importance and benefits of cryptocurrencies that is why they are adopting it. So why should the small scale businesses be left behind?

If you look at the visionary Bitcoin, it looks like it will become a new currency. This can be seen from its development, more and more large companies trust and use as a payment medium. But behind that you also need to know that not all countries today recognize bitcoin or crypto as legal tender.

Like my country the principal payment option is my country's currency. If the payment is used via Crypto it is considered unlawful, and can get criminal penalties. So far it does offer a good solution, but we are hindered by regulations. Moreover not yet understanding crypto or bitcoin will make people more confident in fiat money recognized by the world.

You are very right.
I failed to add that this was for businesses that are in countries where they are allowed to used bitcoin. Also it has to be business that are online because small scale businesses that are not online or do not offer services online will find it very hard to venture into crypto because most of their target audience do not use crypto.

[avikz]

My thinking is exactly opposite! A small business must not accept cryptocurrency as payment. Usually a small business rolls over the money. They always need working capital to sustain and that working capital has to be in fiat unless and until their wholeseller accepts crypto. Also the price volatility can easily eat up their profit within a very short period of time.

So my personal recommendation is not to use crypto for a small business. They can have a service where a thind party converts the crypto immediately based on the current market rate, that's when it makes sense for the small businesses to accept cryptocurrency.

[Flexystar]

It is good start but unfortunately bitcoin still has to prove itself with it's strong grounds. Why I am saying this? The very factor that everyone understands and knows about the bitcoin: Volatility. As far as small business owners are considered it would unrealistic for them to rely on the currency which is highly unstable and they may end up loosing their so called "small" profits over the time and could go bankrupt. Well we dont want that kind of first impression to the small business owners. As far giant business players they can hold up that much investment for very long terms and hence they are adopting it at faster rate as compared to the smaller one's. We might have solution in the future but for now "comparative" supply is huge and with increased difficulty it would be even slowly minted. Hope so soon, if may be government interfered but keeping it decentralized?

[Frankolala]

Small scale business will not be able to use only crypto because we are in a fiat world. I also believe that big companies that accept cryptocurrency deal majorly on fiat currency. A small scale can accept crypto and fiat at the same time,this will help the business grow since some fiatless customers will be able to pay in Bitcoin if they bought much items from the shop or store.

Accepting only cryptocurrency in a small scale business will not work because so many countries are yet to adopt it and some don't want it at all,since it does not give the government full control over its citizens financial status.Some persons don't have the knowledge of bitcoin especially the aged people,how will you make business transactions with them,they will not even come close to your store.

[Die_empty]

My thinking is exactly opposite! A small business must not accept cryptocurrency as payment. Usually a small business rolls over the money. They always need working capital to sustain and that working capital has to be in fiat unless and until their wholeseller accepts crypto. Also the price volatility can easily eat up their profit within a very short period of time.

So my personal recommendation is not to use crypto for a small business. They can have a service where a thind party converts the crypto immediately based on the current market rate, that's when it makes sense for the small businesses to accept cryptocurrency.

I agree with your argument to a large extent. I recently had a conversation with a business man that uses bitcoin to pay for some goods he imports from China. He chose bitcoin because of the scarcity of dollars and the high transaction fee. He was lamenting how the recent volatility of bitcoin have really affected his business negatively. It became glary that business owners would really benefit from it when the price of bitcoin becomes a little bit stable.   

The level of bitcoin awareness in an area would also determine how fast small businesses would adopt bitcoin. If more customers are requesting for bitcoin as alternative source of payment, then most businesses would be forced to adopt it to please their customers. Government policies, availability of vital infrastructures as well as literacy level of the populations are other factors that would also determine the success of small businesses using bitcoin for transactions.   

[Upgrade00]

If you make 50 cents from a sale (as opposed to big businesses which make $50 a sale let's say) then you're paying off miner fees, consolidation fees, not to mention exchange fees.

Using lightening network could help reduce the fees paid a lot and make it profitable for a business to operate.

Unless you want to only keep revenue in crypto and use fiat for continued capital, but then you're not really a small scale business that needs profit in this case

This poses a major problem for such small businesses. Quite a few of them do not have the cash flow that a company like microstrategy has to hold some of their revenue in bitcoins. They have the option of using a payment processor to convert the bitcoins to fiat immediately, which presents them with exchange fees for each transaction.

[Wiwo]

Small and medium enterprises could benefit heavily from Bitcoin adoption if the right features are put in place and one point you failed to mention is the fact that, Bitcoin fast transactions can only be achieved through the use of layer 2 network services such as lightning network. Because that is the only way small businesses can manage the cost of operation of accepting Bitcoin in their payment system since they have low capital to play around with, there is a need for adequate management of their resource by adopting the right tools to process their payment at a cheaper rate and less cost-effective.

[South Park]

My thinking is exactly opposite! A small business must not accept cryptocurrency as payment. Usually a small business rolls over the money. They always need working capital to sustain and that working capital has to be in fiat unless and until their wholeseller accepts crypto. Also the price volatility can easily eat up their profit within a very short period of time.

So my personal recommendation is not to use crypto for a small business. They can have a service where a thind party converts the crypto immediately based on the current market rate, that's when it makes sense for the small businesses to accept cryptocurrency.

I agree with your argument to a large extent. I recently had a conversation with a business man that uses bitcoin to pay for some goods he imports from China. He chose bitcoin because of the scarcity of dollars and the high transaction fee. He was lamenting how the recent volatility of bitcoin have really affected his business negatively. It became glary that business owners would really benefit from it when the price of bitcoin becomes a little bit stable.   

The level of bitcoin awareness in an area would also determine how fast small businesses would adopt bitcoin. If more customers are requesting for bitcoin as alternative source of payment, then most businesses would be forced to adopt it to please their customers. Government policies, availability of vital infrastructures as well as literacy level of the populations are other factors that would also determine the success of small businesses using bitcoin for transactions.   

This is one of the problems with bitcoin, its volatility is good news for traders and investors, as they can only profit when there are huge movements in the price, but it is bad for those which want to use bitcoin as a currency, obviously those businesses could sell their coins immediately for fiat or stable coins in order to decrease the volatility they are facing but if that is the case then the usage of bitcoin as a currency can be questioned, so until bitcoin becomes more stable many businesses are going to be afraid to use it and to keep it.

[Doan9269]

I cannot participate in advising small scale business coming up to start the acceptance of cryptocurrency because there are aloy of cryoto coins there that are not worth deserving to be called a digital currency or coin, they are just a pure version of scam in pretence, but when ot comes to talking to others about bitcoin then i can take the lead because i have got the several years of experience in dealing with bitcoin and yet i never found any bad luck with it when you invested, we must understand that crypto is wide and we must be intentional about which coin we are going for or recommending smal business start ups to engage, shitcoins could eventually bring down their whole dream about the business they do with massive discourament wjen they have scam experience with other cryptos.

[FanEagle]

I agree that having 300+ million customers is great, but do you really think that anyone in the world would reject dollars? I am pretty sure that dollars is even bigger, in billions, and yet we are not rich, which means that as a business you do not scale just because you accept dollars, and there are plenty of companies who do accept bitcoin and doesn't scale that big neither.

All of these mean that we are not going to really see someone do something that big at all just because they started to accept bitcoin. What could possibly happen though is that if you go into crypto related business, like an exchange or anything related to crypto, then it could make a good money.

[Accardo]

Learnt new stuffs from your crooked structured thread, also, I paid an attention to the history you wrote and its clear that nothing happens overnight. Soon small businesses around the globe will adopt the cryptocurrency payment method they're not yet sure or convinced. Think about it and put your leg on the merchant's shoe, considering the plethora of FUD news with proofs about cryptocurrency, would you risk a business for that? these guys need to understand cryptocurrency before venturing into it, but from their research, its difficult to change their minds towards accepting cryptocurrency. Thanks to clients that ask merchants if they accept cryptocurrency, but the answer sometimes is NO with references to familiar news on the internet that made them not to choose cryptocurrency. Only a strong hand that is familiar with cryptocurrency will accept cryptocurrency as a payment method or I presume that in future people will get hired to manage cryptocurrency payments medium for small scale businesses. It'll help with the fear of losing profits.

[Darker45]

To be honest, as far as small businesses are concerned, cash is the king. No fees whatsoever. No waiting time as well. Transactions are confirmed as soon as you get the money and you give the product. Perhaps the only downside is that there could be counterfeit bills and coins that you might receive. Most often, though, you couldn't detect it easily and you will also be spending them. But if your small business accepts online transactions, then Bitcoin's Lightning Network is a good addition.

[noorman0]

-snip-
1. Low transaction fees and Quicker transaction:
    It is relatively cheaper to carry  out transactions through cryptocurrencies than electronic bank transfer. It's also faster

Inconstant tx fees are the reason bitcoin doesn't get much attention.
Since marketplace sites and home businesses became popular among the younger generation in my country, instant payment wallet platforms (fiat) became the priority choice for their purchases even over cash. Applications in collaboration with local banks have been developed a lot and it is completely free of charge for depositing funds with transaction fees much cheaper than payments via the bank itself(average $0.1/tx) and relatively fast.

[Mr.right85]

As much as cryptocurrency could be a boost, there is a downside to it qhen it comes to small scale business.

Now, one of the advantages of business, enterprises and there brackets accepting cryptocurrency is the fact that, you can hold and have its value rise above your selling price for a commodity but, for small scale businesses, what you sell is often reinvested as it is deep into your capital. Hence, in the event of a bear market, your small holdings which is also your capital from accumulated purchases could reduce in value and you'll be in a lose as commodity might maintain its standard price.

A side to this might be a usdt conversion to provide a hedge against devaluation but then, the crypto acceptance becomes you just providing another means for your customers and that's not bad though.

[BALIK]

My thinking is exactly opposite! A small business must not accept cryptocurrency as payment. Usually a small business rolls over the money. They always need working capital to sustain and that working capital has to be in fiat unless and until their wholeseller accepts crypto. Also the price volatility can easily eat up their profit within a very short period of time.

So my personal recommendation is not to use crypto for a small business. They can have a service where a thind party converts the crypto immediately based on the current market rate, that's when it makes sense for the small businesses to accept cryptocurrency.

I agree, small business profits are much lower than big business, and cryptocurrencies are one of the most volatile assets, so it is easy to cause unnecessary losses if they use electronic money. But that's not the main reason, as Luzin mentioned: the legitimacy of cryptocurrencies that's the biggest hurdle businesses are facing. If governments legalize it and promote the use of cryptocurrency in the country, even if it is less profitable, businesses will consider using it to compete and attract customers.