Businesses That Accept Bitcoin Attract New Customers and Sales

[alastantiger]

I have read on this forum how some users are starting to accept bitcoin as a payment option for their businesses. This makes me happy. I want to believe that there are three kinds of merchants when it comes to accepting bitcoin or cryptocurrency as payment option. They are 1) The decided. 2) The undecided. 3) The Never will.

If you belong to the second or third category, I'll make an effort to convince you otherwise using the findings of this study. Forrester Consulting, a reputable research and consultancy organization, did a study in 2020 to assess the economic effects of businesses accepting bitcoin and other cryptocurrencies using BitPay.

Before I continue, I want you to understand that it is entirely up to you whether you use a payment gateway or manually set up your wallet; it depends entirely on what you want. So, I firmly believe that the result can be generalized. You can check this threadUsing a Crypto Payment Gateway vs Setting Up a Wallet Manually for Business I created some days ago to read the opinions of people.  What matters are the benefits your business stands to gain.

So, what do you stand to benefit as a businessperson when you start to accept bitcoin as a payment option

• 1. New customers base:
  According to the research, 40% of customers that pay with crypto were new to the merchant.
• 2. Increase in the size of transactions because buyers who pay with cryptocurrency tend to spend more than other customers.
• 3. Lower transaction costs: Transaction fees are lower than those for other payment types
• 4. Elimination of traditional credit card fraud and identity theft risks associated with credit cards.

Basically, higher revenue and ROI, a new clientele, and improved fraud security. Aren't they what businesses need?
I hope that I have been successful in persuading the unsure and the Never will that accepting bitcoin as a payment option will benefit their businesses more.

Lemme hear your thoughts


https://www.businesswire.com/news/home/20200929005406/en/Study-Shows-Merchants-That-Accept-Bitcoin-Attract-New-Customers-and-Sales
https://bitpay.com/resources/forrester-report-says-bitpay-adds-new-sales-and-2x-aov/
https://www.investopedia.com/tech/bitcoin-payment-services-introduction/#:~:text=Cryptocurrency%20gateways%20enable%20you%20to,to%20offer%20more%20payment%20options.

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[Z-tight]

2. Increase in the size of transactions because buyers who pay with cryptocurrency tend to spend more than other customers.

I don't know how this conclusion was reached, but i don't think it is correct. People mostly take BTC as an investment rather than a currency, so they would prefer to hold it for a long time than spend it, but whenever they decide to spend it, they don't do that on too many items or on expensive stuffs, maybe just a cup of coffee, because the BTC spent seems like money that can generate more money to them, so why would they want to spend too much of it on goods.

[Aanuoluwatofunmi]

2. Increase in the size of transactions because buyers who pay with cryptocurrency tend to spend more than other customers.

I don't know how this conclusion was reached, but i don't think it is correct. People mostly take BTC as an investment rather than a currency, so they would prefer to hold it for a long time than spend it, but whenever they decide to spend it, they don't do that on too many items or on expensive stuffs, maybe just a cup of coffee, because the BTC spent seems like money that can generate more money to them, so why would they want to spend too much of it on goods.

You're right mate, there's nothing that increased here because it does not change the buyer's financial position, if he's willing to nake a patronage then he will always spend from the intended budget he has for his expenses, the advantage he only got start with when he discovers the business accept bitcoin in which he does not have to exchange the coins into fiat before making payments.

• 4. Elimination of traditional credit card fraud and identity theft risks associated with credit cards.

You're right, also in addition we can see the benefits of avoiding bulkiness in making payments, it brings about easy and increased security measures against the former means of making payments with fiat, theft in this regard is associated with physical assault which has been well dealt with.

[Bttzed03]

2. Increase in the size of transactions because buyers who pay with cryptocurrency tend to spend more than other customers.

I don't know how this conclusion was reached, but i don't think it is correct. People mostly take BTC as an investment rather than a currency, so they would prefer to hold it for a long time than spend it, but whenever they decide to spend it, they don't do that on too many items or on expensive stuffs, maybe just a cup of coffee, because the BTC spent seems like money that can generate more money to them, so why would they want to spend too much of it on goods.

You're right mate, there's nothing that increased here because it does not change the buyer's financial position, if he's willing to nake a patronage then he will always spend from the intended budget he has for his expenses, the advantage he only got start with when he discovers the business accept bitcoin in which he does not have to exchange the coins into fiat before making payments.

Perhaps you should also look at this from the perspective of a person with a deeper pocket. I understand that credit cards and other fiat payment platforms impose some sort of limits, which affects the purchasing power of an individual. No such limitation when they purchase using their self-custody wallets.

[Z-tight]

Perhaps you should also look at this from the perspective of a person with a deeper pocket. I understand that credit cards and other fiat payment platforms impose some sort of limits, which affects the purchasing power of an individual. No such limitation when they purchase using their self-custody wallets.

I don't believe that even people with deeper pockets would want to spend too much of BTC that grows, more than fiat that regularly falls in value, there may be no limitation in spending BTC that is in your self-custody wallet, but spending a currency that is affected by inflation and devalues regularly surely feels better than a currency that grows long term.

Probably when BTC was in its first few years and not really worth much, people could mine it easily and spend any amount of it for anything, even two large pizzaz for thousands of BTC, but now that people have seen how high BTC can grow they would prefer to spend a little of it on small stuff and hold the bigger portion for long, even if they have a deeper pocket.

[Jawhead999]

1. The site didn't mention which merchants they're interview and does it's offline merchant or offline merchant?
2. They only interview 4 merchants which is I believe they might only cherry pick merchant get the highest paid by Bitcoin.
3. How long the study and which country those merchants located etc.

I will say the study doesn't valid since there's many thing still not clear, just look to both countries: El Salvador and Central African Republic, although they already accept Bitcoin as legal tender and force every merchants to accept Bitcoin, total citizens who use Bitcoin in their countries are still low.

[Bttzed03]

Perhaps you should also look at this from the perspective of a person with a deeper pocket. I understand that credit cards and other fiat payment platforms impose some sort of limits, which affects the purchasing power of an individual. No such limitation when they purchase using their self-custody wallets.

I don't believe that even people with deeper pockets would want to spend too much of BTC that grows, more than fiat that regularly falls in value, there may be no limitation in spending BTC that is in your self-custody wallet, but spending a currency that is affected by inflation and devalues regularly surely feels better than a currency that grows long term.

Probably when BTC was in its first few years and not really worth much, people could mine it easily and spend any amount of it for anything, even two large pizzaz for thousands of BTC, but now that people have seen how high BTC can grow they would prefer to spend a little of it on small stuff and hold the bigger portion for long, even if they have a deeper pocket.

Regardless of your belief, people can spend BTC (or any other accepted crypto) however they want it. That much is true.

The articles in the OP are quite old and might not be too relevant to today's discussion but there are more recent studies supporting the idea that there's an increase in crypto spending. One of which is the crypto.com's 2021 report.

[Yatsan]

I doubt with attracting new customers and sales especially at this point wherein the market is still on bearish trend. People who are in this industry would hesitate to spend their assets on a daily basis because of the tendency to earn profit from holding. With regards to non-crypto users, same thing would happen I guess. What I am trying to point out is; people are still not ready for massive adoption of this technology and would still be as long as volatility is high on the market price of not only Bitcoin but also with other cryptocurrencies. This will only work at the present with crypto-related projects but I just doubt that it would as well be good for businesses;maybe in the future.

[Rruchi man]

Basically, higher revenue and ROI, a new clientele, and improved fraud security. Aren't they what businesses need?

No doubts that accepting bitcoins improves a business, but for a business to work, the owners and staffs have to put in the work for improved marketing and healthy customer relationship continuously, that is surer for a higher revenue. If you depend on the acceptance of bitcoins to increase clientele, you may be surprised when you discover that you are in a location where people prefer their bitcoins more for Investments and not as currency, so the plan doesn't work, or what happens when every business around begin to accept bitcoins.

[Genemind]

Mass adaptation is needed before it can prove that accepting cryptocurrency as an alternative means of payment option can attract new customers and sales. There are some stores and establishments in our country that accepts cryptocurrency as means of payment, but most people will choose to hold their cryptocurrency rather than spend it since cash or other options are available. Cryptocurrency is mostly viewed as an investment tool, not an alternative medium of exchange.

[bittraffic]

2. Increase in the size of transactions because buyers who pay with cryptocurrency tend to spend more than other customers.

I don't know how this conclusion was reached, but i don't think it is correct. People mostly take BTC as an investment rather than a currency, so they would prefer to hold it for a long time than spend it, but whenever they decide to spend it, they don't do that on too many items or on expensive stuffs, maybe just a cup of coffee, because the BTC spent seems like money that can generate more money to them, so why would they want to spend too much of it on goods.

They will spend the BTC when there is a bull market. But of course, this is if the shop is known to the crypto community. Every country I think should have a directory of shops that accepts BTC. Or they better be adding a huge logo the one that says BITCOIN ACCEPTED.

There are merchants that use other platforms like Binance Pay and then eventually convert their coins to fiat after receiving them, can they be undecided?

[Dr.Bitcoin_Strange]

• 1. New customers base:
  According to the research, 40% of customers that pay with crypto were new to the merchant.

Most people who pay with Bitcoin did not only do it the first time they saw a shop that accepted it. It could be a regular customer that visits your shop when you are not yet accepting Bitcoin, but when the organization decides to add another means of payment, which is Bitcoin, a customer who is aware of Bitcoin can decide to pay.

I want to believe that there are three kinds of merchants when it comes to accepting bitcoin or cryptocurrency as payment option. They are 1) The decided. 2) The undecided. 3) The Never will.

Like you talked about the category of Marchants who spend Bitcoin,

"The decided" are aware of Bitcoin and can pay with it; that doesn't make them a new customer. "The undecided" are aware of Bitcoin but may not want to spend it because they tend to hold it. If it requires them to pay for a service with their bitcoin, they can; that doesn't make them a new customer. In the "Never Will" category, they probably are either aware of or not aware of Bitcoin; they may also be your regular customers, but not just paying with Bitcoin.

I don't accept your facts. [/list]

[uneng]

1. New customers base:
According to the research, 40% of customers that pay with crypto were new to the merchant.

It doesn't happen often. I doubt most of the entrepreneurs who adopted bitcoin as payment method on their beauty and retail shops have seen an increasement of 40% in bitcoin payments from new customers.

2. Increase in the size of transactions because buyers who pay with cryptocurrency tend to spend more than other customers.

What does it implies? Are bitcoin adopters rich, so they can spend more, or they want to make most use as possible from a single transaction's fee?

3. Lower transaction costs: Transaction fees are lower than those for other payment types

That is not true. When transacting with btc you have to pay network's fees and when you transact with debit card there aren't fees in many cases.

4. Elimination of traditional credit card fraud and identity theft risks associated with credit cards.

This point is the one which makes more sense for me. Bitcoin transactions are irreversible, so there is no risks for sellers to be cheated by scammers.

[cabron]

4. Elimination of traditional credit card fraud and identity theft risks associated with credit cards.

This point is the one which makes more sense for me. Bitcoin transactions are irreversible, so there is no risks for sellers to be cheated by scammers.

But that wouldn't be a good reason for no refund policy.

Merchants accepting Bitcoin must be prepared to manage risks and educate themselves about best practices for accepting and using digital currency.  Especially in the bear market because if I were in thier shoes I might postpone accepting BTC in the bear market and I think many stores also did this even Elon. 

[uneng]

4. Elimination of traditional credit card fraud and identity theft risks associated with credit cards.

This point is the one which makes more sense for me. Bitcoin transactions are irreversible, so there is no risks for sellers to be cheated by scammers.

But that wouldn't be a good reason for no refund policy.

Merchants accepting Bitcoin must be prepared to manage risks and educate themselves about best practices for accepting and using digital currency.  Especially in the bear market because if I were in thier shoes I might postpone accepting BTC in the bear market and I think many stores also did this even Elon. 

On this aspect you are right. Transactions being irreversible is a good feature for sellers, but not good for customers, since it might be difficult to ask for a refund in case the seller is the scammer, instead of the buyer. That is a guarantee customers have when purchasing at online shopping websites and when using traditional payment methods through their banks, as they are centralized services.

Anyway this is a delicate matter. I think the refund policy should be clear, like customers have until 3 days to ask for it. So for 3 days, funds remain in bitcoin at the shop, but after that time period they can be swap into fiat and used by the shop's owner. Or the refund policy should return the customer btc amount proportional to the fiat value of the purchase.

[BitcoinPanther]

Perhaps you should also look at this from the perspective of a person with a deeper pocket. I understand that credit cards and other fiat payment platforms impose some sort of limits, which affects the purchasing power of an individual. No such limitation when they purchase using their self-custody wallets.

I don't believe that even people with deeper pockets would want to spend too much of BTC that grows, more than fiat that regularly falls in value, there may be no limitation in spending BTC that is in your self-custody wallet, but spending a currency that is affected by inflation and devalues regularly surely feels better than a currency that grows long term.

I don't have a deep pocket but I tend to spend more with Bitcoin than when I am spending in fiat.  I do not know the reason behind but I think it is because BTC is not in currency denomination making me think that the thing I buy with BTC is somehow "free".

Probably when BTC was in its first few years and not really worth much, people could mine it easily and spend any amount of it for anything, even two large pizzaz for thousands of BTC, but now that people have seen how high BTC can grow they would prefer to spend a little of it on small stuff and hold the bigger portion for long, even if they have a deeper pocket.

Probably that kind of mindset still continues until today.

4. Elimination of traditional credit card fraud and identity theft risks associated with credit cards.

This point is the one which makes more sense for me. Bitcoin transactions are irreversible, so there is no risks for sellers to be cheated by scammers.

But that wouldn't be a good reason for no refund policy.

Merchants accepting Bitcoin must be prepared to manage risks and educate themselves about best practices for accepting and using digital currency.  Especially in the bear market because if I were in thier shoes I might postpone accepting BTC in the bear market and I think many stores also did this even Elon. 

I am sure merchants have the refund policy, the irreversible transaction is useful to combat transaction cheaters that trigger money back option of credit cards after receiving the item.

[Merit.s]

BTC is a digital currency and assets therefore,it can be spent anytime by the owner and I believe some persons uses btc for their daily spending, that is why the advice of keep your savings in an offline wallet and leave only your daily spendings in your online wallet,to prevent it from hackers.What if you are been paid with btc for the services you rendered and you don't have any money on you,will you say that you will starve yourself because you want to hold for long, I bet you,you will die of hunger strive and your btc will routine in your wallet when you are dead. What am trying to point out is that everybody has his purpose for holding btc. Some as assets,some for making transactions easy for them and some for business i.e btc traders. Accepting btc will attract customers to your business that are into it.

[redsun114]

Business that accepts only dollars vs business that accepts dollars and euro and pounds would have a difference too. Lets assume you have an online shop, but you only accept paypal and nothing else, versus someone who would also offer credit card option on top of paypal, that would also have a better result.

This "adding crypto to your business is great" is not really a unique approach, adding more payment options will always be good, if you have just crypto, add paypal and credit card to it and you will get better too. That has always been like that, in any business, make it easier for the customer to buy, so that they do not have time to rethink and give up.

[Iroh]

While I applaud businesses that adopts bitcoin as a means of accepting payments for their services, I don’t think that because of its adoption in a business, it would have a significant increase in the increase of customers that patronize the business.
While it may very well attract a few customers here and there, it would not be significant as most people today still pay for services in fiat. I do know a business that is accepting bitcoin as a payment method would definitely attract me as I would definitely love to pay for services with bitcoin.

[Accardo]

Business that accepts only dollars vs business that accepts dollars and euro and pounds would have a difference too. Lets assume you have an online shop, but you only accept paypal and nothing else, versus someone who would also offer credit card option on top of paypal, that would also have a better result.

This "adding crypto to your business is great" is not really a unique approach, adding more payment options will always be good, if you have just crypto, add paypal and credit card to it and you will get better too. That has always been like that, in any business, make it easier for the customer to buy, so that they do not have time to rethink and give up.

I didn't go through the link OP provided, but the online merchants are the people to benefit from new customers just like you pointed out, adding bitcoin as a payment method would open a window for clients who wish to pay with BTC. For instance, businesses like SMM, a reseller that doesn't accept cryptocurrency will lose out lots of buyers, same is applicable to a merchant that doesn't accept paypal. All payments methods are needed for effective customer satisfaction, most customers can't patronize if paypal is not available; they only pay with Paypal. Hence, offline business that accepts bitcoin can be effective if a person is low on fiat, but the other way round, they'd prefer to use fiat. However, why it's crucial to add bitcoin as a payment method in offline businesses is that the competition is less; many businesses don't accept bitcoin yet. So, with bitcoin as an addition, the vendor will be one step ahead of his competitors.