The payment space continues to expand with the surge in popularity of cryptocurrency. Learn some of the advantages and disadvantages for businesses and consumers in using cryptocurrency as a form of payment.
The meteoric rise and steady popularity growth of cryptocurrency have caught the attention of many large and small businesses. While many still see cryptocurrency more as a form of investment, there is a growing number of people who are looking to pay for goods and services with cryptocurrency—and many vendors are starting to catch on.
Of course, there is a litany of advantages for vendors who accept cryptocurrency as a form of payment. The use of blockchain technology makes it extremely difficult to make fraudulent transactions, vendors can avoid high transaction fees, and transactions that usually take days to go through are completed almost instantaneously through cryptocurrency.
These advantages mean that, despite some of the risks involved with accepting cryptocurrency, many businesses are embracing cryptocurrency as a form of payment. Here are just some of the businesses that take cryptocurrency and how customers benefit from it.
Tesla was one of the first recognizable companies to fully embrace Bitcoin, both by investing in it and accepting Bitcoin as a form of payment. Having said that, other car dealerships were already beginning to take advantage of accepting cryptocurrency, including some luxury car dealerships as well as several BMW dealerships across North America and the United Kingdom.
For customers, using cryptocurrency at a car dealership offers many advantages. Purchases that are made through cryptocurrency clear through almost immediately, meaning customers don’t have to wait several days for their car purchase to go through. The fraud protection afforded to cryptocurrency, especially with so much money at stake, only adds to cryptocurrency’s appeal.
Online retailers are getting in on the cryptocurrency craze as well. Etsy, Newegg, and Overstock are just some of the e-commerce sites that accept cryptocurrency. Furthermore, any online retailer that operates through Shopify has the option to take cryptocurrency payments as well.
For these sites, accepting cryptocurrency makes a lot of sense. These retailers have an international reach, and accepting cryptocurrency allows them and their customers, to avoid dealing with exchange rates. Customers who may not deal with a traditional bank are also able to purchase through these sites.
An interesting case study of retailers that accept cryptocurrency is that of Lush, a major beauty retailer operating in North America and the United Kingdom. Lush’s acceptance of cryptocurrency, specifically Bitcoin, doesn’t just allow the retailer to expand its global reach. It also enhances the overall image of the brand.
Lush’s marketing emphasizes the brand’s progressive and forward-thinking policies. Choosing to take on this new form of payment, despite the risks, allows the company to show how its actions are consistently in line with its brand image. This is a concrete way for Lush to prove to their customers that their support is not misplaced.
High-risk businesses, or businesses that operate in a high-risk industry with a high chance to fail, have taken to accepting cryptocurrency, despite its volatility. This includes the cannabis industry, the gambling industry, and even start-ups.
It may seem strange for high-risk businesses to take on even more risk by accepting cryptocurrency, but the advantages can potentially offset those risks. Many of these businesses currently operate in legal “grey areas” around the world. The deregulated nature of cryptocurrency allows many of these types of businesses to accept transactions without going through official channels, such as traditional banks or credit card companies.
Indirect Acceptance of Cryptocurrency
While some businesses have wholeheartedly embraced the acceptance of cryptocurrency, some have taken a more cautious approach. Cryptocurrency is still in its early stages, especially when it’s stacked up against fiat currency. Its volatility, coupled with regulations that are still being written in regards to cryptocurrency, has caused hesitancy among some industry leaders—but even they have found some workarounds.
Amazon, for example, currently does not allow using cryptocurrency as direct payment for listed products but will allow you to purchase Amazon gift cards with cryptocurrency. Instead of buying the item directly using cryptocurrency, you will need to use the Amazon gift card instead. Home Depot, Sears, and CVS are examples of brick-and-mortar stores that operate similarly when it comes to indirectly accepting cryptocurrency.
Cryptocurrency as a Fact of Life
Despite the growing acceptance of cryptocurrency in everyday business transactions, it has a long way to go before it becomes truly accepted as a form of currency. One of its biggest stumbling blocks is its instability. Technological barriers can stop many customers from spending cryptocurrency as well.
However, there are many benefits to accepting cryptocurrency, and it shows in the increasing number of businesses that allow you to pay with it. Industries that deal with high-value purchases, that want to reach a global audience, and that enjoy the fact that cryptocurrency is deregulated have enthusiastically adopted cryptocurrency into their policies.
For the consumer, this expands the choices they have when it comes to the businesses they want to support. As more and more customers demand more payment options, more businesses will need to seriously consider adopting cryptocurrency as a form of payment.
Readers should consult their own attorneys or other tax advisors regarding any financial or tax strategies mentioned in this article. These materials are for informational purposes only and do not necessarily reflect the views or endorsement of Santander Bank.
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