Cryptocurrency has gained significant attention during the past decade, mostly due to the high changeability of the market, which can also prove to be very profitable if you know what you are doing. Cryptos are intended as an alternative means of payment for regular (digital) money. You can pay in many webshops with cryptocurrency, plus you can also choose to accept cryptocurrency yourself. You can make your webshop suitable for crypto payments, which would provide you with a broader target audience as increasingly more people are starting to buy and pay in cryptos.
At this point in time, debit cards remain by far the most popular payment method among consumers, especially when shopping in physical stores and locations. But buyers who rely on blockchain technology in essence pay with cryptocurrency. The main benefit of using cryptocurrency, is that you can be paid without the intervention of a payment service or bank. You can also easily convert cryptos into euros, US dollars or British pounds.
What is cryptocurrency exactly and since when does it exist?
Cryptos haven’t been on the market for a long period of time, since their existence is also connected to internet and technology in general – without these, crypto could not even exist. Digital currency systems did in fact exist since technology started playing its role, but not in the same fashion as crypto. The main reason crypto is inherently different, is the fact that all former digitalized currencies were centralized. This means that there was a larger organization or body involved, such as banks, as an intermediary. But cryptocurrency is decentralized in nature.
The interesting part about cryptos is, that reason it was invented is somewhat different from what it has become. The inventor of Bitcoin, Satoshi Nakamoto, wanted to create a cash system specifically aimed at peer to peer payments. Due to centralization, it was never possible before to create an online digital cash system that only deals with the people involved in the payment process. This man wanted to change this, so people could freely exchange money without any intermediaries involved anymore. Since he could not build a centralized cash system, he decided to create a digital system with no central controlling or governing body. Bitcoin would be the property of the entire community.
Bitcoin was created in 2008, and the value of the coin went upwards very rapidly. During the first years, crypto was a bit obscure to many consumers and thus, not many people dabbled in it. The people who did, won big though, as the value of a single Bitcoin at its peak was around 60,000 euros in 2021. If you compare this to a value of only 25 euros in 2009, this provided for quite a lucrative investment! Since the success of Bitcoin, many other coins have been created and the market is currently booming. If you want your company to invest in the future, then a crypto payment option might be a very wise decision.
Why the e-commerce business is now also including crypto
A lot of webshops are starting to accept cryptocurrency as an alternative form of payment. Some of these entrepreneurs started to gain interest in cryptos some years ago, and with very beneficial results. Since a few years, more and more webshops are offering extra payment options next to iDeal and Paypal, for example. Some e-commerce businesses even let the clients choose in which crypto they choose to pay, by adding multiple coins as a payment possibility. Since there are so many coins available nowadays, this might provide more opportunities for payment options and, thus, will make the customer experience more extensive.
Some webshop owners are even contacted by their clients personally, asking them whether a crypto payment option is possible. Due to the anonymity of crypto payments, consumers are gradually deciding to use cryptocurrency themselves. The added benefit of owning a webshop with this option, is that you can be considered somewhat of a pioneer, as the regular forms of payment are still much more popular. In the next few decades this might change drastically though, so it might be beneficial to consider a crypto option for your online business. You might also enjoy the added benefit of referrals by existing clients, providing you with a larger client database. This, in turn, is very positive for your Search Engine Optimization (SEO), which will
Special plugins for cryptocurrency
Would you also like to accept cryptocurrency in your online store? Then you will need a special plugin to enable payments in cryptos. These are fairly easily accessible, for example via WooCommerce and in some cases even free of charge. You can then choose all the cryptos you want to accept. We strongly advise, however, to stick to the basics such as Bitcoin and Ethereum. Some newer coins are highly volatile and less profitable, than the original and longer existing coins. The plug-in then automatically arranges the processing of the transaction. In addition, you will need a ‘wallet’ for your company, which is the digital place in which the cryptos end up. With a good wallet you receive, send and manage your crypto coins. You can download a wallet on your PC, laptop or smartphone, or use an online wallet.
If you have all the software and plugins ready, your customers can start paying you in cryptocurrency. The customer follows the regular procedure, such as filling in personal details, and then they can choose a coin via your payment menu. In many cases, this results in a QR code that can be scanned by the customer with his/her phone. Then, the customer’s wallet automatically fills in the amount, the fee and the rate. With a swipe across the screen, the customer agrees to the transaction and pays. And you automatically receive the sales amount easily in your wallet. Transferring the amount to your bank account can be done automatically, or you do it yourself via a transfer, which we will describe below.
Can you convert crypto easily to fiat money?
Once someone pays you in crypto, you will inevitably want to convert the cryptocurrency to fiat money at some point. For example, euros, US dollars or British pounds. There are multiple exchange services that convert crypto coins into usual currencies, or into another cryptocurrency. The exchange is done automatically. You can choose to directly convert it into regular money, or you can speculate a bit with the cryptos you own. Also keep in mind, that the receipts from any crypto payments are part of your turnover, and, ultimately, count as profit. Depending on your legal form and assets, you will need to pay tax on these sums as well, just like with fiat money.
Factors to take into consideration
If you want to provide an option to pay with cryptocurrencies to your customers, this will contribute to the digitization of your company in general. We advise to weigh the added value for yourself. In some cases, you will definitely see more sales, as any customer who only wants to pay in crypto can just as easily go to a competitor. If you want to dabble in crypto, at least pick a wallet that is registered with the Dutch Bank (DNB). This organization supervises compliance with the Money Laundering and Terrorist Financing Prevention Act (Wet ter voorkoming van witwassen en financieren van terrorisme) and the Sanctions Act 1977. If you are unsure about the best choice for you, Intercompany Solutions will gladly assist you with personal advice.
Pros and cons of accepting crypto payments
We have made a compact list of some well-known advantages and disadvantages of offering a crypto payment option.
- All crypto payments are made via modern digital technology – blockchain. This is considered safe and reliable
- More and more payment services such as PayPal also accept cryptos as a means of payment
- Paying with cryptos is fast. The amount is transferred directly from customer to supplier or vice versa
- You have no extra costs for international payments because you use the same rate
- Accepting cryptos as a means of payment makes your company attractive to new customers
- Cryptos can become more valuable, whereas fiat money does not fluctuate that much
- Paying with cryptos is not yet so well known to the general public, so the amount of extra customers might not be huge in the beginning
- The value of the cryptos changes quickly, and can go down as well as rise any day
- For priority when transferring with cryptocurrencies, you sometimes have to pay extra which can be expensive
- Cryptocurrency regulations are young and still need to be developed in the future
- You can no longer reverse transfers. So check carefully in advance whether the cryptos are going to the right wallet
- A number of cryptos consume a lot of energy. This is detrimental to the environment
Intercompany Solutions can assist your company becoming crypto-ready
If you would like to expand your horizon and business, adding a crypto payment option might just be the change you need. The practical process is fairly easy, as we have discussed above. Nonetheless, you might have some questions about cryptocurrency, or maybe you need reassurance that the entire process is safe. With many years of expertise in establishing and assisting Dutch companies, we can offer you solid and professional advice to help your company grow into a successful business.