An increasing number of businesses worldwide are using Cryptocurrency and other digital assets for a host of investment, operational, and transactional purposes. The most popular cryptocurrencies have been touted by some as the secure money of the Internet. Using proper caution, one can make or receive payments to anyone without revealing any sensitive information linked to their digital accounts or wallets.
Riding high on the increasing acceptance of Digital Currency, many businesses have started offering payment-related services that make and receive payments in Digital Currency easy.
Thanks to these payment services, now offered by JJS Global, you can pay for a sandwich at the corner sandwich shop by scanning the shop’s QR code on your mobile phone, purchase a high-end laptop from a large and established corporation like Microsoft by making a payment in a Digital Currency or top off your Digital Wallet with a Digital Currency at an ATM.
Why should merchants consider accepting Digital Payments?
More than 2,300 US businesses accept Digital Currency, according to one estimate from late 2020, and that doesn’t include bitcoin ATMs.
To captivate your merchants thinking about accepting Digital currency, here are some of the rationales behind why some businesses are currently using Digital Currency:
- Digital Currencies may provide access to new demographic groups. Users often represent a more cutting-edge clientele that values transparency in their transactions. One recent study found that up to 40% of customers who pay with crypto are new customers of the company, and their purchase amounts are twice those of credit card users.
- Introducing Digital Currency now may help spur internal awareness in your business about this new technology. It also may help position the company in this important emerging space for a future that could include central bank digital currencies.
- Digital Currencies could enable access to new capital and liquidity pools through traditional investments that have been tokenized, as well as, to new asset classes.
- Digital Currency furnishes certain options that are simply not available with Fiat Currency. For example, programmable money can enable real-time and accurate revenue-sharing while enhancing transparency to facilitate back-office reconciliation.
- More companies are finding that important clients and vendors want to engage by using Digital Currencies. Consequently, your business may need to be positioned to receive and disburse Digital Currencies to assure smooth exchanges with key stakeholders.
- Digital Currency provides a new avenue for enhancing a host of more traditional Treasury activities, such as:
- Enabling simple, real-time, and secure money transfers
- Helping strengthen control over the capital of the enterprise
- Managing the risks and opportunities of engaging in digital investments
- Digital currencies may serve as an effective alternative or balancing asset to cash, which may depreciate over time due to inflation. Crypto is an investable asset, and some, such as bitcoin, have performed exceedingly well over the past five years. There are of course, clear volatility risks that need to be thoughtfully considered.
The two approaches for merchants accepting Digital Payments:
The first question to ask a merchant when considering accepting Digital Payments as part of their businesses operations is:
Does the merchant want to hold Digital Currencies on their balance sheet (the “Hands-on” approach) or simply adopt crypto-enabled payments (the “Hands-off” approach)?
The “Hands-off” approach simply means the merchant wants to accept Digital Currency, but just to facilitate payments. Digital Payments are converted to a Fiat Currency right at the time of purchase, the merchant is accepting the Digital Payment, but never actually touches it. This approach is a great way for a merchant to explore accepting Digital Payments, without the exposure or volatility of holding the Digital Asset.
The “Hands-on” approach to accepting Digital Payments means the business wants to go beyond just accepting Digital Currency as a form of payment; business owners in this category have made the commitment to adopt Digital Currencies as an alternative to cash and/or other assets held on their balance sheet.
With solutions provided by JJS Global, we can facilitate either of these approaches to Digital Payment acceptance. We can also facilitate hybrid solutions of the two approaches to meet the merchant’s business objectives. Some merchants may want settlement in both Fiat Currency and Digital Currency. For example, if a merchant makes a sale for $100.00 USD in equivalent Bitcoin, they can take a portion, say $50.00 in Fiat Currency and $50.00 in Digital Currency. These ratios can be scaled up or down as the merchant’s business needs change.
To determine the right path, merchants need to make a careful determination of the best fit for their business objectives. Consider the potential benefits, drawbacks, costs, risks, system requirements, and more. Your merchant may want to consult their accountant to discuss the advantages and drawbacks of holding digital currencies on their balance sheet.
No matter how the merchant wants to approach implementing Digital Payments into their organization, JJS Global is here to help. We have options that include payment gateway integrations for eCommerce to ATM’s that simply dispense Digital Currencies into customer wallets.