In 2016, Bitcoin merchant adoption slowed as a percentage of overall growth, while consumer adoption sped up, marking the coming year as one of noteworthy momentum driven in part by consumer demand for alternative payment options.
Meanwhile, venture capital is pumping at record rates into Bitcoin and blockchain startups and now exceeds $1 billion. Some experts predict another merchant adoption surge later in 2016 as consumer pressure grows and Bitcoin’s price continues its upward trend. On the bottom line, there are plenty of reasons right now for merchants, freelancers, nonprofit organizations and others to accept payments on the Bitcoin network. If your business or organization is not yet on the adoption bandwagon, consider these six benefits of taking payments in Bitcoin.
1. Near-Instant Settlement
The biggest benefit of accepting Bitcoin payments is the short amount of time in which payments are settled. Bitcoin is a digital cash system, which means there are no chargebacks. Once you hand some digital cash to someone else over the Internet, there’s no third party who can reverse the transaction in the future. Transactions in Bitcoin are often considered final after three confirmations, which usually take less than thirty minutes. Comparatively, card-based and PayPal payments aren’t finalized until the sender’s chargeback window has closed (usually a few months).
2. Low Transaction Fees
Transaction fees in Bitcoin are also quite low, at least today. It currently costs roughly $0.05 to broadcast a transaction on the network, and fees could decline as more users join the upcoming Lightning Network. Although Lightning Network transactions may end up having extremely low fees, on-chain transaction fees are likely to rise as the (Lightning) layer-2 protocol becomes popular. Merchants would be wise to upgrade to a wallet that supports the Lightning Network as the technology becomes available.
3. Seamless International Payments
Bitcoin is quite useful for international payments. This is especially true if you’re a freelancer working for a company in another country. International payments in the traditional financial system are prone to higher costs and delays, but every transaction on the Bitcoin network is treated equally. Abra, Align Commerce and Freemit are three startups attempting to use Bitcoin for cheaper international payments. In the past, Bitwage’s Jonathan Chester has discussed the reasons people are moving to Bitcoin for international payroll: Bitcoin reduces the costs of sending payments from one country to another, dramatically in the case of certain countries, by nearly eliminating the friction now endemic to the international payment transfer system.
4. Quicker Access to Money
In many cases, Bitcoin also enables quicker access to funds from sales. For example, BitPay allows merchants to receive fiat currency in their bank accounts the day after receiving a Bitcoin payment. The combination of Bitcoin payments with a Bitcoin debit card is also a powerful option for freelancers who wish to have access to the fruits of their labor as quickly as possible.
5. Less Customer Data Liability
In Bitcoin, recipients of payments don’t need to know anything about the senders of payments. Credit card payments almost always require a merchant to collect personal information about customers to verify credit card details. While having extra information about customers can be viewed as a positive in some respects, it’s also a negative as hackers like to attack merchants who have created centralized hubs of personal information and credit card data.
6. Transparency for Nonprofits
Since every Bitcoin transaction is made on a publicly verifiable ledger, it becomes easy for nonprofit organizations to offer more transparency when they accept donations in Bitcoin. The ability to verify a nonprofit’s donations openly can be an attractive feature for some donors. Some people may be more willing to donate when they can see how money is collected and spent in a transparent manner.
When you consider that Bitcoin improves data security, saves on processing costs, can garner new customers who prefer to shop, pay or be paid in Bitcoin–and that your image will be enhanced by your foresight in adopting Bitcoin as a payment method–an investigation into the relatively simple adoption process may be a smart investment of your time.
Kyle Torpey is a freelance journalist who has been following Bitcoin since 2011. His work has been featured on VICE Motherboard, Business Insider, Nasdaq, RT’s Keiser Report, and many other media outlets. You can follow @kyletorpey on Twitter.