Understanding the difference between cryptocurrencies and your typical online payment options!
As cryptocurrencies like Bitcoin and Etherium become increasingly more popular, we thought we would weigh in on the benefits of adopting cryptocurrency for your business and explore some of the differences between cryptocurrencies and traditional money.
So what exactly is cryptocurrency? Cryptocurrency, also referred to as digital currency, is a digital coin that can be exchanged online. Unlike traditional money, a central bank or government does not issue the value represented by digital currency. Consumers and businesses around the globe are now accepting cryptocurrency, with over 900 different digital currencies currently available online.
What makes cryptocurrency a better payment option? Let’s start by comparing the differences between cryptocurrency and traditional money:
Digital currency can provide cheaper, faster, and more secure transactions and can significantly lower transaction fees for your business. Cryptocurrencies generally require little to no transaction fees (under 1%) and are a global currency, meaning foreign transaction fees do not apply.
Debit and credit card transactions can vary depending on the financial institution they are processed through and typically cost your business 3.5% per transaction. Traditional money is also subject to foreign taxes and exchange fees when dealing with cross border transactions.
Because cryptocurrencies are virtually untraceable and do not require the consumer to provide personal information to make a purchase, this eliminates many of the normal security risks associated with making an online purchase. Unlike credit card charge backs, once a transaction has been processed with cryptocurrency, the sender cannot reverse it.
Credit cards, even ones with microchips, are still vulnerable to fraudulent activity, especially in situations where they do not require a security PIN. Because credit card purchases involve such a high level of personal information, this puts customers at a high risk of identity theft and credit card fraud.
Digital currency is a great option for those looking to get paid quickly. Cryptocurrency is like paying with cash and moves directly from one party to the other without being held up by a third party financial institution.
Credit card transactions are processed through a financial institution and can take anywhere from a few days to an entire week to deposit funds in to your account.
- Access to funds
Cryptocurrency is available to anyone with access to the internet. This includes over 2.2 billion people who have internet access but do not currently have access to a financial institution or traditional exchange. Depending on the product or service you are offering, digital currency could substantially increase your customer reach.
Debit or credit card services are limited to those who have access to a financial institution, which unfortunately excludes many people living in developing countries our extremely rural areas.
The best choice for your business. Comparing the pros and cons of both cryptocurrency and traditional money (debit or credit) can help you make a more informed decision on the best currency and payment options to implement for your business. Ultimately it comes down to the way you sell your products and the client base that you market to.
If you think that digital currency would be beneficial to your business and client base, please visit Coinpayments.net to learn more about integrating cryptocurrency with your business.