Bitcoin vs. Credit Cards
Some small-business owners are accepting bitcoin in payment for their products and services. While this all-digital currency may evolve into a practical payment method n the future, it offers little benefit to you or your customers. Here’s a quick comparison between bitcoin and credit cards.
Bitcoin Value Fluctuates Wildly
The big downside of bitcoin as currency is that it has no fixed value. The price of a bitcoin in dollars can rise or fall by 80 percent within a single day. No merchant who cares about accurate bookkeeping will be able to cope with the chaotic global bitcoin market, and conflicting IRS regulations regarding bitcoin create headaches when it comes to paying taxes.
Bitcoin Carries No Customer Data
Like cash purchases, bitcoin payments do not include any customer info. If you want to provide special customer reward programs or use analytics to target your advertising, bitcoin won’t help you. It’s designed to be invisible. For this reason, it’s the currency of choice for anyone engaging in online transactions.
Credit Cards Connect You With Your Customers
When your customers use credit cards, you receive their information and an itemization of what they bought. Many easy-to-use software solutions can help you use this data to shape rewards programs and marketing campaigns.
Bitcoin E-Wallets Lack Security
The National Federation of Independent Businesses warns that because bitcoin only exists as digital information in “e-wallets,” you have no recourse for any loss you suffer due to theft. All bitcoin transactions are irreversible.
Credit cards, on the other hand, are becoming more secure. In addition to the layers of fraud protection that your credit card issuer provides, new smart-chip technology increases card security for you and your customers.
Customers Rely on Credit Cards
Worldwide credit card transactions amounted to over $227 billion in 2015, and they are projected to reach $515 billion by 2024. There is good reason for this expansion, as more and more consumers become familiar with the convenience of electronic payment solutions.
Furthermore, 80 percent of consumer spending in the U.S. is currently cashless, according to Consumer Credit. The proliferation of budgeting apps and other electronic solutions contributes to customers’ growing preference for the ease of credit card transactions.
There’s a lot of excitement over bitcoin’s potential as an entirely new form of currency in Austin, central Texas, and the world in general. Keeping up with the progress of this cryptocurrency, or even investing in it, makes for a fascinating side venture, but your accountant will tell you that it’s not a solid foundation for your daily finances.