Virtual currencies are on the rise in Africa, and especially in Kenya.
Business owners in Kenya have taken note and boarded the crypto-currency bandwagon. Some are now accepting bitcoin as a mode of payment for their services.
But, what is this growing craze of cryptocurrency?
Cryptocurrency is a digital currency not controlled by any bank or government but rather uses encryption techniques to regulate its use and generate its release.
Every transaction is verified by users on a network. Those transactions then become public record to prevent the coin being spent multiple times by the same user.
The key to using cryptocurrency is understanding that each coin is unique and some coins offer more protection and privacy than others.
Below are benefits of accepting cryptocurrency in your merchant store:
Accepting cryptocurrency as a payment method will give you access to a whole new market of tech-savvy consumers who have created a community within the cryptocurrency market. It allows you to dip into broader markets and appeal to consumers all around the world. 28 per cent of shopping cart abandonment happen for lack of the payment option the shopper wanted to use. Therefore, the more payment options you add, the better. And it offers customers some flexibility.
Unlike credit card systems that take a few days to batch out and process, cryptocurrency is processed immediately, giving you instant access to funds. Fast transactions can help streamline your business cash flow.
Another benefit of offering cryptocurrency as a payment method is the low fees associated with each transaction.
After you complete a transaction with cryptocurrency it becomes difficult to reverse, unless you have the consent of the merchant. This offers retailers more security when it comes to e-commerce fraud since there is no middle force, such as a bank, that is able to withdraw the funds from your account without your consent.
Prepares your business for digital revolution
While cryptocurrencies are just a niche market for now, with a very small value in the global financial scene, more and more businesses and companies are embracing them, whether to respond to changes or differentiate themselves from other businesses.
This means cryptocurrencies could play a huge role in the financial, payment and general markets of the future. That point is hard to discredit given our constant need to rush into a more digitized world. Consider how cryptocurrencies have grown in value over the years with the rate accelerating greatly in the last two years.
Position yourself to harvest some real profits
Mention a case in point where you first accept a given cryptocurrency, say Bitcoin, and the value of that specific digital coin or altcoin or whatever grows over time, then you sell. You stand to gain profits from the growth in value. So, you can attempt to become an early adopter of cryptocurrencies while retaining your current payment method(s) and watch for times when you might benefit by accepting cryptocurrencies.
Ease of accepting international payments
Small online retailers and independent consultants often don’t sell their wares and services internationally because of expensive cross-border transaction fees. Cryptocurrencies relieve the steep cost of going global, making cross-border payments easier, faster and cheaper.
How to accept crypto as payments for your business
You can choose to accept payments in crypto and liquidate in p2p platforms like LocalBitcoins, businesses e.g Betty’s place in Nyeri County have been using this model.
You can also choose to use payment processing platforms e.g Bitlipa that enable you to accept payments in cryptocurrencies, provide you with a wallet to store your assets and option to exchange your crypto to FIAT/A stable coin.
The writer is the COO at Point50capital. Twitter @Theo_mwangi