Evaluating Accepting Cryptocurrencies as Payment

Cryptocurrency has risen from obscurity since the initial launch of Bitcoin in 2009, to receiving worldwide mainstream media attention. The hype in this space seemed to peak towards the end of 2017, as the value of Bitcoin soared to over £15,000.

We have been actively watching how cryptocurrencies have evolved and due to interest from a number of our clients we are looking into adopting cryptocurrency transactions in the near future.

What are the benefits of cryptocurrencies?

While there are actually over a thousand tradable crypto currencies, there are a handful that dominate market share and public attention, namely:

Bitcoin, BTC – The first and best known cryptocurrency with the largest market cap.
Ether, ETH – The currency/platform that operates on the Ethereum blockchain.
Stellar , XLM – A currency aiming to ‘bank the unbanked’ across the globe
Litecoin, LTC – A close relation to Bitcoin with slight technical improvements.

Some of the benefits of these currencies include:

Anonymous – Like using cash, it is difficult, and in some instances almost impossible to track purchases made using cryptocurrencies.
Global – Bitcoin is recognised across the globe, so you can spend it in different countries without having to pay an exchange rate to transfer to the local currency.
Decentralised – Bitcoin and other currencies are not controlled by any central authority and therefore cannot be subjected to fixed exchange rates, nor can transactions be frozen or blocked.
Low transaction fees – As there are no third parties (such as banks or credit card companies) sitting between payments, transaction fees for digital payments are generally very low.

Where to spend your Bitcoin?

The use of cash has fallen sharply over the past few years as customers have switched to digital and contactless methods; many retailers view accepting Bitcoin as the next logical step. In fact we are already starting to see an initial wave of businesses allowing customers to pay using crypto assets like Bitcoin.

According to WheretoSpendBitcoins, there are over 500 retailers in the UK alone that now accept Bitcoin as payment. In contrast many large businesses have shied away from accepting Bitcoin as payment for two main reasons:

Regulatory constraints – Some industries that are highly regulated have strict rules to adhere to around understanding their customers and the source of their funds. Having to go through strict verification processes therefore mitigates some of the benefits of cryptocurrencies.
Volatility – As the price of many coins is still volatile, with large swings in price over relatively short periods, many companies don’t want the exposure of holding these assets.

We believe that these businesses are possibly missing an exciting opportunity to offer their customers an instant and innovative way to pay.

We could lead the way

As a forward-thinking technology company with innovation at our core, we believe it is important that we embrace developments like cryptocurrencies early in their life cycle. We are therefore assessing how we might start accepting crypto assets as payment. We expect to initially accept popularly traded currencies such as Bitcoin, Stellar and Ether, before deciding on other currencies at a later date.

For specific details, or if you have questions about whether we will accept your currency of choice, don’t hesitate to get in touch.