Fiat money (Credit/Debit cards) to BTC Payment Gateway
The number of cryptocurrency users continues to grow. This is shown in the positive dynamics of many metrics – for example, in the growth of the number of active Wallets in the network of the biggest digital currency by capitalization, Bitcoin (BTC).
At a time of increasing interest in cryptocurrencies, businesses face a challenge: accepting virtual coins for payments. Despite the clear need to pursue change, many companies are still ignoring new financial instruments. Why should a business consider accepting cryptocurrencies? What crypto processing services deserve attention? And how does one swiftly move beyond traditional bank transfers and start operating with digital assets?
Why should businesses accept cryptocurrencies?
One way to stimulate the acceptance of cryptocurrency payments for business is to expand the user base by attracting crypto community members. In the current environment of 2021, many users are consciously dropping traditional money in favor of digital coins, and there are several reasons for this. One of these reasons is a desire to secure assets from devaluation.
During the Covid-19 pandemic, the world has been locked in a financial crisis. To combat it, the regulators of many countries, including the US, have opted for a quantitative easing policy that involves injecting newly printed traditional money into the economy. The artificial increase of fiat in circulation might negatively affect its value. As a result, people with such assets might face devaluation due to government decisions.
Interesting fact – amid Covid-19, cryptocurrencies have gained the greatest popularity in Nigeria. According to Statista, around one-third of the country’s population has already used digital assets to execute transactions, or hold an account with virtual coins.
With Bitcoin and other similar cryptocurrencies, the number of coins that can ever be in circulation is limited by an algorithm. No one can artificially inject new coins into circulation. In addition to a limited supply, many cryptocurrencies also have instruments for inflation control that are embedded in the code within the cryptocurrency. For example, the Bitcoin network regulates the issuance rate of new coins.
As the cryptocurrency market grows, BTC gains new buyers. The benefits of this digital asset over fiat is that it attracts big companies, such as Tesla, among others. Given the limited number and the decrease in the supply of coins in the market, the value of BTC has gone up. This is shown in the positive dynamics of the number of BTC that are not moving, as long-term investors buy cryptocurrency and only exit after a long continuous growth in its value. See below for a graph that illustrates by years the changes in the number of bitcoins with no movement.
The growth in value of cryptocurrencies and the number of users are not the only reasons why a business should consider accepting digital assets for payments. Other benefits include the following.
Executing transactions in cryptocurrencies is cheaper than in traditional money. The cost savings could be directed toward business development.
A cryptocurrency account cannot be blocked. A company that works with digital assets can forget about any transfer issues like blocked transactions.
The instruments used to accept cryptocurrencies help a company be ready for the next evolutionary phases of the financial market. Many countries, like the US and China, are developing digital versions of their national currencies (CBDC). In the future, the market will see digital dollars, digital yuan and other digital versions of fiat currencies. The presence of instruments for accepting payments in cryptocurrencies provides a company with an opportunity to start working with CBDC swiftly.
Summary Integrating crypto payments has become a business necessity. It helps grow the customer base and cut costs on commissions. But apart from that, crypto processing solutions prepare companies for new financial instruments, including CBDC.