Getting paid is a top priority for every business. Without money coming in, people don’t have the cash in place to support their day-to-day activities. But even with the many options now available, there are barriers. Those include hefty fees and clunky solutions that make it difficult for clients to pay.
For those reasons, many business owners are now eyeing blockchain for business as an easier way to move payments, especially when other countries are involved. Although the technology still feels relatively new to business owners, other businesses have already begun to adopt it. But before you can determine whether blockchain is the right choice for your business, it’s important to know how it’s being used.
When consumers think of blockchain, they often instantly go straight to financial services, where a ledger records funds transfers for services like Bitcoin. However, there are other ways businesses use the tech, depending on their industry type. Government and healthcare may want it as a way to safely store records, while those in real estate may consider it a good way to record and manage property transfers.
For small and medium-sized businesses, however, blockchain currently makes the most sense for financial transactions.
Here are 12 great reasons force your business to adopt blockchain.
Many businesses like the ease that comes from online payments, but the fees can really cut into profits. Services like PayPal and Shopify charge between 2.9 percent and 4.4 percent, depending on whether the transaction is within the U.S. or crosses national borders. This doesn’t include the many other fees you may face, such as chargebacks and monthly costs.
Bitcoin eliminates the financial institution as the middleman, removing transaction fees. In fact, you can opt to pay no fee at all. If you do pay a fee, it will be much smaller than the two to four percent you’d pay for a normal fund transfer. Some businesses choose to pay up to one percent in order to push money through quickly if they’re in a hurry to pay.
Improved Customer Service
As Bitcoin grows more popular, more consumers will be searching for ways to spend their money. While they can cash their bitcoins out and spend them the way they’d always spend money, any business that makes it easier for customers to pay may find their business increasing. Bitcoin users have access to a way to search for businesses that accept it as payment, making it more likely you’ll win over someone who might not have known about your business. For existing customers, the more payment options you offer, the better.
But the benefits aren’t limited to B2C companies. Businesses with clients are even more likely to find their top customers are trading using this method. Hobbyists are a large part of the Bitcoin world and by taking the currency, you’ll set yourself up as a business that understands and caters to its clientele. You may also find that you create a common ground with your clients who are Bitcoin fans, since they’ll be excited to have someone who shares their interest in the blockchain.
Tips for businesses to get paid faster often include Bitcoin as one option. One reason is that it expands the methods clients can use to pay. They’ll review your invoice and consider paying online versus mailing a check. At that point, they may see Bitcoin among the choices and realize they have extra money in their account. This will do away with the delays that might have come as they waited for payments to come through so they had enough money in their bank account to pay you.
In addition to expanding customer payment options, Bitcoin payments can also be faster by nature than traditional payments. Instead of waiting for money to make its way through multiple banks, you’ll enjoy the benefits of peer-to-peer payments through the blockchain ledger. As long as you have a method set up to use or transfer the funds as needed, you’ll likely find Bitcoin payments easier for your business as well as your customers.
Experts often talk about the adoption curve that comes with any new technology. Blockchain is at the start of that curve. A large portion of consumers still aren’t even sure what it is, let alone how it matters to them. CreativeOne financial technology specialist Clifford Blodgett says, “By promoting your use of blockchain, you’ll solidify your reputation as an innovator within your industry and impress your customers and business partners.”
However, being first comes at a price. You’ll likely find that you’re often asked to explain blockchain to people who have no idea what it is or how it works. For those who uses blockchain for finance, education is crucial. Both you and your team should learn as much as you can so that you can talk about the tech as it comes up.
Blockchain adoption gives you an edge over everyone else for multiple reasons. One is that you’ll be seen as an innovator who cares about customers. If your business offers blockchain, it could make a big difference. In fact, it could be the one thing that makes a prospect choose you over someone else when all other things are equal.
As more businesses make the switch, it could have the reverse effect on you. You’ll lose your ability to compete. Clients will opt to work with another company that does what you do and has taken on the technology. This can go beyond finance as the tech evolves. A client may like the fact that others manage documents through a blockchain ledger, saying it’s safer. Closely watch trends and make sure you’re ahead of everyone else.
Protection Against Attack
There’s no guarantee that any technology won’t fall victim to an attack. However, blockchain offers safety not found with traditional payment systems. Through the use of Bitcoin hardware wallets, your business and its clients can maintain your private keys in a separate wallet safe from the online community. This keeps it away from the hacking attempts and viruses that are often seen with software-based wallets.
For those who prefer the software option, though, Bitcoin software-based wallets are available that provide an extra layer of protection. It’s important to first choose the right wallet and then ensure that you add security to keep your money safe. With thorough research, you can keep your own funds safe.
Every blockchain transfer goes through a central ledger, which documents data that is publicly visible to anyone who accesses it. This means both your employees and clients will have access to the information once it’s taken place, creating a level of trust not found with traditional payment methods.
However, with these benefits also come downfalls. Some have expressed concerns that everyone will be able to access those ledgers, including the government and competitors. At the current time, however, it’s doubtful your competitors will be scouring Bitcoin ledgers to poach your clients. As the technology grows in popularity, thought, it might be something to watch.
Repeat customers are almost always better than new customers, since you do away with the cost of marketing in order to attract new business. The more customers you can retain from one year to the next, the more you’ll benefit. By offering their favorite payment method, you increase the chances a customer will stick around.
However, preferred payment method is only one way blockchain technology can help foster loyalty. Many businesses use reward programs to encourage repeat business. Gyft Block builds gift cards on blockchain technology, promising a more secure and efficient way to issue rewards to customers. Customers who use Gyft Block can combine a business’s reward points with a gift card and forms of payment discounts to make a purchase through the platform. The end result is an all-in-one experience that drives customers to your business.
Although adoption is slow, many major banks are closely watching blockchain as a potential future part of operations. A Norwegian bank recently announced the option for customers to convert their financial holdings to cryptocurrency. One digital bank caters directly to Bitcoin enthusiasts by allowing deposits in the transaction type. Customers can skip the process of converting bitcoins and deposit them directly into the bank for use.
Smaller banks aren’t the only ones eyeing the technology, however. Some of the biggest banks in the world are taking measures to determine how blockchain can best help its customers. This is especially true of banks with a global clientele, since they’ll realize the demand for a service that makes it easier to transfer funds between banks located in multiple regions. As a business owner, it’s important to pay close attention to the various offerings at banks across the globe in case your current bank chooses to remain behind what other financial institutions are doing.
As your business grows, you’ll likely find more of a need to engage in cross-border financial transactions. Either you’ll have an international client interested in paying you across national borders or you’ll need to pay a vendor or contractor who isn’t located in your country. When that happens, you’ll often find that the fees cut substantially into your budget. You may even find that you’re forced to pay the fees both when receiving payments from clients and paying your overseas workers and that cost can quickly add up.
Although Bitcoin still has quite a bit of progress to make, over time it could easily take over the international payment world. This would eliminate the speeds and lag time that comes with international transactions, making businesses less reluctant to work outside of their own countries. This not only will encourage your business to be more global, but it will also make others more open to work with you.
In addition to its financial benefits, blockchain technology also offers organizations a secure, accurate way of maintaining records. Once an item has been added to the ledger, it cannot be changed. This makes it more reliable than internal databases and spreadsheets. For businesses that deal with contracts and legal transfers, this could be a better way to maintain everything.
In addition to real estate firms and government, law firms are also interested in the technology. Not only are entries on the ledger unchangeable, they’re also timestamped. This makes it ideal for cases where legal professionals need proof for a court case. This makes it likely moving forward that businesses will be advised by legal counsel to move to a blockchain-based system for high-profile activities.
Blockchain technology stands to change the way businesses secure their infrastructures, keeping data safe from hackers. This goes beyond the financial transactions they send and receive, extending to the way they store and transfer customer information. The threat of hacking attempts is growing greater with each passing year. It’s important that businesses have measures in place to protect customer data. This is especially true in industries like healthcare and government. In those industries, failure to follow rules could result in huge fines and penalties.
If you aren’t sure how to get started, there are new solutions that can do the work for you. SaaS apps like RecordsKeeper offer secure records storage. Perhaps the best part of this type of software is that it also makes it so records can’t be changed. For companies that deal extensively in database work, this helps keep people from editing records after the fact. It may, for instance, be a great way to keep call logs for a customer service desk. This desk where supervisors want to be sure that information isn’t edited after the fact.
Blockchain is still growing as a technology. Although your business doesn’t need to buy in right away, you should study as much as possible. Be aware of how it’s changing the business world. This will help you avoid being behind the curve. Especially if others choose to adopt the technology long before you do.