If your business is in a high-risk industry, you are familiar with the complications and frustrations of obtaining a merchant account. If you have been able to get one, then your concerns shift to fulfilling contractual obligations and costs that are passed on to you by the provider to mitigate cost.
But wouldn’t it be amazing if there was a solution that took the sting out of having a high-risk merchant account? Cryptocurrency is more often being regarded as a potential payment processing solution for high-risk businesses.
What Is Cryptocurrency?
You’ve probably heard of cryptocurrency or digital currency more than once, but you may be unfamiliar with its inner workings. A simple definition of cryptocurrency is a digital asset that relies on strong cryptography, or coding, for transactions and the creation of additionals units of currency.
While part of its extreme security comes from intensely complicated and long algorithms, it also benefits from distributed ledger technology, sometimes referred to as blockchain. This means that the ledger, or records, for all currency transactions are stored individually among each users’ files. Ledgers cannot be tampered with because each individual record must match the record from every other user’s log. This security feature increases accountability and stops fraud.
Besides its security, another benefit of cryptocurrency is the ease of transactions and asset transfers. Due to the use of ledgers, the middle man of transactions can be cut out while still maintaining a high degree of accountability.
This also voids the need for the various transaction fees, which can become costly in daily business dealings.
Transactions are also more confidential because they are logged under anonymous codes that protect users’ identity and transaction history. This makes them less susceptible to identity theft when compared to traditional banking.
So how can cryptocurrency benefit high-risk businesses?
Cryptocurrency for High-Risk Businesses
Accepting cryptocurrency can help guard your business against issues that are common in high-risk industries while providing additional benefits.
- Chargebacks – Once a transaction is in the ledger, there is no reversing it. This guards against fraud and identity theft.
- Simplified transfers – Cutting out the middle man means cutting out international and domestic transfer fees. You also avoid the traditional wait time of banks to access your money.
- No rolling reserves – Rolling reserves are a part of risk mitigation for financial institutions but can put a strain on businesses that need to access their money. Because reduced risk is inherent in cryptocurrency, rolling reserves disappear.
- Providing competitive services – Cryptocurrency is growing in demand every year. Facebook is even planning to launch its own cryptocurrency in 2020. Accepting cryptocurrency not only shows that your business is on the cutting edge, but savings also allow you to provide goods and services at more competitive prices.
Change can be scary, especially for businesses where the wrong decision can cost you more than just money. But in order to grow, businesses need to embrace innovation.
Cryptocurrency offers the ability to try something new with minimal risk. In fact, it can save you both time and money in the long run. While still a burgeoning industry, cryptocurrency merchant accounts just might be the way all future transactions are made.