Should You Accept Cryptocurrency in Your Store?
By Nick Mann
Cryptocurrency, simply put, is a digital currency that allows customers to purchase goods and services through a highly secure technology called blockchain. In turn, this makes it “nearly impossible to counterfeit or double-spend,” explains Investopedia. It’s also extremely convenient to use, allowing users to easily make payments via a smartphone or computer. And with society collectively becoming more comfortable with cryptocurrency, we’re seeing a growing number of retailers accepting it. The question is, should you?
How much has cryptocurrency grown?
There’s no exact data on the total number of cryptocurrency users worldwide. But research from Statista gives us an idea of how much it’s grown by looking at the number of Bitcoin wallets over the past decade. According to their findings, the number of wallets climbed from just over 1 million in 2014 to 22 million in 2018 to 66 million in 2021. In terms of the total percentage of Americans that use crypto, separate research from Statista found that it was 6% as of 2020. While usage has plateaued somewhat recently, this data shows that there’s been a dramatic rise in the number of users.
How many businesses accept cryptocurrency as payment?
A survey by Zogby Analytics found that 36% of small and mid-sized businesses accepted cryptocurrency in 2020. Further, 59% of those companies said they purchased it for their own use. Zogby also discovered that newer businesses (those that have been operating for five years or less) are more likely to use crypto at 47%, whereas only 21% of those who have been in operation for more than 20 years do. I personally was a little surprised that accepting cryptocurrency is as common as it currently is. Over a third of small and mid-sized businesses feels like a substantial number and illustrates the positive sentiment most retailers have toward it.
Other notable cryptocurrency trends
Look at forecasts for the next few years, and things appear quite promising. The Cryptocurrency Market Report: Trends, Forecast, and Competitive Analysis by ResearchandMarkets.com, for example, says, “The global cryptocurrency market is expected to grow with a CAGR [Compound Annual Growth Rate] of 32% from 2019 to 2024.” They also point out that key contributors to this projected growth include the transparency this digital currency provides, as well as fluctuating monetary regulations and larger investments from venture capitalists. In terms of the specific types of cryptocurrencies that are most popular, TradingView unsurprisingly puts Bitcoin at the top, which is followed by Ethereum, Tether, Binance Coin, and Cardano — rankings that are all determined by market cap.
Another trend that experts are predicting as we move deeper into 2021 and beyond is a growing number of regulations. Although a big part of the appeal of crypto up to this point has been its inherent lack of regulations, there’s already a push by many central banks and governments throughout the world to better regulate and tax it. That right there, however, shows how these digital assets are rapidly become legitimized.
Also, Ethereum, which is currently the world’s second biggest cryptocurrency, is set to make big gains. Up until now, Bitcoin has been hands down the most widely recognized and used virtual currency. But Ethereum could soon catch up or even potentially usurp Bitcoin in the near future — something that business owners who are considering which types of crypto will want to keep in mind. This brings me to my last point.
Should you start accepting it?
There are some definite benefits to your military surplus/tactical/outdoor store accepting crypto, including lower transaction fees than you’ll often pay with debit and credit cards. Transactions are processed instantly, which gives you faster access to funds, whereas debit and credit cards typically take a few days. It also allows your business to appeal to a broader market, especially younger generations. 55% of 18- to 34-year-olds, for instance, say they’re likely to use Bitcoin in the next five years, while 46% of 35- to 44-year-olds are, explains Spencer Bogart of Blockchain Capital.
That said, there are certainly some risks that come along with it — mainly the volatility of cryptocurrency. And as I mentioned before, there’s a lot of uncertainty surrounding how it will be regulated moving forward, which makes some people feel ill at ease. Besides that, there’s an inevitable learning curve, which isn’t ideal for less tech savvy business owners. So, these are all things to take into consideration.
Everyone’s situation is different, but here’s my advice on deciding if it’s right for you. If you’re noticing a high volume of customers asking if you accept cryptocurrency, and having to say no is creating friction, it’s probably time to start using it. You definitely want to do plenty of research and learn the ins and outs of the process. But we’re at a point where the risk is usually worth the reward as long as there’s a major demand. However, if hardly any customers inquire about it, there’s probably no reason to rush, and I’d suggest waiting until it evolves a bit more. In other words, it really just boils down to consumer demand.
Adapting to the future
It seems like it wasn’t all that long ago when cryptocurrency was merely a novel concept used by only a handful of adventurous mavericks. But it’s essentially become mainstream over the past few years and is a type of payment many military surplus/tactical/outdoor stores are considering. Hopefully, this post has provided some clarity as to the current state of crypto, where it’s heading, and whether or not it makes sense for your business.