Should Your Company Accept Bitcoin and Other Cryptocurrency Payments?

DISCLAIMER: NEITHER I NOR ANY OF THE COMPANIES I AM AFFILIATED WITH TRADES CRYPTOCURRENCIES.

Should Your Company Accept Bitcoin And Other Cryptocurrency Payments?

Have you ever considered cryptocurrency as the future of payments? In the last few years, enabling PayPal or Apple Pay was the most significant trend, but how can the trend move further??

With the increasing number of cryptocurrencies available, companies should at least consider cryptocurrencies as a payment method to stay competitive and gain market traction with crypto users.

Before you make your decision, let's look at the pros and cons of using crypto as a payment option.?

What is cryptocurrency??

After a recent Blockchain Event, I received an informative book detailing over 100 different cryptocurrencies. With so many different cryptocurrencies on the market, what makes each one different? For starters, what is a cryptocurrency in the first place?

"A cryptocurrency (or cryptocurrency) is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets." Source: Wikipedia

The origin of crypto begins in 2008, where a major problem was addressed by technology and creative financial minds. Billions of unbanked users were without access to bank accounts or banking services. The direct solution was to create a digital, borderless currency independent of legacy systems, local legislation, or any specific country exchange rates and would allow anyone from across the world to purchase services and goods from anyone.

Crypto enables borderless, real-time transactions for anyone anywhere they are in the world. Those transactions happen all over the world and are recorded on a public ledger known as the Blockchain. Cryptocurrencies has increased interest within various communities, and many users believe that digital currencies are the future.

In my opinion, cryptocurrencies are a great alternative to traditional fiat currencies facing diversified challenges. The current fiat scheme is slowing down a fast-moving ecosystem where everything needs to be performed "immediately" due to consumers' expectations.

However, a digital currency still needs to follow specific regulations and frameworks to work. It should be deployed in a reasonably secure and compliant environment to prevent fraud and other problems.

The Ultimate Question: Should your company accept cryptocurrency?

There are many pros and cons to accepting cryptocurrency. One benefit for business is international e-commerce. Accepting cryptocurrencies for e-commerce can present a real competitive advantage and a new way to access an untapped market. For foreign e-commerce companies, this advantage can be significant since you can accept payment from more people.

Number of Blockchain wallet users worldwide from 1st quarter 2015 to 2nd quarter 2018

Source: statista.com

Accepting cryptocurrency will allow your business to directly enable and attract the increasing number of crypto users globally and attract younger, tech-savvy users looking for a place to spend their crypto.

With the concerns around online payments and credit card fraud, cryptocurrency might present a safe alternative payment method.

These are the reasons why Seita Technologies is openly discussing the cryptocurrency option with their customers. "As a Finnish-based payment processing company, we always aim to provide the best and quickest possible payment methods to our customers," according to the?CTO Mikko Laaksonen.?

What are the risks of accepting cryptocurrency payments?

Mikko explains that it would be crucial for any business to enable these payment options to remain risk-aware and implement the correct mitigation controls. Regulations, liquidity concerns, transactions fees, and the company's security posture are just a few of the significant addressable risks for businesses accepting crypto.

If a business decides to accept cryptocurrencies, it needs to have a strong security position and system with a clear understanding of the payment technology. On the other hand, they also need an ethical business attitude to inform and educate the users of their security and payment policies.

Below are some questions that your business should answer before deciding to accept cryptocurrencies as a payment method:

• Do I understand the technology enough? – A general understanding is a must.
• Do I have someone in charge of security within my company?
• Does my corporate location allow cryptocurrency payments?
• ·Where would I provide the services or goods, if I accept cryptocurrency?
• Do I understand the volatility of the market?
• How will I address a financial emergency like a market crash?

Because cryptocurrency is a digital asset with value created through a problem-solving approach on the Internet, it is therefore?Intangible, Illiquid, and Uninsured. It also requires much more care and control. If your business can't protect its "traditional" digital assets, then I would advise thinking twice about accepting crypto …?

Another critical risk for companies is the lack of lucidity on cryptocurrencies' regulatory, financial, tax, and legal aspects. Especially for globally operating businesses, the economic landscape is unpredictable and unstable.

How would your business accept cryptocurrency?

In addition to your point of sale, your business must possess a digital wallet to accept cryptocurrencies. That said, the wallet's security is only one of the main challenges.

Another important question is,?which?cryptocurrency will your business accept?

"The number of cryptocurrencies available as of 19 August 2018 is over?1600 and growing. A new cryptocurrency can be created at any time by practically anyone. By market capitalization, Bitcoin is currently (April 10, 2018) the largest blockchain network, followed by Ethereum, Ripple, Bitcoin Cash, Litecoin, and EOS." Source: Google.

Conversely, because all business is based on trust, your payments are also based on trust. Your company must build trust with your users, all while enabling other payment methods for them. Even though cryptocurrencies are based on blockchain transactions, it does not imply security by default. One major concern is who is performing the transaction, and can you trust that particular person.

When a transaction is made on the blockchain, it is added to a group of transactions, known as a 'block.' Each block of transactions is connected to the previous and afterward block in a chronological, irreversible chain. Each block is stamped with a unique cryptographic code, ensuring records cannot be counterfeited or changed. Source: Nakamo

With the blockchain, you eliminate the possibility that the same digital asset is used in separate transactions at the same time. Even so, you can't remove any uncertainty about who the user is and their legitimacy.

So, do you really need to know who buys your products and/or goods??

It all comes down to the user's identity and determining who owns the cryptocurrencies and can perform the transaction. The latest attacks on wallets have varied from simple credential stealing on hot wallets (online) to physical attacks sometimes on cold wallets (offline).

If your business owns a wallet, you could be targeted with attacks similar to above in addition to tradition cyberattacks. This means that your company and team must be cyber-ready and resilient to establish a proper mitigation plan, and address the new emerging risks by adopting a new technology.

I had the chance to meet the team at?Seita Technologies?during my travel to?Finland, and I have been amazed by their professionalism, knowledge, and support that they provide their customers.

At the end of the meeting, the team came to one conclusion – whether a company enables cryptocurrency payments or not, it is crucial to know enough about the technology and work in collaboration with existing payments providers with the right skills to enable the Future of Payments.?

By Magda Chelly:

Former Chief Security Officer | Author & Keynote Speaker | IFSEC Global Top 20 Cybersecurity Influencer | Entrepreneur | PhD, S-CISO, CISSP, Cert SCI (General Insurance)

Find out on magda-on-cyber.com

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