Small business owners are always looking for new ways to attract customers. For many, this means starting a new loyalty program, social media push or online advertising campaign. The possibility of accepting alternative currencies, on the other hand, isn’t exactly top of mind.
While virtual currency has received attention from investors and U.S. regulators, the vast majority of consumers aren’t looking to make purchases in the currency. Recent studies have indicated three-quarters of the population is still unfamiliar with even its most popular representative, Bitcoin.
But, with Bitcoin’s popularity on the rise, some small merchants are finding that accepting the currency can have benefits.
Bitcoin Acceptance As Advertising
The Wall Street Journal recently profiled San Francisco-based small business owner Adam Sah, who earlier this year added Bitcoin as a payment option at three of his Buyer’s Best Friend Wholesale & Mercantile Inc. locations. To spread the word, Sah ordered “Bitcoin Accepted Here” stickers, and then displayed them on store windows.
Sah told the Journal that initial reaction to this advertising was subdued. Only a few customers a week purchased items with the digital money. Recently, however, this has changed. Now, Sah said, at least one customer purchases with Bitcoin each day.
Bitcoin Reduces Stress For Merchants
The Journal indicates that Bitcoin has benefits that make accepting the currency a smart move for Sah and other small merchants. Unlike credit cards, which can charge fees as high as 3 percent, Bitcoin services generally only charge a 1 percent fee on payments made with the currency. In addition, all Bitcoin sales are final, so small business owners could reduce chargebacks by encouraging more spending with virtual currency.
Other merchants have found that there’s an advantage to foregoing physical cash. Aaron Rollins, a cosmetic surgeon from California, told the Journal that he likes Bitcoin because he doesn’t have to count cash, or bring paper currency to the bank.
What About Volatility?
One of the main criticisms launched against Bitcoin has been that the currency is too volatile. The media outlet cited the example of Bitcoin dropping from a value of $266 per unit in April to around $103 this week.
However, the Journal indicates small business owners aren’t holding on to the currency for investment purposes. Rather, due in part to slow acceptance from B2B suppliers, they’re cashing in on it shortly after the sale.
For more on how small business owners are using bitcoin, read the full report here.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More