(NewsNation) — Cryptocurrency has continued to become more mainstream, leading business owners and customers to ask themselves: Should we use this tool?
One in five Americans owns cryptocurrency, according to the National Cryptocurrency Association.
However, 63% of Americans say they have little to no confidence in the reliability and safety of cryptocurrency for investing and trading, according to a Pew Research Center poll.
When weighing the risks and benefits of using cryptocurrency for payments, here’s what some people should take into account:
Risks of cryptocurrency as payment
The U.S. Chamber of Commerce says that once a cryptocurrency payment is completed, it is permanent.
Transactions can be refunded only by the party receiving the funds,” writes Inc.com. “Businesses that accept Bitcoin should be prepared for the possibility of customers requesting refunds, and keep track of how much money each customer has paid.”
Where things get complicated is that this process can lead to inefficiency in business operations and additional work for employees.
Cryptocurrency can also be risky due to how it’s deemed property for tax purposes by the Internal Revenue Service. This can add another complication for businesses that manage many transactions daily.
Benefits of cryptocurrency as payment
The irreversibility of cryptocurrency provides business owners with an easier method to manage their cash flow.
Business owners don’t have to deal with chargebacks. And, if someone needs to be refunded, the business is required to pay them back manually, meaning owners are forced to keep immaculate records.
“Regulation for crypto assets has been under consideration for some time, but there was a heightened sense of urgency after a series of bank collapses that were tied to crypto asset activities,” says the World Economic Forum.
Using cryptocurrency can also help business owners avoid international currency payment fees.
“Cryptocurrencies aren’t tied to a country of origin or national bank,” said the U.S. Chamber of Commerce. “As a result, businesses don’t wait for payments to clear a foreign bank or pay the costs.”
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