6 Reasons Why More Enterprises Are Billing and Invoicing In Crypto
Why are billing and invoicing software platforms and other fintech embracing crypto?
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Fintech companies—especially billing and invoicing vendors —are dipping their toes into cryptocurrencies. Their support makes crypto easier to access and use for regular enterprise transactions like billing clients, or making payroll and expense payouts.
Crypto has seen growing adoption, with a sharp rise in the number of people who own crypto. as reported in Chainalysis' Geography of Cryptocurrency report. The value of crypto transactions jumped more than 300% from 2018-2020, totaling $1.8 trillion in 2020.
Many companies, including fintech payments facilitators, still avoid getting on board with crypto for many reasons. However, they’re becoming aware that they must support their customers' crypto payments needs to stay competitive.
So why are billing and invoicing software platforms and other fintech embracing crypto? Let’s find out!
Crypto is becoming a widely accepted payment method
Blockchain-based currencies are a universal, internet-native, programmable form of cash. Those qualities make crypto an ideal candidate for cheaper and faster cross-border payments - a problem that remains to be solved for our increasingly internet-native economy.
With over $156 trillion in estimated global cross-border payments in 2022 alone, research conducted by Uniswap Labs and Circle estimates that blockchain-based payment rails could reduce remittance costs by as much as 80%. That could translate to savings of about $30 billion annually.
While some businesses may still be hesitant about accepting cryptocurrency, a growing number of large companies are leading the way. Major companies such as Microsoft, AT&T, and Expedia have already begun accepting cryptocurrencies as a form of payment, indicating a growing trend of mainstream adoption globally. One survey by PwC in 2021, found that 84% of companies polled had, or were considering adopting cryptocurrencies for payments, compared to only 14% in 2018.
If you are a business owner and haven't started using crypto invoicing, you should consider offering to accept payments in crypto. New crypto-native enterprise apps enable you to easily invoice clients in crypto.
Stablecoins: crypto without the volatility
One reason holding businesses back from accepting payment in crypto is that most cryptocurrencies are much more volatile than other currencies.
While their higher volatility means the potential for tremendous appreciation in value, the reverse is equally likely. No sensible merchant would be willing to risk their revenues losing value overnight.
However, the use of stablecoins - cryptocurrencies pegged to national currencies - is increasingly popular. They bring all the benefits of blockchain, without the downsides of other types of cryptocurrencies. In 2022, USD-pegged stablecoins circulating on public blockchains have seen explosive growth, with a combined circulating supply of nearly $130 billion as of September 2021 – a more than 500% increase from just a year prior.
As a business owner, cryptocurrencies like stablecoins offer you a new opportunity to do business without borders. For merchants who accept cryptocurrency, it's easy to send funds across borders without incurring exorbitant fees, fraudulent chargebacks, or waiting for bank transfers to process.
You don't have to change your entire business model to accept crypto. Instead, get started by offering a few options that customers can purchase with crypto. It would help if you also had invoice generator software tools such as a crypto invoice generator.
Crypto for brand activation and customer loyalty
Cryptocurrency is a great way to attract the devoted legions that rally around the flags of various crypto communities. If you're a business owner accepting crypto, you must let prospective customers in these communities know about it. Crypto offers an opportunity for merchants to build a loyal customer base by offering discounts or other incentives in exchange for using their preferred payment method.
This can encourage customers to return to your store because they know they can use cryptocurrency as a form of payment. For example, if someone spends $100 on your website and pays with Bitcoin, you can offer them a 10% discount on their next purchase if they use that same cryptocurrency again.
Like how CRM apps like Sales, HubSpot, and Freshsales help you offer seamless customer experience to your clients, crypto-based transactions foster customer loyalty. To boost customer loyalty by leveraging robust CRM features, you can check out reputable app analysis sites or this Daylite review for guidance.
Furthermore, creating an email list of people who purchase with different cryptocurrency types can help you stay in touch with them, build relationships, and increase sales over time.
Crypto can kill chargeback fraud
Cryptocurrency is a great way to protect merchants from chargeback fraud. Chargeback fraud is when a customer purposefully disputes a legitimate payment transaction through the issuing bank or payment processor.
If you're an eCommerce, or online-based service business - this can be a real risk to your bottomline. According tor LexisNexis Risk Solutions’ True Cost of Fraud Study 2022, merchants lose an average of $3.75 for every $1 lost to fraud. This is due to added fees, increased overhead, and other losses associated with chargebacks.
By accepting cryptocurrencies as payment, you can eliminate the risk of fraudulent chargebacks, as they are largely irreversible. Transactions using cryptocurrencies aren't subject to chargebacks. In cryptocurrency transfers, the funds can be held in an escrow smart contract until the satisfactory transaction is confirmed by both parties. Once the transaction is complete, there is no way to reverse it.
Gil Penchina, former angel investor in PayPal had this to say: “For merchants, it is an amazing opportunity. Compared to Paypal, crypto has no credit card fees, no chargebacks, no 'Oops, we decided to hold your cash for 3-12 months while we investigate something we can't disclose.”
Fast, easy, and secure conversion into local currencies
When you buy cryptocurrency, you’ll need to find a place to exchange it for local currency. You can do this at a cryptocurrency exchange—but not all of them are created equal. They can vary significantly by fees, processing times, and market integrity.
If you accept mostly popular stablecoins like USDC, or EURe - you can also create corporate accounts with their issuers like Circle and Monerium. They typically allow you to easily convert your stablecoins to cash deposits into your bank account at a 1:1 exchange rate.
Accounting for crypto transactions
Cryptocurrency is secure and immutable. Because each transaction on a blockchain network is recorded in an unalterable ledger, it makes it possible to easily audit and account for.
The same goes for any other information stored on the blockchain: Once it's there, it's forever. Multiple computers, or nodes, verify each transaction on the blockchain, and no one can change or delete it.
However, the blockchain records each transaction on a public ledger but doesn’t include personally identifiable information (“PII”) about who made that purchase or how much they spent. Your business likely already uses a number of top accounting software systems. But the inherent pseudonymity of crypto payments requires specialized crypto accounting systems that can read and label your transactions across various blockchains.
Some crypto accounting platforms like Cryptoworth are integrated with crypto invoicing tools like Request Finance, further allowing you to simplify how you account for your accounts receivable settled in crypto.
It's time to support crypto and not be left behind
Cryptocurrency invoicing and accounting are potent responses to the current market trends in digital currencies. It’s an innovative way to make invoicing more effortless and secure, and many crypto enthusiasts would also say – anonymous. The companies that provide such services have even more reasons to do so, as they get a lot of benefits.
Integrating crypto payments into traditional billing and invoicing software isn’t that challenging. Both companies and clients can benefit from this process because they will no longer have to maintain multiple fiat accounts. It’s a win-win situation for both parties.
Ivan
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