In today’s digital economy, cryptocurrencies are ever-evolving. Every week or two, we hear news of a new currency which has entered the market and investors start to bid and invest, hoping to gain a return. However, one crypto which, for the first time, is making headway in the cryptocurrency market is Ethereum.
Ethereum is a decentralized software platform which is powered by blockchain. It can be used by anyone to create any form of secure digital technology. Whilst it was designed as a token for people to use when paying for work that has been done, it can now also be used to pay for services and tangible goods, where accepted.
It is largely due to this that businesses are beginning to consider accepting Ethereum as a type of payment. Let’s take a look at some of the reasons why some businesses are beginning to accept Ethereum as a payment method and what this could mean for your business in the future.
What Are The Benefits Of Ethereum Payments?
Businesses that choose to integrate Ethereum payments, either along with other payment systems or as the sole payment method, can benefit from a number of advantages.
Reduced transaction fees
Compared to other payment methods, Ethereum provides a significant advantage in terms of cost for businesses, compared to traditional methods such as credit cards. Typically credit card payments incur fees ranging from 1.5% to 3.5% whereas, in contrast, Ethereum’s use of decentralized blockchain technology means that a flat fee is charged instead, which averages $1-2 per exchange or transaction.
This difference is particularly noticeable for bigger businesses or companies, which process higher volumes of transactions. Some businesses, for example, can process $1 million in payments each month which means that, if customers used a credit card, they would incur exceptionally large fees upwards of $35,000.
If the same volume of transactions is done through Ethereum, then with an average transaction fee of $1, then this would amount to just $1000 – a considerable saving. As well as this reduction in transaction fee, investors can also benefit from safer transaction protection. Fraud recovery experts have said that investing using cryptocurrencies can often be safer than using credit cards, which is good news for customers who may be looking to make bigger purchases.
Reach New Customers
By accepting Ethereum, you are opening your business up to a new base of customers – ones who are fast adopters of the new digital economy. There are currently over 1 million people using Ethereum wallets that are making active transactions, so by expanding your business into accepting Ethereum, you can then tap into this new customer base.
Companies should look to position themselves to capture the growing market share of crypto-related retail and pioneer themselves in a way which can be seamlessly integrated.
Enhanced Data Security
As Ethereum is a decentralized platform, it uses something known as advanced cryptography which then makes it a more secure option for both businesses and customers when processing payments. Compared to conventional systems, Ethereum operates on a global network, without a central point of control. This then reduces the risk of system-wide failures.
Every transaction made on the network is encrypted and it is linked to previous transactions – this then creates a transparent record of all payment activities also known as a blockchain ledger. Investment fraud attorneys will attest that this security measure is one of the best ways to keep both businesses and customers or clients safe and protected.