Should my company accept crypto payments?
If you ever read Geoffrey Moore’s seminal piece “Crossing the Chasm“, than you are aware of the stages of product adoption. Feel free to skip ahead if you don’t want a refresher on the topic.
But essentially, Moore argued that after a new technology emerges and is initially embraced by Innovators and Early Adopters, there is this gap before society in general starts to accept this new technology.
So where does that leave us with Bitcoin, Ethereum, Dogecoin or any one of the other 10 million random coins that now exist in the world?
We’ve seen massive investment in digital currencies from a highly speculative point of view. There are die-hard crypto enthusiasts out there and blockchain specialists, smart contract profiteers and pirates too (just look at all the stolen funds and hacks that have been happening since Bitcoin came into existence following the financial crash of 08′.
I’d argue that even if there are millions of average investors that own some of these currencies, we are not yet in a situation where the Early Majority is ready to start spending their digital currencies on physical or digital products or services.
Going back to my original decision tree – you need to be asking yourself as a payment leader a few simple questions. Its worth the exercise in my opinion.
Should my company support crypto purchases?
Which currency or currencies would you consider supporting?
With the volatility in the market, how will you determine the value of your product or service and accurately correlate that to a USD- (fiat) amount? Will you price in BTC or USD ? How will you keep your prices updated to accurately reflect the evolving price of the digital currency?
What is your mechanism for exchanging the digital currency for fiat? aka – you can’t easily pay your rent, buy food, pay your taxes or insurance with digital currency just yet – so you will have to consider how you use this digital currency from a practical standpoint.
Regulatory and Financial impacts – The US Government seems poised to start cracking down on digital currencies. The IRS is now tracking brokerage accounts that deal in digital currencies – there will be tax implications on the funds that your accept that will make tax time more costly as a business.
Fraud & Risk – Are you willing to take on the additional risk that your funds could be stolen by a hacker, stolen by an exchange (aka FTX) or go down substantially in value because Elon Musk tweeted something?
Do you have the expertise to implement and manage this capability? If not, who do you know and trust that can do this for you?
Which of your customers wants or needs this payment capability? Are you losing business because you do not currently support digital currencies as a payment method? I would be weary of adoption, because we haven’t crossed over from Early Adopter to Early Majority just yet…
Until these questions are easily answered – I don’t think it makes sense to invest the time or resources into implementing crypto as a payment method on your company platform.
If I am wrong about this – and I am definitely wrong sometimes, than feel free to shoot me an email and let me know what I am not understanding about crypto.