The Risks of Accepting Cryptocurrency at Your Small Business

Bitcoin, ethereum and ripple coins stacked next to a SIM card

How many bitcoins does a cup of coffee cost? This could soon be a common question, thanks to Starbucks preparing to launch a new cryptocurrency platform for its products. This is good news for bitcoin, which has lost more than half of its value since peaking at the end of last year, but does it mean your small business should dive into the crypto craze too? Not so fast — let’s take a closer look at some of the risks.

Limited Regulations

Cryptocurrency is still largely the Wild West of payment processing. While many financial institutions are keeping a finger on the pulse, there are virtually no attempts to regulate it, even by the Federal Reserve.

While the lack of regulations in their traditional sense is the reason why so many people got attracted to cryptocurrency in the first place, it may not be to every merchant’s taste. Since the currency is decentralized, with no banks to back up transactions, there’s always a risk of loss involved. If you want greater reliability, working with a payment processor on traditional in-store, online or mobile credit card processing is still your best bet today.

Potential Fraud

If you’re still set on expanding your payment portfolio to include cryptocurrency, then you’ll need a digital wallet that can be kept on the server or offline. While the latter method is slightly more secure, neither one is completely foolproof.

Since you need an encryption key to access your digital wallet, how you store that key becomes a dilemma in itself. If you keep it with you and lose it, you won’t be able to recover funds on that particular wallet. On the other hand, if you choose to designate a qualified payment processor with the task of storing your key, remember that they too can become a victim of a cyberattack. Unfortunately, most of the processors that deal with cryptocurrency can’t guarantee that any loss of those funds will be reimbursed.


Even with the dark cloud of fraud hanging over cryptocurrency, there’s still some silver lining for your small business — greater protection from chargebacks. Since banks aren't involved in crypto transactions, there’s nobody to force a refund except you. While this is a great perk, it should be handled responsibly, since offering a refund for a clearly inadequate product or service is not only the right thing to do but can also prevent you from developing a bad rep among both current and future clients.

As you can see, even the biggest financial institutions are still cautious in their approach to cryptocurrency. There are a number of pros and cons to weigh, but before you do that, make sure your small business is capable of supporting all the traditional payment processing methods first.

Explore Payment Processing Options For Your Small Business