The Small Business Administration defines a small business as having 500 employees or less of which 28 million businesses in the United States falls into this category. Over half of the employees in the US are within the small business network. The introduction of a virtual peer-to-peer currency such as Bitcoin can provide advantages to small business owners in terms of ease, cost savings and global possibilities, features a guest article by Hermant Taneja on Coin Desk today.
Small business owners can utilize Amazon on which to sell their products and Flextronics is a global company that can provide data assistance and management for smooth e-commerce support. UPS and Fed Ex can provide cost effectiveness in shipping and social media can provide interaction to optimize brand awareness.
The issue that faces small business owners is in the payment processing and cost structure. It can be daunting due to expense and issue of cybersecurity. Target is a recent painful memory of cyber security challenge and immediate need to speed up planned new security systems.
Some of the leading venture capitalists met in San Francisco March 25 for a Coin Summit on how to resolve the infrastructure, cybersecurity and payment issues facing business owners. Meyer “Micky” Malka, founder of Ribbit Capital and Jeremy Liew, a partner at Lightspeed Venture Partners were two of the attendees and panel members.
Jeremy Liew, a partner at Lightspeed Venture Partners states that globally commerce is exchange in cash locally as his native China; or in some countries there a several currencies lists Meyer, ‘Micky’ Malka, a founder of Ribbit Capital. Micky comes from Venezuela where several currencies creates difficulties in transfer of money or payment to business owners
Bitcoin could enable business owners to accept a low cost, easy to transfer payment system. Globally it would have a tremendous affect in global payments to cross the world without geographical border problems of currency.
In the United States the dollar is the currency but in use of credit card payments, small business owners are faced with the merchant fees to enable credit card payment transactions. The cost may be 2-4% of each transaction depending upon the type of card and its level used for payment. A rewards card will cost the small business owner a higher percentage of fees for the transaction than a card without points or cash back benefits. It becomes cumbersome as the merchant fee will be different every month depending upon the different types of card accepted.
Bitcoin offers a low fee that will be a 1% or less range for a business owner to accept a bitcoin payment that is transferred from an exchange holder. Business owners accepting exchange from a Coinbase or BitPay is easy because the money is transferred to your merchant bank account in local currency. There is no long monthly merchant statement with fees for transaction for different credit cards, fees for statement or fees for number of transactions. The bitcoin transaction provides for a one time action and payment.
Andrew Liew states: ‘Just in the same way the developing world has leapfrogged to wireless, I think there’s an opportunity for the developing world to leap over credit cards and go directly to digital currency.’
Hemant Taneja points out in his article that customers need to find a way to address issues in order for it to reach mass adoption. Last year’s problems of theft and bankruptcy taught a lesson that consumers need to hold bitcoin in secure digital wallets, the market must be steady and dependable and since bitcoin does not reverse, entrepreneurs must develop a framework to adjust returns and refunds.
Jeremy Allaire this past week announced Circle Internet will be providing a two-sided platform that allows consumers to safely buy, store and use digital currency and businesses to accept transactions without theft and volatility in price.
San Francisco based merchant service company, Stripe, has announced on Wednesday that it will process bitcoin for global transactions. The empowerment to small business owners to sell at cost efficient fees will increase the transactions and empower small business owners to compete at any level.
To find more articles on Bitcoin view the list below in Author’s suggestions and the video atop this article on IRS ruling to tax Bitcoin as property.
Twitter: Victoria Wagner@victoriaross888