Why Small Businesses Don’t Want to Accept Cryptocurrency and What You Can Do About It

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This is a guest post by Bonpay, a cryptocurrency payments processor and a Bitcoin debit card provider (cards currently on hold). All views expressed belong to the author of the post.

Crypto enthusiasts continue to persuade the world that cryptocurrency is accepted in more and more places and will replace cash by 2030. They draw graphs, show stats, quote crypto evangelists and continuously attempt to prove that crypto with no doubt will be the winner in the end. However, when it comes to adoption, the real world is downright brutal.

Currently, only around 12 000 venues accept Bitcoin with annual growth being about 1000. In comparison, just in the US, there are 28 millions of registered small businesses, and 550 000 new businesses are registered each month, according to Entrepreneur. Granted, a portion of them churns out, but more than a half survive for three years or more.

This statistic means that businesses should start adopting crypto thousands of times faster to merely keep up. Except, there is no way it will happen any time soon. Business owners have legitimate issues with cryptocurrencies and unless the crypto-community works to solve them — nothing will change.

Why we need small businesses to accept crypto?

There is a critical difference between a currency and a commodity — a direct buying power. Direct buying power proves the status of the currency and makes it more useful in the eyes of the general public, which in turn leads to the broader adoption.

However, cryptocurrency does not have a direct buying power. For example, I can buy a cheeseburger for $5, but I can’t buy a burger for Bitcoin at all. The lack of a direct buying power makes crypto not a currency, but a commodity. I’d go as far as calling crypto in its current state “the XXI century Beanie Babies.”

The easiest way to create this proof of value would be to have someone like Amazon in our corner. Except, this isn’t happening — after a honeymoon period, many tech giants are pulling out of the crypto entirely (Microsoft, Stripe, Steam, Reddit). And it will be rather hard to sway them back.

However, swaying small companies is less complicated. You do not have to convince a dozen of detached board members; you have to convince one person. Moreover, once a critical mass of small businesses supports crypto, the larger enterprises will have to rethink their stance.

Why do small businesses refuse to adopt crypto?

There are many issues for cryptocurrency adoption in different countries and cultures — starting from legal and ending with ideological. If I were to explain each of them, I’d need to write a book. However, two issues are global and equally relatable for every entrepreneur that is interested in cryptocurrencies: lack of incentive and lack of stability.

There is also a problem that I call “the lack of a workaround.” After all, it’s not exactly easy to integrate Bitcoin with all of its drawbacks into the economy of a small business. For example, you can’t transfer BTC to USD without jumping through a couple of hoops. However, I’d argue, that any workaround — even the cryptocurrency card we are currently developing — is not as important as a solution to the other two issues.

Lack of incentive

According to Cambridge University, only 3 000 000 people hold cryptocurrencies. The study doesn’t mention how many of them are business owners, but let’s be generous and say 1% of them are. In general population, it is much, much less, around 0.33% (Entrepreneur).

This data puts us at a maximum of 30 000 businesses worldwide that may accept crypto. The amount of business owners who are willing to put up with the hassle of doing so is even less, because most Bitcoin users, ironically, are unwilling to use Bitcoin.

As an example, let’s imagine Monica, a cafe owner. She is aware of crypto and holds some BTC, yet she is not even thinking about accepting payments in it. Why? Nobody wants to be that guy that paid 10 000 BTC for a pizza! So people hold (or HODL) their Bitcoins until the Second Coming and refuse to sell unless they have an emergency — and craving for a frappuccino does not count.

Lack of stability

Businesses live and die on the turnover. Money must come and go fast — or, at the very least, in a predictable manner. However, Bitcoin transactions take an unpredictable amount of time — if the network is “empty” right now, it may confirm a transaction in two minutes, but other times, I have to wait for hours. Fees also go up and down chaotically, becoming even more of a mess as we go on. Also there’s volatility, which is a problem in and of itself.

Even a lot of large enterprises were not ready for this issue. Reddit, for example, no longer accepts payments in cryptocurrencies. Microsoft and Steam also exited the second they realized what was going on. There are many different reasons cited for the cancellations, but it all comes back to the lack of stability — or, at the very least, predictability.

Take note, that those are enterprises — companies that count annual turnover in billions. The money lost due to the crypto volatility is a miserable fraction of their profit, yet they aren’t willing to lose even this fraction. However, for small businesses — like Monica’s cafe — even $1000 in the annual turnover may become a matter of life and death.


Both of those issues are connected, and once combined, they do not look good. In fact, they make cryptocurrency look similar to stocks. Yes, there are fundamental differences between the two, but going off the general public’s perception, they are almost identical. Both are highly volatile, have an abstract value and are never used for direct purchases.

The problem is, this is not what crypto was supposed to be about. Satoshi Nakamoto and Hal Finney had a dream of a free currency that would make the world a better place. Instead, crypto turned into a market where people with disposable income are betting their money against the conglomerate of whales. The foundations of that old system are still there, but they go mostly unused.

There will be solutions for the technical issues, that much is clear. For example, The Lightning Network is almost ready to fix the lengthy and costly payment processing. However, this does not solve the underlying problem.

How to help small businesses to accept crypto?

We can accept that the cryptocurrency as a concept has changed, and the widespread adoption of it as a currency is not a goal anymore and crypto should just become a variation of the stock market. Except, I fail to see any potential growth of this market — only stagnation, followed by a slow and painful death. Once again, see the Beanie Babies.

Another option is to start treating crypto as a currency again, to start buying things. The number of crypto users grows each day, and even now they have a pretty significant buying power — it’s just that they do not use it. However, if they will — they will provide both awareness and incentive that is currently lacking.

Let’s get back to Monica, a cafe owner. The one that knows about crypto, yet refuses to implement it in her business. Now, if she had a single customer willing to pay in Bitcoin, she still wouldn’t do this. On the other hand, having a dozen regulars willing to spend their crypto might sway her. Then the other visitors of her cafe will see that Bitcoin has buying power and would become interested in it. Through them, the market will grow and become harder to destabilize.

Of course, this is a perfect situation and is not possible everywhere. But in the larger cities, we can create enough incentive to make an initial push and start from that. And while this doesn’t have quite the same ring as “TO THE MOON!” or “Lamborghini for everyone!”, it does promise a better future for the whole community.


  1. Dwight says

    “… business that processes $10,000 a month with an average ticket of $50 will pay about 2.80% of volume or $280 a month in credit card processing charges.”
    Assuming a ~ 20% markup on goods pre sale on a $50 item, which is purchased about~$40.00
    Gross Profit would roughly be $7.00
    Subtract Overhead of 35-40%
    And our new business owners are netting
    about $5.00 per item… pre income tax.
    So lets say.. Every sale is net net…$3.50…4.00?
    Half of which is then spent back on the business.
    No wonder buisness fail in our “Free Market”

    1. Damian says

      That actually depends on the what goods you are selling. For example, if you are dealing in higher-end electronics or jewelry, you can set higher markups. And then there are hand-made goods, which are expensive by default. The food industry can have insane markups too. The rest are generally surviving on the volume.

      The businesses that are failing are the ones that refuse to adapt. If you are trying to compete with Amazon or Starbucks, but can’t offer anything to distinguish your business – that’s on you. Rethink your business strategy – start curating your goods, offer additional services, introduce new flavors or features that the larger chain doesn’t have. Make your experience more engaging and interesting for the customers and win them over like this.

  2. Max says

    the taxes get very complicated. you have to settle everything in USD — in my opinion this is the biggest barrier to crypto, especially legally. i’m confident the technology will continue to develop, but will the laws?

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