Big Players Are In — But What Do SMEs Think Of Crypto?
Businesses all over the world are beginning to adopt crypto. Big companies such as Facebook, Microsoft, Samsung, and Microstrategy have already made big plays or talked up the underlying blockchain technology. Bitcoin’s growing acceptance among these institutions has boosted the public’s confidence in cryptocurrencies as an asset class. As a result, small and medium scale enterprises (SMEs) are starting to look to take a seat at the table, according to a new study by The Strawhecker Group.
Payment gateways to ease money transfers, decentralized storage for data security, and smart contracts could help streamline business models adopted by SMEs.
Bitcoin Adoption On The rise
According to the study, which looked at over 600 businesses in 2021, less than one in ten had adopted cryptocurrency as a means of payment. However, just over a third of businesses reported taking crypto payments in 2021, which the study claims “signals a potential future wave of acceptance”.
Up to 49% said the reasons for their growing interest were due to a desire to keep up with consumer demand, reductions in fraud, the current popularity of Bitcoin, and lower transaction fees. Increased knowledge about crypto, as well as growing ownership by business owners, was also said to have helped crypto adoption. Of business owners who use cryptocurrency in their businesses, 92% said that they owned some — whereas 17% of business owners who do not accept it did say they owned some digital assets.
Among most SMEs who do not use cryptocurrency, 20% have a favorable disposition towards future adoption, 26% are unsure, while 54% are unlikely to accept it. The reasons for this unlikelihood are: inadequate knowledge about payment methods (71%), unsure if they could figure out how to accept it (66%), doubt it would increase their sales (58%), and worried about too much risk (43%).
The research highlighted a clear divide on the issue of safety. SMEs that adopt cryptocurrencies felt it was a safer payment method than other traditional methods, and those who haven’t adopted it felt otherwise. Meanwhile, Bitcoin (93%) is the most popular cryptocurrency used for payments, with Ethereum (61%) and Bitcoin cash (51%) rounding up the top three.
SMEs Growing Importance
Globally, SMEs constitute the backbone of many countries’ economies. Their function is critical to worldwide economic and social growth, with more than half of the world’s population being employed by them. In the US alone, over 30 million SMEs account for two-thirds of all employment opportunities over the last ten years.
The importance of these SMEs is quite profound; they champion inclusion, create job opportunities, and ensure the growth of economies.
While cryptocurrency adoption in SMEs would be a welcome development, it must be done with the utmost care. Despite the numerous opportunities it provides, Bitcoin is still in its developmental stage and has potential risks that SMEs must prepare against. For the time being, SMEs can keep an eye on the space and be prepared for the potential cryptocurrency has for being adopted more widely by business merchants as a means of payment.
Do you think SMEs should adopt cryptocurrencies right now, or bide their time? Let us know in the comment section below.