IT and Business Insights for SMB Solution Providers

Bitcoin Headed for Your Bank Account

It’s far from a mainstream phenomenon, but businesses are slowly starting to pay for goods and services—and accept payment for them—in bitcoin and other cryptocurrencies By James E. Gaskin

IS IT TIME to do more with bitcoin and other cryptocurrencies than watch as their value jumps up or down thousands of dollars overnight—like accept them as payment? Yes, say some, for several reasons, including accounting benefits and evolving client preferences. While we’re just at the start of the B2B bitcoin payments journey, channel pros may want to familiarize themselves with the roadmap.

Overall, bitcoin payments are, "quite nascent, from a business payments standpoint," says Steve Murphy, a director at Mercator Advisory Group. "It remains more of an investment play."

At Manhattan Tech Support, an MSP in New York with an office in Fort Lauderdale, Fla., less than 2% of clients use cryptocurrency, but the firm now accepts it anyway "to keep up with innovation, and to let clients pay however they want," explains Joseph Rabinowitz, co-founder and CTO.

Rabinowitz says customers who want to pay in cryptocurrencies tend to be younger and more comfortable at the leading edge. "They also come to us about other new tech," he notes. Manhattan Tech Support has several active customers seriously considering bitcoin payments now. Those customers must treat bitcoin holdings as a reserve asset on their balance sheet and should consult with their accountants and lawyers to manage it properly.

The ability to accept bitcoin has gotten easier thanks to increasing support from processors such as PayPal and Square, says Rabinowitz. His firm uses Coinbase Pro, a digital asset trading platform. “They took all the difficult components like cryptowallets and exchanges out of it."

There are advantages beyond customer satisfaction to accepting cryptocurrency. "You have full access to payments in seconds,” says Rabinowitz, and as there’s no way to reverse changes to the blockchain, customers can’t easily back out of past payments. In addition, since there's no central authority such as a traditional bank in a bitcoin transaction, lawsuits, liens, and the IRS among others can't attach those assets.

Wild price fluctuations, though a concern to some, don’t bother Rabinowitz. "You mitigate that volatility by converting to U.S. dollars right away," he says. Minutes after a transaction, your government currency of choice, be it dollars, yen, yuan, or something else, will be in your bank account.

While Rabinowitz feels holding cryptocurrency is not any riskier than having money in a traditional bank account, he acknowledges the need for strong cybersecurity processes. Tracking passwords and both public and private keys is critical to cryptocurrency safety.

Still, when customers call for advice about bitcoin, Rabinowitz says, having experiences of his own to reference gives him an edge over less knowledgeable peers. "We want to appeal to the broadest base of customers as we can, and bitcoin helps."

Image: iStock

About the Author

James E. Gaskin's picture

JAMES E. GASKIN is a ChannelPro contributing editor and former reseller based in Dallas.

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