About one-third of US-based small and medium-sized enterprises (SMEs) accept cryptocurrency as a payment for their goods and services, according to a survey commissioned by American insurer Hartford Steam Boiler (HSB), a subsidiary of German Munich Re.
Newer Companies Are More Crypto-Friendly
HSB’s survey found that newer companies are twice as likely to accept cryptocurrency payments and trade in digital credits. Specifically, 47% of businesses accepting cryptocurrencies have been around for five years or less, compared to 21% of companies older than two decades.
In general, the study carried out by Zogby Analytics showed that 36% of SMEs are crypto-friendly, and 59% of these companies had previously purchased cryptocurrency for their own use.
HSB vice president Timothy Zeilman argues that businesses enjoy the benefits that come with cryptocurrencies, including faster payments and lower fees. However, there are several risks to consider, especially in terms of cyber fraud and computer attacks. HSB is up to date on the matter since it provides cyber insurance and services. The executive noted:
Cyber criminals follow the money and fraud can be a serious problem. A number of currency exchanges have been hacked or embezzled and millions of dollars were lost. Smaller businesses, especially those starting out, can’t afford to be cheated.
According to Zeilman, cybercriminals use various schemes to break small businesses, including computer attacks, malware infections, and phishing techniques.
Given that cryptocurrency exchanges operate in parallel with the banking system without interfering with it, they are prone to little regulation. Thus, in the case of fraud issues, SMEs have to act on their own.
Zeilman recommended:
Small business owners should learn all they can about the technology before accepting cryptocurrency. And make sure they have strong data security and insurance to protect against cyber fraud and financial loss.
About the Study
The survey was commissioned by HSB and carried out by Zogby Analytics in October of last year. It involved 509 SMEs across the US.
75% of the surveyed businesses had annual revenue under $5 million and less than 100 workers. The final sample comprised 41% of the enterprises with fewer than 25 employees. Zogby claims a confidence level of 95% and a margin for error of plus or minus 4.4%.
Interestingly, a survey carried out by analytics firm Harris Insights and crypto startup Gem found out that half of US citizens were inclined to buy Bitcoin, demonstrating how popular cryptocurrency was in the country.
Do you think crypto payments will become the new norm? Share your thoughts in the comments section!
Image via Shutterstock