Blockchain And Cryptocurrencies In B2B Payments

Every year cryptocurrency is becoming more and more popular as a payment method. It was always aimed only at B2C payments, but now it is actively used in the business sphere and is becoming a payment tool in the B2B sector as well. In this article, we will tell you in detail what the benefits and drawbacks of using cryptocurrency in B2B are and how to implement it in your business.

How Does Blockchain Affect B2B Payments?

Blockchain is a digitally distributed ledger that records all cryptocurrency transactions made on the network. It is not owned by a single individual, but is stored on multiple nodes (users' computers). This decentralized system of operation forms blockchain uniqueness and makes it a perfect solution for B2B payments.

Here's exactly what blockchain technology brings to B2B payments:

• Data transparency. As we have already said, blockchain lets you store information on multiple nodes, and in the case of B2B, those are the involved companies’ computers. This way, the data is shared and both parties can see all transaction records, being sure of the payments’ reliability.

• Eliminating costly errors. Blockchain helps to ensure that every transaction is valid and is then recorded in a registry system. It means that there can be no data errors or missing transactions, because no exchange is possible without the parties confirmation.

• Automation. Blockchains are based on smart contracts — specific rules that are executed automatically when terms are met. They optimize payments by eliminating the need for intermediaries. What is more, smart contracts protect each of the involved parties, as they require terms to be executed, without which payments are unavailable.

• Fast and more favorable transactions. Due to the decentralized nature of the blockchain, there are no intermediaries and additional fees. All transactions are confirmed only by the blockchain network, and only one fee is charged, which is the network one.

Pros And Cons Of Cryptocurrencies For B2B

Cryptocurrencies operate on the blockchain, so using them for payments includes all the benefits and problems that blockchain brings to businesses. To better understand the details of the process, we suggest you learn the benefits of crypto in B2B, as well as the challenges the field can face.

Benefits Of Using Cryptocurrencies At B2B

Cryptocurrencies are a convenient solution for B2B payments due to their scale of use, security and favorability. Let's take a closer look at each of the benefits:

1. Global accessibility. Cryptocurrencies are available to companies around the world, and all they need is an Internet connection. It provides an opportunity to expand the customer base and reach new markets, including those that have difficulties accessing traditional banking services.

2. Enhanced security. Confirmed transactions on the blockchain cannot be altered, moreover, they are additionally protected by encryption and cryptography technologies. All these measures, together, protect data and funds from fraudulent activities and hacking.

3. Fast transactions. Thanks to blockchain technology, crypto transactions bypass intermediaries, reducing the time of their fulfillment even in cross-border transfers. This way, crypto transactions take only a few minutes, whereas some traditional ones can take several days.

4. Low transaction costs. Due to the same bypassing of intermediaries in the form of banking systems that charge fees for transactions or currency conversion, cryptocurrency B2B payments significantly save transaction costs.

Drawbacks Of Using Cryptocurrencies At B2B

Despite the fact that crypto B2B payments have great advantages, they also come with some challenges. We tell you about them below:

1. Volatility. Cryptocurrencies tend to fluctuate in price, especially Bitcoin and Ethereum. It can make it difficult to determine the exact value of products and affect profits or costs.

2. Immaturity of the field. The blockchain technology where cryptocurrencies operate is still in its development stages. That is the reason for scalability issues and network congestion, which can delay workflows.

3. Regulatory uncertainty. The crypto market is quite young, so the legal and the regulatory framework governing the sphere is not fully developed. Jurisdictions in many countries lack clear rules on the issue, and this situation creates uncertainty and legal risks for companies making B2B payments.

4. Limited acceptance. Although the number of companies working with cryptocurrencies is growing, due to the digital asset market’s immaturity and lack of clear regulation, they are not accepted by all business areas and corporations. So, this fact limits the opportunities for businesses to use B2B payments.

How To Accept B2B Cryptocurrency Payments?

Although the cryptocurrency market is not as popular and familiar as the traditional fiat currencies and banking systems market, it is actively developing and offers many opportunities for business optimization. If you want to implement such an innovative solution in your B2B payments, you have to learn the regulatory rules of the field in your country. You can read more about which countries cryptocurrencies are legal in or not in our article.

When you make sure that using cryptocurrency for B2B payments is legal in your region, you can start implementing it into your business. To do it, follow the algorithm:

• Step 1: Negotiate with business partners. The first step is to make agreements with your partners or clients with whom B2B payments will be made. Figure out how crypto-processing will work between both of you: decide which digital assets and blockchain networks you will use, and discuss the payment forms (crypto wallets or QR codes). If you have doubts about what coin to use, choose Bitcoin or Ethereum as the most popular cryptocurrencies for B2B payments.

• Step 2: Choose a cryptocurrency payment gateway. Select a provider that has the functionality you need and is also secure to operate. For example, using Cryptomus payment gateway, you’re able to easily generate APIs and integrate various plugins and applications to work. In addition, robust security measures such as AML and 2FA will allow you to interact with the platform with peace of mind.

• Step 3: Create a crypto wallet for your business. Next, you have to create your business wallet to make cryptocurrency B2B payments. After that, proceed to the setup: configure the API, find your wallet address, and other integration elements involved in the payment processing. Double-check all the data and go to the next step.

• Step 4: Prepare for receiving payments. Check that the relevant modules are ready to accept payments. This step involves developing software or interacting with programs that allow you to work with the code or layout of the web page. All the actions to take will be even easier with the Cryptomus business wallet as you only need to share its address with your partners to start receiving crypto. It will take no more than 15 minutes to register and set up, so you can optimize your business processes.

B2B cryptocurrency payments are being increasingly implemented by many companies, because they optimize working processes greatly. Although the market has uncertainties in some countries, we can expect this payment method to become even more popular in the coming years due to the large number of potential benefits.

Do you already have any experience implementing cryptocurrency B2B payments in your business? Share in the comments below, or ask questions if you have.