Risks Associated with Accepting Cryptocurrency Payments

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Risks Associated with Accepting Cryptocurrency Payments

The world is transitioning to cryptocurrency payment options swiftly as they try to evade all the perks of transacting in traditional finance. Since its inception, crypto has become highly popular among specific tech-savvy demographics, but it also comes with some risks in operating at the cutting edge of financial technology.

Before accepting cryptocurrency payments, you have to know some of the risks involved – both technological and realistic. They include high volatility, security risks, uncertainty over-regulation, the irreversibility nature of crypto, etc.

Digital Assets Can be Extremely Volatile

Making payments in cryptocurrencies can be daunting and overwhelming because of the market’s high volatility. Volatility in crypto describes how much a digital asset’s price has increased or decreased over time. 

Furthermore, crypto markets are highly volatile, and prices can move extremely fast in a short period. For example, the price of Bitcoin dropped 99% in June 2011, 56% in August 2012, 83% in April 2013, 84% in Dec 2018, and more. Even as it hit its all-time high of over $68,000 in November last year, it dropped below $35,000 by January.

It clearly shows how dicey it can get when you want to make payments in crypto. Either way, the riskier a cryptocurrency’s volatility can get, the more potential it has to offer higher returns or losses over short periods than comparatively less volatile assets.

However, to some, crypto’s high volatility is part of an appeal because it creates the possibility for high returns if the market moves in its favor. But if it does not, then any assets they receive as payments might potentially decrease in value.

Security Risks Involved with Crypto

As the crypto ecosystem grows and becomes more widely used, it becomes easier for hackers to utilize various methods to steal away users’ crypto and sensitive information.

It is not safe to make payments in crypto because users’ funds are susceptible to theft.

There are several ways you can lose your digital assets when accepting payments in crypto. For example, you can lose assets when accepting payments using an illegitimate cryptocurrency trading platform. Many trading platforms are emerging at a higher rate as crypto continues to evolve, but not all are legitimate.

A good example is One Coin which attracted users by promising significant returns. Nevertheless, what people thought was a reputable crypto company ended up being a scam. The company turned out to be a multi-level marketing scam that cost people a lot of money. On that note, it is better to use a respectable crypto company when accepting cryptocurrency payments to avoid losing funds.

On the other hand, there’s a risk of storing private keys on computers because hackers can access your computer and use your private key to log in to your digital account.

Moreover, it’s difficult to regain access to your private key once a hacker steals it. That’s why it is vital to keep your private keys out of the hands of hackers, especially when accepting payments in crypto.

Barriers in Terms of Technology

Accepting payments in crypto can be challenging, especially for newbies in the network. Accepting crypto involves developing a digital wallet on a cryptocurrency platform, which can be technically challenging for a novice merchant with zero knowledge about the software.

The crypto ecosystem can be a highly information-dense environment with a steep learning curve, which can pose a challenging task to navigate when accepting payments.

On the other hand, regardless of technological barriers in the crypto realm, when accepting payments in crypto, the uncertainty of crypto values deters entrepreneurs from trading in digital assets.

Before accepting any payments in crypto, you should do extensive research and find a platform that can enable you to accept payments in any currency and support a range of fiat currencies.

Uncertainty Over Regulation

Accepting payments in crypto can also be challenging, mainly because its legal environment is likely to shift in the foreseeable future. Crypto regulators worldwide are fighting continuously and drafting rules regulating the network. It will immediately change the network after being in effect, requiring merchants to remain adaptable.

If you are willing to accept crypto payments, you must adjust and respond to legal developments as a consequence.

For example, a report from during the Bitcoin 2022 conference revealed that based on a survey of 3,000 businesses across ten countries, primarily online marketplaces, believe that regulatory uncertainty would endure as the creation of national legal frameworks for regulating crypto has been relatively slow and uneven.

Furthermore, President Biden initiated an executive order in March which directed regulatory agencies to report on digital assets and consider new regulations. 

Payments in Crypto are Irreversible

When transacting in crypto, it is impossible to reverse the funds. However, funds can be refunded only by the party receiving the funds. On that note, when accepting payments in cryptocurrencies, you should be prepared for the possibility of the other party requesting refunds.

Nevertheless, aside from not receiving refunds, it can help you better manage your cash flows because you get free from chargebacks. In case of any refund, you have to manually initiate it, which forces you to keep immaculate records.

So, accepting payments in crypto can be daunting, especially when you need refunds and the other party fails to concur; you might lose all your funds and not get them back.


As the world is quickly transitioning to crypto payment options, merchants need to know that there are alarming risks to consider before accepting crypto payments. However, if your business requires crypto as a payment option, it makes perfect sense to weigh the costs and benefits of doing so.

Because accepting payments in crypto falls entirely outside the infrastructure of the traditional payments industry, it frees you from having to deal with any of the negative aspects of that system, such as processing fees, credit card fraud, and chargebacks.

On the other hand, transacting with digital assets also comes with its own unique set of costs and hazards. Indulging in crypto unprepared could leave you caught off-guard by losses and expenses from scenarios you have never had to deal with before.

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