Since its introduction more than a decade ago, cryptocurrency has been a source of confusion for some and a form of progressive commerce and income investment for others. Now, the method of digital finance is making its way into the world of equipment and event rental.
“We’re always looking for ways to embrace innovation and sync it with our business,” says Brendan Quinlan, co-owner, Big Dawg Party Rentals, Brooklyn, N.Y., who began offering cryptocurrency as a payment option about six months ago. “At this stage, we felt comfortable offering it. I think the cryptocurrency market now is more solidified and here to stay. It’s a $2.5 trillion market cap at this point, and I’ve seen projections that it could be $7-10 trillion by the end of this year.”
Cryptocurrency is a form of currency that is exchanged for goods and services without the need for physical coins or bills. It is a digital, electronic method of payment — with money taking the form of tokens or “coins” — that is exchanged via phone or computer without using an intermediary like a bank. Some of the well-known cryptocurrencies include Bitcoin, Ethereum and Litecoin, and the field of options is continually expanding.
Paying with cryptocurrency has become an attractive option for many due to its detachment from the centralization of banks and even some governmental regulation. People can use cryptocurrency to make payments instantaneously while avoiding transaction fees that banks regularly charge.
Quinlan says that Big Dawg Party Rentals’ implementation of cryptocurrency has opened up new, global-spanning sales opportunities. “We had a local financial tech company who does three or four events a month on average who expressed interest in paying via cryptocurrency, so that piqued our interest. Then we had one or two international clients who do trade shows out of London that expressed interest. We felt that now is the time to jump on that and begin offering it,” he says.
Because cryptocurrencies are different than traditional dollars, potential pitfalls also exist with their use: unlike money deposited in banks, they are not insured by the U.S. government; the values change constantly, even by the hour, making investments in cryptocurrency volatile; and, unlike credit or debit cards, they typically do not come with certain legal protections in the event of disputed transactions or fraud.
Quinlan offers that the key for businesses to avoid certain risks associated with cryptocurrencies lies with using an integrated solution provider for merchants such as the one his company uses to process cryptocurrency payments and manage its usage on the accounting side.
“There are different options out there; we just happened to choose Coinbase Commerce,” he says. “The main reason why we went with Coinbase is because of their process. We use a system that is completely integrated and can generate the tax documents required. Coinbase is a publicly traded company, and I think they have been very slow and methodical to put on cryptocurrencies for trading and all of that. The cryptocurrencies they offer are kind of tried and true. I know there are fly-by-night things, but what we’re accepting are the basic staples that have been around a long time and are very safe.”
Although pros and cons exist with cryptocurrency, it is undeniable that the payment model is gaining traction among rental customers. In light of this growing trend and the potential cost-saving and revenue benefits, Quinlan suggests that rental owners would be wise to consider getting up to speed on what cryptocurrency is and how to implement its use in their businesses.
“I think it’s smart to offer clients another option to pay. We would never want to miss an order because we didn’t accept a certain payment method,” Quinlan says. “Maybe it’s not for everyone, but look at positives of it. We run millions of dollars in credit cards every year. When you pay 2.5 to 3 percent credit card fees, those add up. If you accept cryptocurrency payments and eliminate a portion of these fees, that money can be reinvested into product. Also, you start to look at other expenses with payment methods: Cryptocurrency can eliminate bounced checks, fraud and chargebacks. Some of these are quite prominent in business these days. We hope [using cryptocurrency] will start the process of eliminating all those things. We’re just trying to get ahead of the game. I don’t know if cryptocurrency is totally going to replace anything in the near term, but it’s just a way of opening up your business to an entirely new global customer base.”