5 Reasons Merchants Should Start Accepting Bitcoin NowCoinbase's Adam White lays out the bottom-line benefits of embracing Bitcoin payments.

An estimated 80,000 businesses already accept Bitcoin today, and not just as amarketing gimmick. Why not yours?

Forward-thinking merchants of all sizes around the world are glomming onto the hot Bitcoin payments trend, many of them to cut costs and boost their bottom line, says Adam White, director of business development and strategy atCoinbase.

The 1.6 million-customer San Francisco Bitcoin exchange and wallet service processes Bitcoin payments for some 36,000 companies and growing. Among them are Overstock.com, OkCupid, 1-800-Flowers,DISH Network, and several other big-name early cryptocash adopters.

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If you're still sketched out about doing business in Bitcoin -- or you got cold feet on the heels of the U.S. Consumer Financial Protection Bureau's recentadvisory warningon the topic -- White recommends you reconsider.

Here are his top five reasons merchants should start accepting the virtual currency now:

1. Lower transaction fees.Per transaction fees for accepting Bitcoin are generally significantly lower than those charged for credit and debit card purchases. White says this is the biggest reason smaller merchants are latching onto Bitcoin payments.

"Small businesses, on average are paying higher credit card fees than Walmart is, and Best Buy," White says. "These are large, enterprise level businesses that have scale and therefore they can negotiate lower credit card transaction fees. Small mom-and-pop shops can't."

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He says most smaller merchants pay 2 to 4 percent per credit card transaction, often with additional "hidden fees" heaped on that quickly add up.

Bitcoin, on the other hand, can reduce their credit card processing fees to less than 1 percent, White's colleague Nicholas Tomaino, a business development manager at Coinbase,recently toldEntrepreneur.com. Accepting the virtual currency can save them from sacrificing between 3 and 5 percent of their revenues to credit and debit card fees, Tomaino estimates.

White points out that Coinbase charges a 1 percent flat per-transaction fee to convert Bitcoin payments to your local currency, after your first $1,000,000 USD in merchant processing. Unlike a lot of credit card companies, it doesn't charge account setup or termination fees. So, if your customer pays for a purchase that costs $1, Coinbase will only charge you one penny for payment processing.

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Bitcoin Payment processor BitPay charges no per transaction fees, but its customers pay monthly fees for its services, ranging from $30 to $300.

2. Fraud prevention.Because people can pay businesses in Bitcoin without divulging personally identifiable information (names, billing addresses, etc.), they enjoy a level of identity-theft protection that credit cards simply can't offer, White says.

"With Bitcoin, there is no personal identity attached to that form of value. It's a lot like digital cash, and there's no way it can be intercepted, and my identity can't be disclosed. That prevents a lot of issues like we saw with the Target data breach and the recentUPS Storebreach."

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It's important to note, though, that Bitcoin exchanges that operate in the U.S., including Coinbase, collect personal identifying information from their users -- names, addresses and applicable bank account numbers included -- in order to establish their Bitcoin wallets. They have to in accordance with certain state and federal regulations.

3. No chargebacks.Bitcoin purchases are final, so there are no chargebacks and no returns, like those rife in credit card dealings, yet another way transacting in the virtual currency saves merchants money.

Credit card chargebacks occur when a card user disputes a purchase made with his or her card, often because of defective goods or items never received. Or, perhaps he or she fell victim to identity theft and never authorized the purchase in question in the first place.

When a chargeback happens, not only does the credit card company withdraw the money for a transaction from your merchant account and deposit it back into the customer's, you typically also get slapped with a costly chargeback fee. These can put you back between $5 and $15 each, according toCardFellow.com.

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As it is now, people who purchase from you in Bitcoin generally have no recourse in a dispute. Transactions in the cryptocurrency are basically perceived as cash. They're final, insulating merchants from the possibility of chargebacks and the fees associated with them. As Bitcoin Foundation member Kevin Randputs it, "Bitcoin puts all the power in the merchants hands."

4. The ability to get paid quickly.Having cash on hand is often critical to survival for small businesses. Accepting Bitcoin payments can put cash within your reach faster than it does when you accept credit card payments.

"The problem is, with credit cards, a lot of times your funds can be locked up for a week or more and there held in a sort of escrow in case someone requests a chargeback," says White.

That's generally not the case with Bitcoin. For example, at Coinbase, payouts arrive in merchant's bank accounts typically in only two business days.

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Every payment settles "at the moment of transaction," White says. "So when a customer pays in Bitcoin, the merchant receives it and immediately sells it to Coinbase to convert it to U.S. dollars. At that time, they're guaranteed their money."

5. Ease of accepting international payments.Small online retailers and independent consultants often don't sell their wares and services internationally because of expensive cross-border transaction fees. Bitcoin relieves the steep cost of going global, making cross-border payments easier, faster and cheaper.

"Bitcoin breaks down all of these invisible borders that previously existed," says White. "When you accept Bitcoin, you can accept payment from anyone anywhere in the world at the speed of an email."

Another benefit: The digital currency's lower transaction fees could save retailers who operate internationally up to 8 percent, Wedbush analyst Gil Luria recently toldThe New York Times.

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