SMB Payment Processing: Why Small Businesses Are Choosing Stablecoins

The world of small and medium-sized businesses is rapidly evolving and payment processing is no exception. While cryptocurrencies like Bitcoin created excitement for their decentralized structure, they have challenges such as price volatility. Stablecoins, which are digital assets designed to maintain a consistent value and typically pegged to a fiat currency like the US dollar, are changing how SMBs approach payment processing. We think these digital assets provide a practical, efficient, and cost-effective solution for global transactions.

So, why are stablecoins standing out as the preferred option for SMBs compared to other cryptocurrencies like Bitcoin? Let's explore the main reasons behind this trend, consider the challenges businesses face, and look ahead at what the future might hold for stablecoins in payment processing.

Why Stablecoins Appeal to SMBs

When it comes to payments, we know SMBs focus on efficiency, affordability, and reliability. Stablecoins are well-positioned to address these needs.

1. Cost Efficiency

One major issue for SMBs is the high cost of traditional payment processors. Credit card processing fees often range from 2.5% to 4%, and international transfers add conversion fees as well as time delays. Stablecoins remove many intermediaries from the transaction process, designed to significantly lower fees. For example, stablecoins like USDC on efficient blockchains can process transactions at a fraction of a cent, allowing SMBs to save with every payment.

Example

A small e-commerce business selling artisan goods to customers around the world often loses a large part of its profits to payment fees. By switching to stablecoins, these transaction fees decrease, resulting in a healthier bottom line.

2. Fast Transaction Times

SMBs operate in fast-paced markets where time is money. Traditional payment methods, especially international bank transfers, can take days to settle. Stablecoins process payments almost immediately, whether domestically or internationally. Faster access to funds supports better cash flow, which is essential for small businesses.

3. Reduced Volatility

Digital assets like Bitcoin and Ethereum often face unpredictable price fluctuations. Stablecoins are different because their value is tied to a stable asset such as the US dollar. This is designed to make them practical for businesses that want predictable earnings. SMBs can accept stablecoin payments and know the value of those payments will not change unexpectedly.

4. Global Accessibility

Stablecoins allow SMBs to accept payments from anywhere in the world without the hassle of currency conversions or extra steps from financial intermediaries. For small businesses looking to grow globally or serve tech-savvy customers abroad, stablecoins are designed to create a simpler, more accessible payment experience.

Example

A growing tech services business in Europe, working with clients in Latin America and Asia, can receive stablecoin payments to avoid processing delays and extra currency exchange fees.

Tackling the Challenges

Stablecoins offer advantages, but they also come with some challenges. Here's how we think SMBs can address common adoption barriers.

1. Regulatory Concerns

Regulatory requirements for stablecoins can vary by country and region. SMBs must stay informed about legal frameworks where they operate. This includes meeting anti-money laundering and know-your-customer obligations.

Tip: Select platforms or custodial services that meet the highest standards of compliance and offer strong regulatory support tools.

2. Technological Barriers

Stablecoins can make payments easier, but there is still a learning curve. Businesses new to digital assets may have concerns about wallet security and the technical side of integrating stablecoins into existing systems.

Solution: Many payment gateways now offer user-friendly platforms and simple integration, even if you or your team do not have deep technical expertise. We believe collaborating with trusted providers helps make onboarding easier.

3. Customer Adoption

For SMBs to receive the full benefits of stablecoins, customers need to be open to using them. This requires clear education about how stablecoins work and why they provide value.

Suggestion: Consider offering incentives, such as discounts or faster processing, to encourage customers to try stablecoin payments.

Real-World Success Stories

Several SMBs have adopted stablecoins and experienced positive results. These cases highlight how stablecoins can reduce transaction costs and expand customer reach.

The Freelancer Advantage

Independent freelancers and smaller export-driven businesses are using stablecoins to avoid international banking delays and costly transfer fees. Well-known platforms such as Upwork and Deel offer stablecoin payout options, designed to help workers globally to get paid more quickly and efficiently.

E-Commerce Breakthrough

Some online retailers accept stablecoin payments to give their customers a modern and efficient way to pay. Benefits such as lower fees and immediate payment confirmation help these businesses stand out to customers who are comfortable with digital assets.

The Future of Stablecoins in SMB Payments

Looking forward, stablecoins have the potential to become a standard payment method for SMBs. Here are a few key trends to watch:

• Broader Acceptance: As regulatory standards become clearer and more supportive, stablecoins are likely to be available through a larger number of payment platforms, making them more accessible for SMBs.

• Financial Inclusion: Stablecoins can help small businesses in regions with limited banking infrastructure access reliable payments.

• Multi-Stablecoin Support: SMBs may choose to accept more than one stablecoin, each linked to a different fiat currency, to manage operations across multiple markets more effectively.

• Enhanced Ecosystems: The next wave of stablecoin platforms may offer integrated services like earning opportunities and real-time analytics to help SMBs manage their finances and discover new ways to grow their digital assets.

Final Thoughts

Small and medium-sized businesses looking for reliable and cost-effective payment options we believe will continue to embrace stablecoins as the digital economy grows. Stablecoins can help SMBs lower fees, speed up transaction times, and minimize the risks of unpredictable price swings.

Challenges such as regulatory and technical hurdles remain, but advancements in payment technology and greater customer awareness we think will make stablecoins even more attractive in the future. Now is a great time for SMBs to explore how stablecoins can enhance their payment strategies and deliver greater value for customers.

The stability, transparency, and efficiency of stablecoins can give SMBs confidence to take the next step as they grow in today’s fast-moving environment.

Disclaimer: Nothing in this blog is intended to be professional advice, including without limitation, financial, investment, legal or tax advice. Ulys is not responsible for your use of or reliance on any information in this blog as it is provided solely for educational purposes. Purchasing crypto assets carries a high level of risk, including price volatility, regulatory changes, and cyber attacks. On-chain transactions are irreversible once confirmed, and errors may result in permanent loss. Please make sure to do your own research and make decisions based on your unique circumstances. Ulys does not itself provide financial services or engage in regulated activities such as money transmission, custodial services, securities brokerage, or lending. Any licensed financial services (e.g., payment processing, crypto-to-fiat transactions, or lending) are facilitated entirely by third-party providers, who are responsible for obtaining and maintaining the necessary licenses under applicable U.S. federal and state laws. 

Risk Disclosure: Crypto investments come with risks, including the potential loss of funds. Always research before making financial decisions. Ulys does not provide financial, investment, or legal advice.