Every day, cryptocurrency becomes more popular among consumers and investors. In 2017 alone, the price of a single Bitcoin, the most widely used currency, rose from $996.34 on January 1 to $14,129 on December 31.
Its uses are diverse. Cryptocurrency can be bought, traded, and sold for profit, like shares of a company. It also works like any other currency to purchase goods and services from companies like Overstock.com, Dell, and CheapAir.com.
Even the rental industry is claiming its piece of the crypto pie. For example, the New York-based company Stayawhile, which specializes in furnished rental units for medium-term stays, recently launched Stayabit, an app that allows customers to pay with the currency Ethereum. By bringing this technology into its business practices, Stayawhile hopes to make transactions easier and more secure, thus attracting more international clientele.
Cryptocurrency raises a lot of questions. Is it in a bubble? Will it crash? Will it become a mainstream way of life, like the internet and mobile phone technology? While many communities are sticking with traditional forms of rent payment, it’s important to monitor how cryptocurrency may shape this industry in the foreseeable future. Here are five factors to consider:
Most business owners know that offering more payment options attracts more customers. In your case, allowing renters to pay using Bitcoin or other cryptocurrency may very well be the deciding factor, for some prospects, between signing a lease with your rental community and your competitor.
Security is always a concern when making or accepting payments online. Cryptocurrency changes the way customers enter their sensitive personal information, such as a home address, at the time of payment. Some cryptocurrency wallets, like Coinbase, offer users two-step authentication (password + numerical code sent to a mobile phone) as an added layer of security. That way, when customers log into their Coinbase account to make payments, like rent, the transactions can go through without the customers entering sensitive personal information.
It’s important to remember that because cryptocurrency operates outside government-regulated financial institutions, its fraud protections work differently than those used by most banks.
Without the “third-party” financial institution authorizing transactions, accepting a form of cryptocurrency as payment may mean you pay lower processing fees, than when accepting payments via credit or debit card. It may also mean the the money a tenant sends as payment reaches you faster.
Cryptocurrency transactions still incur fees and take a period of time to be authorized in the database, also referred to as a blockchain. But companies and consumers are finding ways to keep fees and lag time to a minimum.
What do you think about cryptocurrency and its applications in the rental industry? Share your ideas and experiences in the comments!