According to a survey commissioned by Hartford Steam Boiler and Insurance Co. (HSB), an American insurer and a subsidiary of German Munich Re, about one-third of US-based small and medium-sized enterprises (SMEs) accept cryptocurrency as a payment for their goods and services. That’s a pretty high number.
The HSB’s survey was carried out on behalf of HSB by International research firm Zogby Analytics in October 2019. The survey found that 47% of businesses accepting cryptocurrencies have been around for five years or less, compared to 21% of companies older than two decades. This means that ewer companies are twice as likely to accept cryptocurrency payments and trade in digital credits.
The study also found more than half of those companies reportedly purchased cryptocurrency for their own use.
Benefits like lower processing fees and faster payments is what attracts young businesses. On the other hand, they expose themselves to increases cyber fraud and computer attacks. Cyber threats have been a major risk issue in the cryptocurrency sector.
“Cyber criminals follow the money and fraud can be a serious problem,” says Timothy Zeilman, vice president for HSB. “A number of currency exchanges have been hacked or embezzled and millions of dollars were lost. Smaller businesses, especially those starting out, can’t afford to be cheated.”
Smaller businesses are also a target for hackers, who try infiltrate a company’s data system and divert computing power to record and verify cryptocurrency transactions.
And in the case of fraud issues, SMEs are on their own here, as they are subject to little regulation by their state or none at all.
Mr. Zeilman advises all small business owners to learn the ins and outs of the cryptocurrency technology before embracing it. Businesses must have strong data security and insurance solutions in place to protect themselves against cyber fraud and financial loss.
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