There’s nothing quite as satisfying as a hot, fresh, cheesy pizza delivered straight from the pizza shop to your door. The convenience and immediate gratification are unmatched. But for small businesses (like your favorite local pizza shop), sending and receiving money is far less straightforward. Costly fees and slow processing times can sour the appetite.
But what if money was as convenient as pizza?
Small businesses, including your local pizzeria, make up 44% of the U.S. GDP. Despite their significant contribution, they often face tough financial challenges. Nearly 50% of new businesses fail within the first five years, and a staggering 82% of these failures are due to cash flow problems. In short, it’s hard to keep enough money on hand.
Receiving payments is an important part of cash flow. When a small business makes a sale through their website, a working process is put into action. The order is registered, the product is packed, shipped out, and the transaction is complete. Except for money in the accounts of the small business. Even though the customer has paid, the money is still traveling or being held by middleman companies or processes. The payment might take one to three days (or sometimes longer) to hit the business owner’s account. And when it finally does, fees will have taken around 2.5% out of the revenue.
That might not seem too significant, but ‘swipe fees’ can add up to become most merchant’s second highest operating cost after labor. In 2022, U.S. merchants paid a whopping $126.4 billion in credit card processing fees. These fees either eat into the business owners’ profits or lead to higher prices for consumers. While large corporations can afford or negotiate these fees, it’s much harder for small businesses.
According to the Federal Reserve’s 2024 Diary of Consumer Payment Choice, the average share of payments made in cash has decreased from 31% to 15% since 2016. As our society moves towards a cashless system, small business owners face increasingly frequent fees. The convenience currently comes at a high cost because there’s only one game in town.
Cryptocurrencies, on the other hand, may provide an alternative path. They could modernize our financial systems to meet today’s needs, offering a way to exchange funds that eliminates many middlemen. While credit card payments pass through networks, issuers, and gateways, crypto payments are sent on a decentralized exchange. This means transactions occur directly between crypto traders, eliminating the need for intermediaries like banks or brokers to officiate. Payments are essentially delivered directly from one account to another, just as quickly as sending a text. And fewer middlemen mean fewer fees.
Just like you can text a friend on the other side of the world in an instant, crypto may allow small businesses to operate globally, just like larger corporations. These transactions aren’t bound by borders, so small businesses get faster access to funds and more cash on hand, no matter where the money is sent. With traditional finance, a small business seeking international customers would need the funds to navigate tariffs and currency exchanges. But adopting crypto could mean international trade without those hurdles. In fact, a recent study stated that 85% of merchants surveyed see crypto payments as a way to reach new customers. It certainly helped reach Laszlo Hanyecz, who was the first person to use bitcoin in a commercial transaction when he purchased two pizzas for 10,000 btc in 2010. A roughly $41 transaction then, which would now be worth around $68,000 today.
While managing money might never be as crowd-pleasing as ordering a pizza, crypto could provide ways to make it way more satisfying, straightforward, and cost-effective. And that sounds pretty delicious.