Many Oil Based Companies Are Now Accepting Bitcoin

 There is also speculation that major retailers could become involved by accepting cryptocurrency payments for gas purchases. BP and Shell have looked into the possibility of accepting cryptocurrency payments in the past but decided to hold off. Cryptocurrencies have already been accepted by some airlines, hotels and service providers as legitimate forms of payment for goods and services as we move toward a cashless society. These companies have partnered with third parties and use complex verification systems that convert cryptocurrency payments into fiat currency acceptable to vendors in the traditional economy. While these processes are highly technical and involve various ledgers and databases, cryptocurrency payment processors are becoming more sophisticated as they become more established. Cryptocurrency payments outperform traditional payment methods such as ACH, wire transfers and credit cards. It is due in part to the inherent security of blockchain ledger transactions, which do not require the storage of sensitive data. Let’s discuss the benefits oil and gas companies can get from accepting bitcoin as a currency.

Pros of Accepting Bitcoin in Oil and Gas Companies:

1. Faster and more manageable payment method for suppliers: Many companies that deal with oil and gas have to deal with a lot of suppliers. It can be time-consuming as they have to maintain different accounts in different banks. In addition, they have to wait for payments, which becomes much easier with bitcoin and other cryptocurrencies. One of the main concerns of oil and gas companies is the price at which they sell their products. With bitcoin, there is no cost involved to accept cryptocurrency payments as it is not a currency. The only costs companies must pay are IT services and other infrastructure, if any. However, it means that prices of oil and gas products could increase as more customers start to use bitcoin to purchase these goods from them.
2. Lower operational risk: For global oil companies, transferring money to their suppliers means many risks. In contrast, with cryptocurrency as a payment method, there is a big difference in operational risk. Cryptocurrency transfers are not subject to foreign exchange risk, so it makes oil and gas companies less risky to take risks. With the fluctuation in the value of currencies and the currency conversion fees imposed by banks, accepting cryptocurrencies like bitcoins helps oil companies save on bank fees. At the same time, they get paid an equivalent amount in their fiat currency.
3. Increased profit margins: Accepting cryptocurrency payments for oil and gas could mean a significant increase in profit margins for oil and gas companies. Using a cryptocurrency payment platform, oil companies get paid faster than they would if they received traditional monies from their suppliers or clients. The cryptocurrency space is growing at a break-neck pace. New products are being launched daily, and cryptocurrencies’ future looks bright. With this growth, accepting cryptocurrency payments will become increasingly commonplace over the next year or two in business transactions across the globe as blockchain technology continues to grow exponentially.
4. Reduce transaction fees: Cryptocurrency payments will give oil companies the advantage of a low-commission structure that does not involve fiat currencies. As a result, it allows small oil and gas companies to cut operational expenses easily. It also ensures they keep more profits rather than pay transaction costs to banks and other financial institutions.
5. Reduces fraud instances: One of the most significant concerns for oil and gas companies is fraud involving employees. With cryptocurrency payments, it becomes much more challenging for employees to pocket any company’s money and manipulate any ledgers involved in the payment process. There is nowhere to hide when everything is recorded on a blockchain ledger. Paying for services and products with cryptocurrency could reduce the time it takes for oil and gas companies to receive their funds. Moreover, a fast payment method can only add to their reputation as efficient businesses.
6. Reduced transaction fees: Currently, oil and gas companies pay a fee to bank branches that handle international transfers every time they make a payment. It usually ranges from 3% to 5% of the total amount involved depending on the country you are making payments. Fortunately, with cryptocurrency, it becomes elementary for them to send international payments as no money is transferred out of their respective countries due to foreign exchange risk. With the current payment methods that oil and gas companies use regularly, they have to have a third party involved to send money across international boundaries. On the other hand, cryptocurrency payments are transferred directly from one person or company to another via blockchain technology. It makes it much safer for oil and gas companies, as they don’t need a financial intermediary to make international payments on their behalf. In addition, people can easily store cryptocurrencies in cold storage wallets without fear of them being stolen by hackers from the company’s private key. Blockchain technology guarantees that each transaction is recorded in an immutable distributed ledger for everyone to see and use safely.

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