Having the latest technology can help a small company stand out against the competition. And that is perhaps the biggest reason Bitcoin, a nascent system using virtual currency to make payments online, has drawn a strong following among small-business owners like Adam Sah.

Co-owner of Buyer's Best Friend Wholesale & Mercantile Inc., a specialty grocery business, Mr. Sah began inviting customers to pay with Bitcoin in late April, figuring he would save money on credit-card processing fees—and maybe help bring in customers who appreciate the novelty of paying for a bar of chocolate or bag of rice with virtual currency.

The 42-year-old former software engineer ordered stickers with the currency's orange and white logo and the phrase, "Bitcoin Accepted Here," and pasted them on the windows of his three stores in the San Francisco area. At first, just a few customers each week would ask to use Bitcoin, but now at least one customer buys items with the digital money every day at each location, he says.

Bitcoin, which is based on a mathematic algorithm, can be bought or sold online. At brick-and-mortar stores, a customer makes a payment via smartphone by scanning a bar code that the merchant provides.

Venture-capital firms in the past year have invested millions in startups that support Bitcoin. But major retailers still aren't accepting the virtual currency—and may not do so for many years, if ever.