With the popularity of bitcoin and other digital currencies on the rise, it would be no surprise to see more and more businesses willing to accept bitcoin as payment. Soon, people from all over the world could be using cryptocurrency to buy anything – from food, houses, to even paying college tuition fees. The future certainly looks bright for the finance industry.
Despite the growing trend though, there are some companies that are still hesitant to take that leap. This is especially true for small or solo entrepreneurs.
Hopefully, this simple guide can steer you in the right direction. Read on and see how quick and easy it is to begin accepting bitcoins for your store – whether you’re a small cafe or a booming startup.
But before that…
Why Accept Bitcoins In The First Place?
If you already have a store set up, you might be wondering WHY you should even give cryptocurrencies a try. After all, isn’t cash or cards good enough? That may be so, but there are a good number of reasons to accept bitcoin payments today:
Get the ability to sell anywhere. Dealing with cash, checks, or credit cards sometimes binds merchants in fiat currency laws and regulations. There might be countries you can’t sell to or may have trouble dealing with. If you intend to widen your customer base, this could pose problems.
Bitcoin eliminates this issue by giving merchants the freedom to sell and receive payments anywhere around the globe.
Zero to low fees. Accepting cards often include significant fees, sometimes up to 3 percent or more! But accepting bitcoin – even through payment service providers – is cheaper. Often, they will simply charge a flat fee of 1 percent (sometimes lower). If you want to receive bitcoins directly to your wallet, you could even get zero fees!
Not dependent on third parties. If you have a web store, you usually need third party apps or services to begin accepting payments. But with bitcoin, that’s not necessary. Depending on how you want to receive digital currencies, you can choose to either go through payment service providers, or not at all.
No chargebacks! Perhaps one of the best things about accepting bitcoin payments is the assurance of NO chargebacks and less fraud. Unlike credit cards, bitcoin payments are final. All transactions are also transparent for everyone on the network. So any fraudulent dealings can be dealt with immediately.
Use as an alternate payment method. Merchants who want to expand their customer base may find that some people want more privacy than others. Thus, they may not want to pay using standard options, such as credit cards. Knowing that your store accepts bitcoins can be a huge relief for some.
Considerations Before You Receive Bitcoin
It can be exciting to begin accepting bitcoin right away – but there are a few things you need to consider first as a business owner:
Legal issues with digital currency in your country. First, read up on how your home country sees cryptocurrency. Do they recognize it as an alternate form of payment? Do they support it? Do they have existing laws that protect consumers and merchants who use it?
How digital currency is taxed. While no central figure or entity regulates bitcoin, there could be tax issues for merchants who accept bitcoin depending on your country. If you’re from the U.S. and need the basics of bitcoin tax ramifications, check out this informative read from Cryptocurrency Enthusiast, Alexey Kassabov.
Don’t forget to get in touch with your accountant and/or finance advisors. You can also seek legal counsel BEFORE you start to receive bitcoin.
Ways To Start Accepting Bitcoin
Once the basics are out of the way, you can set up your store to receive bitcoin payments. Here are three ways to do it:
Accept Bitcoin Payments Manually
As mentioned, the beauty of digital currencies is that you can choose NOT to depend on third party services. While this gives you more freedom, you’ll need to take care of the rest (i.e. invoicing and billing) by yourself.
Getting bitcoin payments manually is ideal if you expect very few customers who would be paying in cryptocurrency.
- Simply set up your bitcoin wallet, and generate a bitcoin address for customers to send in their payments.
- You can opt to send the goods once the transaction is confirmed in the network (which usually takes 10 minutes or so), OR send them right away.
- You’re also in complete control of which platform you use (g. Blockchain.info, Coinbase, Armory, etc.).
Just make sure you have the latest in security to avoid being hacked. You can also try setting up a different address for each bitcoin transaction to ensure safety for you and your customers. This would also make it easier to track every transaction should you need to in the future.
Accept Bitcoin Payments Through Payment Service Providers
Payment service providers (PSP), such as Bitpay, offer more convenience for merchants. If you run an online store, you can simply set up a plugin (usually free) that will help you accept bitcoin payments anytime and anywhere.
PSPs are not like bitcoin wallets! The latter lets you buy and sell bitcoins – PSPs on the other hand, are designed to be used by merchants. Think of it as a middleman that helps keep bitcoin transactions safe so you get the goods you want, and the merchants promptly receive payment.
Bitpay is one of the largest payment service providers out there. If you decide to use their platform, as a merchant, you’ll get the added bonus of converting bitcoins to fiat, which then gets deposited directly to your bank account.
Using PSPs like Bitpay will save merchants lots of hassle in that:
- PSPs take care of invoicing, tracking, and record-keeping.
- They only take minutes to setup, and are fairly easy to use (even for beginners).
- Depending on the platform you choose, funds are automatically transferred to your bank in the currency of your choice, ready to be withdrawn anytime. This protects you from fluctuating bitcoin values.
- Customers can quickly and effortlessly make bitcoin payments or donations everytime they shop at your store.
Setting up a payment service provider is as easy as installing a plugin. If you already have an account with a PSP, simply activate it through your plugin (like WooCommerce). Create a payment button, add it your product page, and you’re done!
If you’re operating a WordPress site, here’s how to accept bitcoin payments using Bitpay.
Accept Bitcoin Payments Through POS Systems
POS or Point Of Sale systems help merchants accept bitcoin in their retail shops. If you’re a small business owner who wants to dip your toes into digital currency, having a POS system can make the process quick and hassle-free.
Depending on the platform you choose and/or your existing POS system, customers can pay with bitcoins using QR codes on their mobile devices, through touch screen apps, or hardware terminals.
Promote Your Bitcoin Payment
No matter which method you choose to accept bitcoin payments, don’t forget to advertise it for your customers.
Include a ‘Bitcoin Accepted Here’ logo on your blog and social media pages for exposure. Don’t forget to add this information on your online store’s homepage, too. For retail stores, hang up a sign to let customers know they can now pay using bitcoins.
As a merchant, receiving bitcoins for payment can widen your horizon and open up new doors. Go ahead and dip your toes in the water while it’s still warm!