How to Accept Crypto & Bitcoin Payments as a Small Business
Forward-thinking small businesses that want to set themselves up for sustainable success may want to consider accepting payments with bitcoin and other cryptocurrencies. As many as two-thirds of crypto owners and more than half of non-crypto owners feel that very few businesses accept cryptocurrency payments, and 47% of owners seek out those that do.
In addition to attracting crypto owners, crypto payments have lower transaction fees than credit cards (1% vs. 3%). And since cryptocurrency is unregulated, it attracts cannabis and other high-risk businesses that banks and traditional business accounts refuse to work with.
Reading: How to accept bitcoin payments as a business
step 1: understand cryptocurrency payments
Although owners of cryptocurrency can trade it for goods and services, cryptocurrency is often treated as an investment, something to be bought and held while it creates value and sold for capital gains when its value is high.
Because crypto payments are decentralized and unregulated, they work as peer-to-peer (p2p) payments and are transferred from one digital wallet to another. By comparison, traditional credit and debit card payments are processed through your customer’s bank, card networks, and your bank.
step 2: set up a crypto wallet or crypto gateway
You must first decide whether you want to receive your crypto payments as cryptocurrency or as fiat money.
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If you want to collect, store and use cryptocurrency for your business or personally, you need a crypto wallet. If you want to accept crypto payments but convert them to traditional fiat money, you will need a crypto payment gateway. many popular solutions like coinbase and bitpay have wallet and gateway functionality.
Step 3: Integrate crypto payments into your online payment
Now that you’ve set up your crypto wallet and/or gateway, it’s time to put crypto on your website and enable it as a payment option at checkout. There are two main approaches to doing this:
- open source api: if you use a crypto platform that offers an open source api, like the one you often find with self-hosted wallets, you can integrate it with your website using custom html code . the advantage here is that you have more control over the look and feel, although it requires technical resources that not all small businesses have access to.
- plugin/application: depending on your e-commerce platform, an integration may be available. crypto integrations make setup easy because they take care of all the technical stuff for you. it’s simply a matter of downloading the plugin or app and installing it on your website.
Some popular crypto payment platforms with plugin and api integration options include:
- coinbase commerce: Accept seven different cryptocurrencies, send invoices, and use transaction reporting tools for accounting and reconciliation. coinbase offers hosted and self-custody payments and charges a 1% transaction fee for each .
- bitpay: bitpay payment integration is not as smooth as coinbase commerce—instead it displays a code qr at checkout for customers to scan and go to an online invoice which they then need to pay. It works the same way for in-store payments, except the QR code is on the cashier’s mobile device. like coinbase, bitpay also charges a 1% transaction fee, but it only works with bitcoin.
- coinpayments: coinpayments has a particularly attractive processing fee of just 0 .5% per crypto transaction (1% for token payments). supports a wide variety of currencies. You can integrate it into the checkout process, add pay and buy now buttons to any page on your website, send invoices, and use the open API to customize the experience. coinpayments also has point-of-sale (pos) integrations.
- opennode: opennode has crypto payment hosted through an open api, as well as platform-specific apps and integrations of electronic commerce. you can put opennode in the checkout experience, add buy now buttons and send invoices to your customers. this may not be the best option because like bitpay it is limited to bitcoin only.
step 4: offer crypto payments in person
In-store shoppers can also reap the benefits of being able to pay in cryptocurrency, if allowed. there are plenty of options to use some of the above platforms to handle crypto payment in person. Consider adding a crypto-enabled QR code scanner or NFC terminal to pay at the store. If you use a mobile POS, you can also integrate crypto payments with your existing system, if supported.
Although cryptocurrencies are still relatively new, they are on the radar of the payments industry. square, for example, obtained a patent for crypto payments technology in 2020, and paypal entered the game, allowing people to buy, sell, and hold crypto through its platform and then convert it to usd to pay for purchases. . nowpayments pos supports bitcoin payments, and coingate is launching a pos app that supports over 70 cryptocurrencies.
costs of accepting crypto payments
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The standard payment processing transaction fee for cryptocurrency payments is approximately 1%, making it much more affordable than the average credit card processing fee (3%) and even some deposit fees direct (1%-1.5%). some providers offer even lower transaction fees (coin payouts are only 0.5%), while others add a network fee on top of the 1%. potential additional fees include currency conversion fees and withdrawal fees. accepting crypto payments is certainly much more affordable than accepting credit cards.
pros and cons of accepting bitcoin & other crypto payments
It could be argued that accepting cryptocurrencies can increase the average value of transactions and encourage shoppers to make larger purchases and spend more money, although the data varies depending on the age of the consumer. Roughly half of cryptocurrency owners make purchases worth less than $100, although millennials and baby boomers are more likely to use the digital currency for high-value transactions than Gen Z consumers.
In fact, 47% of Gen Z crypto consumers pay for transactions over $100, while Millennials and Baby Boomers reach 50% or slightly more.
That said, there are a number of benefits and challenges that are made easier when it comes to accepting crypto payments in your small retail business.
While cryptocurrency is still largely seen as a futuristic trend that is not here to stay, others are betting on the new digital currency. Regardless of the field you are in, accepting cryptocurrencies as payment as a small business can help increase conversion rates and keep your business ahead of the competition. As time goes on, cryptocurrencies are becoming more accessible and early adopters are in a unique position to reap the benefits early on.
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you may also like…
- learn more about traditional business accounts
- read about other recent payment technologies such as qr codes and nfc payments