If your enterprise has yet to join this innovative movement, it could be high time to start mapping out a roadmap to crypto acceptance. Speak to an accountant so you understand the tax implications of accepting bitcoin or other cryptocurrencies, as regulations vary by state and country. Regulations may change how you plan to record bitcoin payments in your overall accounting systems. Although cryptocurrency transactions eliminate cyber threats like stolen credit card numbers, the currency still isn’t 100 percent safe from cybersecurity threats. So far, there is no way to completely prevent cybercriminals from getting their hands on users’ digital wallets. This is particularly dangerous because, unlike fiat currencies like the U.S. dollar and the euro, cryptocurrencies are not backed or insured.
You do not need a separate one if you plan on using a gateway to transfer the funds from your sales into US dollars or similar currency before depositing them into your business checking account. These gateways offer a plethora of options for integrating crypto payments on your website, ranging from simple payment buttons to invoice generation. After successfully setting up your crypto wallet, the next step in your journey is to incorporate cryptocurrency payments into your website. A crypto wallet operates much like a traditional bank account, serving as a digital repository where you can send and receive digital funds. Alternatively, a merchant with its own cryptocurrency account linked to a payment processor, can set up the process so that there is no need to convert the crypto payment into fiat currency. Cryptocurrency is a decentralized digital currency built on, secured with, and encrypted by blockchain technology.
- Cryptocurrency is an information-dense field with a relatively steep learning curve, which can be a significant obstacle when you’re also trying to run a business.
- Accepting cryptocurrency requires setting up a digital wallet on a digital currency exchange, which could be technically prohibitive for small business owners unfamiliar with the technology.
- Riding this wave, several small businesses are proactively aligning their strategies to be able to cater to an expanding consumer base that prefers to transact in crypto.
- Be ready to grab every opportunity to stand out and thrive in today’s dynamic market.
- It eliminates the need for managing multiple wallets for different cryptocurrencies, offering a streamlined, user-friendly experience.
It eliminates the need for managing multiple wallets for different cryptocurrencies, offering a streamlined, user-friendly experience. Compared to traditional point-of-sale (POS) systems, cryptocurrencies offer several primary benefits to consider. For businesses running e-commerce platforms using services like Shopify, Magento, or Woocommerce, this process is relatively straightforward. The wave of cryptocurrency adoption has swept over the globe, as individuals and organizations are becoming increasingly comfortable with this digital asset class.
Step 2: Set Up a Crypto Wallet or Crypto Gateway
The high volatility of cryptocurrencies and the inherent risk of cyber-attacks are key concerns. Accepting cryptocurrency requires setting up a digital wallet on a digital currency exchange, which could be technically prohibitive for small business owners unfamiliar with the technology. Cryptocurrency is an information-dense field with a relatively steep learning curve, which can be a significant obstacle when you’re also trying to run a business. Several serious considerations must be taken into account – both technical and pragmatic – before deciding to accept crypto as a form of payment from your customers. We’ll weigh all the cryptocurrency factors small business owners should consider and examine how some blockchain startups are trying to push the space forward.
While cryptocurrency is still largely viewed as a futuristic trend that’s not here to stay, others are going all-in on the new digital currency. Data shows that nearly half of US merchants have started accepting cryptocurrency as a payment method, yet only a very small portion of these are small businesses. The standard payment processing transaction fee for crypto payments is about 1%, making it much more affordable than the average credit card processing fee (3%) and even some ACH direct deposit fees (1%–1.5%). In-store shoppers can also reap the benefits of being able to pay in cryptocurrency—if you let them. There are many options to use some of the above platforms to handle in-person crypto payments. Consider adding a crypto-compatible QR code scanner or NFC terminal for in-store checkout.
This method effectively shields your business from potential losses due to sudden market changes, ensuring you receive a consistent cash value for your crypto transactions. If you’re unable to or don’t want to integrate, you can organize direct payments with your customers. All they need is your wallet address or your QR code, which you can generate from your wallet. Join the thousands of businesses already using the world’s leading crypto payment processor. NOWPayments allows you to simply set up your payment system, and focus on running your business. As a community based currency, Verge is proud of working with them to create awareness to non-custodial payment methods.
Integrate Bitcoin Payments With Your Accounting Software
With legislation that could interrupt the crypto payment acceptance process – including the possible creation of a governing organization to monitor cryptocurrency firms – you may face challenges. Caution is always advised with the adoption of any new financial technology. Cryptocurrency is a digital medium of exchange that relies on peer-to-peer blockchain technology. It’s decentralized – no central bank or government regulates or backs crypto. Buyers transfer funds directly to sellers without the third parties traditionally used to process payments. That said, there are several benefits and challenges that are more straightforward when it comes to accepting crypto payments in your small retail business.
BitPay shields you from the price volatility of Bitcoin and other cryptocurrencies. You get every dollar or euro of what you charge, minus a low transaction fee. PayPal charges a transaction fee for buying and selling cryptocurrency on its platform. The fee is approximately 0.5% of the total transaction but varies according to market conditions.
There are technical barriers to accepting cryptocurrency.
It’s important to note that according to the International Revenue Services (IRS), all cryptocurrencies are treated as capital assets and are subject to capital gains tax. Some of the top crypto processors in the world are CoinBase Commerce and BitPay. Riding this wave, several small businesses are proactively aligning their strategies to be able to cater to an expanding consumer base that prefers to transact in crypto.
It took only four months within the first half of 2021 for the global cryptocurrency usage to double to over 200 million. It uses mathematical algorithms to scramble messages; the sender’s cipher or key is necessary for decoding the message. This strategic move not only demonstrates your adaptability to global financial trends but also shows your commitment to embracing modern technology, fostering customer trust and loyalty. This will ensure inclusivity across all age groups, enabling a broader spectrum of customers to transact with ease and convenience. Furthermore, you should be prepared to adapt to changing regulations as discussions continue on how to effectively oversee the crypto space. Doing so will not only ensure you stay relevant but also help you stay competitive in the ever-evolving business landscape.
For high-risk merchants who’ve been declined by traditional payment processors, accepting cryptocurrencies may be especially appealing. This guide covers how to set up your business properly to accept crypto payments and the significant ways accepting cryptocurrency differs from accepting credit card payments. The average transaction fee for accepting cryptocurrency payments is 1%, which is considerably lower than credit card processing fees.
According to Deloitte, 3 out of 4 retailers plan to accept cryptocurrency payments. Part of the motivation is helping their brand be perceived as cutting-edge – making crypto a tech trend that will influence marketing. When choosing your crypto wallet, consider which types of cryptocurrencies it works with. Bitcoin is by and large the most popular cryptocurrency, with 75% of crypto owners owning some form of this currency.
However, if you encounter difficulty in finding the perfect plugin to suit your specific needs, you have the option to register with a cryptocurrency payment gateway. You’ll want to make sure your bitcoin payments are being recorded in the same platform where you account for the rest of your business transactions. This can easily be set up by integrating bitcoin transactions with your current accounting software. When a customer begins a payment, BitPay locks in an exchange rate available to the customer for 15 minutes. While many speculate that digital payments like crypto will usher in a cashless society, it’s doubtful that digital transactions will become exclusive anytime soon.
While credit cards can also be subjected to currency fluctuations, the regulated nature of fiat currencies makes credit cards a more stable payment method than crypto. On the other hand, using cryptocurrency to accept payments is far less expensive than credit cards because it is not as heavily regulated. Given the diverse range of cryptocurrencies in the market, it’s highly probable you’ll be accepting payments in various digital currencies from different customers. According to a January 2020 HSB nationwide survey, 36% of small businesses accept cryptocurrency payments.
Be ready to grab every opportunity to stand out and thrive in today’s dynamic market. As more customers invest in crypto, digital wallets will increasingly become a preferred payment option for your customers. If you decide to add cryptocurrency to your customer payment options, you must learn about the technology, set up a digital wallet and advertise crypto acceptance to customers.
- You should also consider the level of crypto/bitcoin payment security that wallets provide.
- Indeed, if your business caters to a younger, digitally-savvy demographic, the capacity to accept cryptocurrency payments could become a vital necessity.
- There are several reasons a business owner may want to accept bitcoin payments.
- It’s decentralized – no central bank or government regulates or backs crypto.
- As a safeguard, investing in insurance to cover potential issues such as data security breaches and losses due to cybercrime becomes critical.
- Some of the top crypto processors in the world are CoinBase Commerce and BitPay.
However, it’s important to note that embracing crypto is not simply a survival strategy for small businesses. It goes beyond that, acting as a catalyst for improved operational efficiency. BitPay provides payments buttons, a hosted checkout, and embeddable invoices for your website. We have developed a strong partnership with NOWPayments that is dedicated to bringing real world utility for cryptocurrencies via Travel. They have a very supportive team and we look forward to a long lasting relationship. Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you.
How To Accept Bitcoin Payments in 5 Steps
If you decide to move forward and start accepting cryptocurrency, you must make some decisions and take a few steps. Overall, the process is similar to getting set up with a credit card processing company. Regardless of which camp you’re in, learning how to accept cryptocurrency payments can help boost conversion rates and keep your business ahead of the competition. Cryptocurrency is becoming more widely accessible, and early adopters are uniquely positioned to reap the benefits early on. One of the most significant differences between cryptocurrency and credit cards is the former’s volatile value.
This type of wallet supports numerous digital currencies, acting as a versatile, all-in-one solution. The only reason for a business to hold on to cryptocurrency would be as a speculative investment, Wolanow noted, but this essentially amounts to gambling with your revenue stream. Digital currency’s highest risk is price volatility, which makes its value extremely unpredictable. For example, Bitcoin was first valued in pennies in 2009; it rose to more than $64,000 per coin in February 2021 before dropping down to less than $28,500 per coin in May 2023. This audience is typically more open to embracing newer technologies, including digital currencies, making it a crucial aspect of maintaining relevance in their eyes. The unique characteristic of cryptocurrencies is their decentralized nature, which means they aren’t regulated by any bank or governmental body.
Business owners who accept crypto should carefully monitor ever-changing local and state business regulations, particularly related to online business laws and data privacy regulations like the GDPR. Since Bitcoin’s introduction in 2009, cryptocurrency has worked its way into mainstream conversations and consumer decision-making. The medium of exchange is now actively traded 24/7 and becoming more widely accepted as a payment form. Overstock uses BitPay plugin to accept Bitcoin as a payment method on its online checkout. Now that you have your crypto wallet and/or gateway set up, it’s time to add crypto into your website.
PayPal
Once you understand the crypto regulations in your area and have an accounting plan to track these payments, accepting cryptocurrency can be seamless to set up. Adding cryptocurrency as a payment method has become increasingly popular among small businesses with the availability of affordable, easy-to-use platforms and apps. To start accepting crypto and bitcoin as a business, you need to sign up for a cryptocurrency account (wallet or payment gateway) and integrate it into your online checkout. You can also use a compatible QR code scanner to accept crypto payments in-person. A wallet will keep your money as cryptocurrency, while a payment gateway will allow you to easily exchange crypto for U.S. dollars. Gateways are an easier option that offer more flexibility since you can keep your bitcoin or convert it.
If this option is not available to you, you can integrate payments with HTML code from your wallet (both BitPay and Coinbase provide this). In addition to appealing to crypto owners, since cryptocurrency is unregulated, it appeals to cannabis and other high-risk businesses that banks and traditional merchant accounts decline to work with. Get ahead of the Competition & Dive Into CryptoIncorporating cryptocurrency payments into your business operations signifies a progressive and innovative mindset, greatly enhancing your brand’s image.
How Crypto Payments Work
There are no size restrictions on businesses that can accept cryptocurrencies. Accepting bitcoin and other crypto payments as a business owner can keep your business competitive, open your business up to more customers and potentially lower your payment processing fees. Although cryptocurrency owners can trade it for goods and services, crypto is often treated as an investment opportunity. In case you wish to stay clear of direct cryptocurrency exposure, you can opt to accept bitcoin payments via PayPal’s crypto option.
For small businesses transacting in bitcoin for purchases, the IRS considers each transaction as a crypto sale. Should the ‘sale’ value of your coins exceed the initial ‘purchase’ cost, you’ll be liable to pay capital gains tax in addition to the relevant sales tax. These platforms are designed to automatically convert your Bitcoin into cash, thereby mitigating volatility issues that can cause fluctuations in your crypto’s value. A multi-cryptocurrency wallet ensures efficient handling of your digital assets, saving you from the hassle and complexity of operating and maintaining separate wallets for each individual cryptocurrency.
