How To Accept Bitcoin As A Business (2023 Guide) (2024)

There are several reasons a business owner may want to accept bitcoin payments.

• Save money on credit card processing fees: Credit card processing fees—usually between 3% and 4%—are a big expense for merchants. For every $10,000 a business owner earns, $300 goes straight to fees. It makes sense that owners are incentivized to find ways to cut these costs. Bitcoin transactions do not require a processing fee (though crypto payment gateway merchants will charge a 1% fee).
• Transact with new and international customers: Offering bitcoin as a payment method will open your business to new customers. It will also make it easy to transact with international customers without paying steep international fees. The more payment options you have, the easier you make it for customers to pay you.
• No risk of chargebacks or disputes: Bitcoin works similar to cash in the sense that all payment is final. This means, as a merchant, you will not have to worry about paying steep chargeback fees (usually $25 per chargeback) or dealing with payment disputes.

Pros and Cons of Bitcoin Payments

Accepting bitcoin payments will require paying fewer fees than credit card payments. However, there is a higher learning curve for accepting cryptocurrency, and it requires a bit of patience to set up. Bitcoin is a decentralized payment method, which means if there’s an error, you will not be able to call anyone to resolve it. There is a higher responsibility on the merchant, as opposed to a credit card processor, where you can get your questions answered by phone.

While credit card processors typically side with the customer in a dispute, and merchants pay a chargeback fee, bitcoin functions more as cash. Once the payment has gone through, there is no third party that can intervene with the transaction.

While bitcoin transactions are usually instant, sometimes they can take time to confirm and reach the sender, depending on the network activity. However, once payment is initiated through the network, it cannot be reversed. Credit card payments, on the other hand, are processed immediately, but customers are able to dispute payments after they’ve been processed.

Bitcoin—and cryptocurrencies in general—are volatile. If you accept them as a business owner, you’ll want to make sure you are converting your payment to U.S. dollars quickly or holding the crypto as part of a long-term investment plan. These payment gateways can convert your crypto payments to cash automatically.

Coinbase

Coinbase charges a 1% transaction processing fee. The exchange rate is locked for customers once they initiate the payment until they checkout. Coinbase also has integrations with popular e-commerce platforms including Shopify and WooCommerce to make the experience more seamless for merchants and clients. Merchants can opt to have their bitcoin automatically converted to cash, or initiate an exchange manually through Coinbase Exchange.

BitPay

BitPay charges a 1% transaction fee to process payments. When a customer begins a payment, BitPay locks in an exchange rate available to the customer for 15 minutes.

PayPal

PayPal makes it easy for customers to pay using their cryptocurrencies. PayPal will automatically convert crypto to U.S. dollars for the merchants. This option is geared toward offering more payment options for customers while still allowing the merchant to deal exclusively in fiat currency.

The process to accept bitcoin payments for your business will vary slightly depending on which online platforms you are already using. Here are the basic steps to follow:

1. Understand Bitcoin Regulations in Your Area

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.

2. Set Up a Crypto Wallet or Gateway

Next, you’ll want to set up a crypto wallet or gateway. 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. The downside is that a crypto payment gateway will charge transaction fees (usually around 1%) while a wallet does not charge any fees to process transactions (though keep in mind you may still eventually have to pay fees if you convert your bitcoin down the line).

3. Enable Bitcoin Payments on Your Checkout Process

Setting up bitcoin payments in your online store could be as simple as downloading a plug-in or app on your e-commerce platform. If this option is not available to you, you can integrate payments with HTML code from your wallet (both BitPay and Coinbase provide this).

4. Integrate Bitcoin Payments With Your Accounting Software

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.

5. Prepare for Crypto Volatility by Converting Bitcoin to Cash

The price of bitcoin is always changing and, historically, can be volatile. If you plan to accept bitcoin for your business, either plan for huge fluctuations in price value or plan to convert bitcoin payments to cash immediately when you receive them. This will shield you from potential price drops.