With Bitcoin gaining steam, it’s time to consider accepting it as a payment method. Here are some ways to accept it as payment, as well as potential benefits and risks to consider.
After years of small ups and downs, Bitcoin’s value skyrocketed in 2017, going from under $1,000 to over $18,000. Investors who were smart enough to jump on board early became millionaires and even billionaires.
With the growing popularity of Bitcoin, it’s time to consider accepting it as a payment method at your business. In case you’re on the fence, here are several notable benefits of this cryptocurrency.
Benefits of Bitcoin
Bitcoin offers some advantages over other payment methods for you and your customers. The transaction fees are much lower than they are with credit cards, typically only a few cents for each purchase, and those transactions process very quickly because there is no financial institution acting as a middleman.
There’s no risk of sensitive information being compromised with cryptocurrency transactions, because none of the customer’s information is attached to the payment method. The customer essentially sends the cryptocurrency from their online wallet to yours. It works the same way a cash transaction would. That also means no chargebacks, which eliminates your risk of chargeback fraud.
Considering Bitcoin’s recent increase in value, you could come out ahead by allowing customers to pay you with it. It’s easy to turn your Bitcoins into cash or swap them for other digital assets of your choosing. From a customer satisfaction standpoint, the more payment methods you accept at your business, the better.
How to accept Bitcoin with a payment processor
The simplest way to accept Bitcoin at your business is to use a Bitcoin payment processor. All these payment processors make it easy to add Bitcoin to your accepted payment methods, both on a website and at a brick-and-mortar store. They also provide other cryptocurrency options if you want to accept more than just Bitcoin.
After you sign up with your payment processor of choice, you can get a Bitcoin wallet through it or connect yours if you have one already. For an e-commerce site, you then install a plugin from your payment processor to make Bitcoin an accepted payment method with your existing e-commerce platform. For in-person transactions, the most efficient method is selecting a payment processor that can integrate with your point-of-sale (POS) system.
Using a Bitcoin wallet app
Another option for in-person transactions is any Bitcoin wallet app. These apps generate a QR code corresponding to a payment address, and then the customer can scan the QR code with their phone to send Bitcoins from their digital wallet to yours.
Although you avoid fees this way, it’s much slower than a POS system. It works if you want to do a test run before you commit to accepting Bitcoin, but once you’re sure about it, you should transition to a payment processor.
Once you’ve received payments in Bitcoin, the money will be in your digital wallet and you can use it however you wish. Bitcoin payment processors provide the option of converting your Bitcoins to a traditional currency, typically for a 1 percent fee.
You face risks when accepting Bitcoin at your business. The most significant is the volatility of the cryptocurrency. Bitcoin has had a fantastic end to 2017, but some believe its value will go back down.
If you accept Bitcoin and don’t convert it to a traditional currency right away, any market fluctuations could affect your bottom line for better or worse. Although all currencies fluctuate in value, Bitcoin is much less stable than other currencies right now, and there’s no guarantee that will change.
You may also find that you don’t receive many Bitcoin transactions. People are understandably hesitant to spend their Bitcoins now, since the value has been increasing so quickly. It’s possible that Bitcoin will become more of an asset than a currency, in which case it’s as likely to have a Bitcoin transaction as it is to have someone pay you in gold or silver.
Even though the price of Bitcoin is anything but stable, there is still a subset of customers who appreciate being able to pay with it, and accepting it can be beneficial for your business. If you start accepting Bitcoin now, you won’t be playing catch-up if and when the currency becomes a widely used payment method.
Roman Shteyn is the CEO and co-founder of RewardExpert – a free service that helps people maximize their miles and points to earn free travel. Roman has over two decades of experience in the credit industry and has helped decipher rewards programs for both businesses and consumers. As a technology entrepreneur, Roman has helped fuel his company through rewards earned by savvy business spending.
As a serial globe hopper, Roman has mastered the art of reward travel and hasn’t paid full price for an airline ticket, hotel room, or upgrade in over 15 years. Roman educates millions of consumers on how to turn their spending into rewards. Roman frequently writes on credit-related issues, personal finance, financial management for small businesses, business travel, loyalty & rewards programs, and money-saving tips for both consumers and businesses.
Roman grew up in New York City and became an entrepreneur at an early age, starting his first company while earning a B.S. degree in Computer Sciences at the Polytechnic Institute of NYU. More information on RewardExpert can be found at www.rewardexpert.com.