Should you, and if you should, how can you accept Bitcoin and other Cryptocurrencies as a form of payment on your site? It’s not something that was even contemplated by most people even 12 months ago, but nowadays it’s a thing. So for those of you thinking about it, here’s a quick and easy starting point for you.
Now, I’ll be using Bitcoin as a generic term for pretty much any and all Cryptocurrencies. You should know there are around 2,500 (August 2019) Cryptocurrencies, so can I bollocks be arsed trying to name all the ones people might want to use. If I say Crypto or Bitcoin, I mean whatever the frig you decide to accept on your site. Bitcoin, BitcoinCash, Ether, Monero, DASH, LiteCoin, DogeCoin, Verge, etc.
Obviously, this is only going to be applicable to those of you who accept payment online as part of your business. But from the other side of the fence, I reckon there’s a good chance at some point in the not too distant future, we’ll be paying for stuff online with Crypto rather than your home currency.
Remember how freaked out people were about paying for anything online when it first became a thing? That’s what we’re reliving again now with the acceptance of Cryptocurrency and Bitcoin.
This is the first issue that’s always raised when the topic of accepting Bitcoin as payment is brought up. So let’s get one thing clear – you decide if you are exposed to the currency exchange risk.
Do you want to charge £300? Then charge £300. The payment gateways (that we’ll get onto later) will automatically calculate at the time of checkout how many Bitcoin that is for the person paying.
You can then get the gateway to pay you in £, in which case you’ll get £300 (less their fee). Or you can accept the Bitcoin and hope it goes up in value. But it may go down in value as well, that’s where the risk comes in.
But you get to choose!
Right, now we’ve got the elephant in the room out of the way, how do you actually go about accepting bitcoin as a payment option?
First, off you’re going to need a Payment Processing System - there are a bunch out there, so Google it and pick the best one for you. The ones I’ve heard the best things about are BitPay, CoinPayments and Coinbase. All much of a muchness, but they have their individual pros and cons.
The basic and consistent premise though is that they allow you to accept Bitcoin (or a varying number of other coins) as a means of payment. Yay, problem solved.
I’m focusing more online than offline, but quite a few of these PPS have offline capabilities too. So just like you can swipe your card and tap your phone, you can do the same but instead, charge someone's Bitcoin wallet. Cool huh?
The actual practical steps to integrating your payment processor is too boring (and changeable) to go into in detail. Pick one, and watch the tutorials, but it’s really no more difficult than linking Stripe or Paypal.
You’ll often be able to handle a number of transactions, say $1000 per month, without much more than an email address. But beyond that, you’ll have to verify your bank account details. Again, nothing groundbreaking here, and if you’re a legit business it shouldn’t put you off in the slightest.
The PPS will usually charge a fee for the transaction, the same way PayPay and WorldPay and Stripe all do. But it tends to be a lower cost, and with no minimum charge. So expect fees in the region of 0.5% - 1%.
As a side note, one of the benefits of using Crypto as a means of accepting payments is there is zero possibility of chargebacks. The customer cannot go to their payment service and claim it was a fraud and demand the charge be reversed. Not that’s not to say you don’t have to give refunds. If you or your product is shit, then you absolutely will need to give refunds. But you’ll be dealing with the customer instead of a third-party payment processor.
Once you’ve integrated the PPS with your website and your bank, you can plonk up a button that says “Pay with Bitcoin” or something similar. When someone gets to the checkout cart, they can select whichever payment option they want, and Bob’s your Uncle, you’ve just accepted a crypto payment!
As already mentioned, the majority of these PPS will allow you to instantly convert your Bitcoin into USD or EUR or GBP. In real terms, when you create your product on Coinbase Commerce for example, you set the figure you want to charge in GBP. At the point of checkout, the customer will be billed the exact amount of Bitcoin that equates to that GBP figure on that day.
Which means the volatility risk is passed over to the customer and not you. One day someone goes to buy your product and it costs 1 Bitcoin. The next day it might cost 1.2 Bitcoin. The day after, 0.8 Bitcoin.
But on each day, you receive the same £8,000 per sale (conversion used as an example).
The alternative is to not convert it into your local currency, and instead leave it as Bitcoin in your account. You then have two options with what to do with it.
You can keep hold of the Bitcoin and hope it goes up in value. So the £8,000 sale you just made might end up becoming a £10,000 sale. There are a whole bunch of taxation and accounting issues with something like that, so I’d personally transfer the Bitcoin into another account (personal or otherwise), and see that as a separate transaction. This is now your company using the sale proceeds of a product or service as an investment.
Or, option 2, you transfer the Bitcoin into another account and you use the Bitcoin to buy other goods and services for your company or yourself.
You can actually pay staff in Bitcoin nowadays, and there are a number of cards you can get that are treated as Mastercard / Visa by vendors, but are charged up with Bitcoin. So you can pretty much buy anything you want with Bitcoin now.
So that’s about it. You can use it as a bit of a gimmick to make you a little different. You can do it to support a disruptive financial movement in human history. You can do it to gain access to a new niche set of customers. Or you can do it because you think Bitcoin is going to increase in value so it’s an investment on your behalf as well.
Whatever your reason, you now have a bit of a rough guide of how to do it. But know that there are many other alternatives out there, so do your research and find the best solution for your business.
Good luck, but don’t say I didn’t warn you that this Crypto business is very volatile and high risk!