Accept high-risk crypto payments like a boss.
Cryptocurrency pops in and out of mainstream news with headlines that inspire awe when Bitcoin rallies to all-time highs and something close to obituaries when its price falls. While cryptocurrency has mainly functioned as an investment to be bought low and sold high thus far, many developers and evangelists within the crypto space are working to deliver on its promise of functioning as currency.
In fact, a recent survey conducted by PYMNTS and BitPay found that 60% of Americans who have held crypto are interested in using cryptocurrency to make consumer purchases.
With credit card fees becoming a bigger and bigger burden on small businesses, merchants may now be more open than ever to low-cost, alternative payment methods and learning how to become a Bitcoin (and other cryptocurrencies) merchant. Below, we’ll walk you through how you can begin accepting crypto payments and the pros and cons of doing so.
Getting started takes one minute
Cryptocurrency payments mean, in most contexts, trading crypto for goods and services similar to how you pay for it in dollars.
It should be noted, however, that cryptocurrency is not currently legally treated as currency anywhere in the world other than El Salvador (and that’s Bitcoin specifically), and China has banned crypto trading altogether. That said, in most countries, you can trade cryptocurrency as though you were trading property.
Since cryptocurrencies are generally designed with peer-to-peer transactions in mind, taking a crypto payment is as easy as transferring coins from one crypto wallet to another. This can typically be done by scanning a QR code or copying and pasting a hash code and doesn’t require any intermediary.
Cryptocurrency is a largely unregulated land of high contrasts, with amazing opportunities and shocking pitfalls. If you’re thinking about how to accept crypto payments as a business, you’ll want to weigh the pros and cons.
Pros
Cons
Because blockchains never really die, there are thousands of cryptocurrencies out there. You don’t need to know them all, but some names tend to come up more than others.
At the risk of alienating passionate supporters of certain chains, let me start with a disclaimer that the following list isn’t anything close to complete, nor is it a particular endorsement of any chain over another.
The most important thing about learning how to accept cryptocurrency payments is that you don’t need a payment processor or payment gateway to take them. You and your customer just need to have crypto wallets that can take the same currency. These are typically available as mobile apps or browser extensions for desktops. Cold storage hardware wallets are also available for maximum security, although these can be inconvenient if you’re going to be handling a lot of transactions.
At the most basic level, cryptocurrency wallets are designed to receive or send payments simply by scanning a QR code or exchanging a secure hash code that can be copied and pasted into a text, message, or email. If you want the full functionality of a POS system or eCommerce checkout, however, you’ll want to consider a cryptocurrency payment gateway.
If you are wondering how to accept crypto payments on your website, you need to generate a wallet address on your site for each sale. The customer would then use that code to send you the currency in question. This can be done without any formal integration and a relatively small amount of code.
The trouble with this method is that you’ll have to handle invoicing yourself. And you’d also have to build your own checkout system around it. For a more convenient experience, you’ll want to consider a cryptocurrency payment gateway. Though still on the novel side, cryptocurrency payment gateways are a more mature industry than you might expect, many of which integrate into popular eCommerce platforms, such as Shopify or WooCommerce.
Accepting cryptocurrency payments in person is even easier. You or your customer simply needs to scan the other’s wallet QR code and exchange the agreed-upon amount of cryptocurrency.
As is the case with eCommerce, however, this process may not smoothly integrate with your POS processes. Here again, a cryptocurrency payment gateway can provide a convenient interface for your customers. You shouldn’t need any specialized terminals to take crypto; any mobile device should do. The trick is finding terminals that can seamlessly process both EMV/NFC card transactions and take crypto payments.
While uncommon, there is hardware designed to do just this. Bitpay, for example, integrates with the Poynt open commerce platform, Smart Terminal.
As we touched on above, there are advantages to using a cryptocurrency gateway if you plan to take more than just the occasional cryptocurrency payment. These are services designed to work crypto payments into the normal flow of your business with minimal disruption.
Cryptocurrency merchant services come in both custodial and non-custodial forms. “Custodial” in this case refers to whose hands the ownership of the cryptocurrency in question will pass through. The more minimalistic crypto payment gateways are non-custodial, meaning the service never takes control of the coins. Custodial accounts, on the other hand, limit your exposure to cryptocurrency, allowing you to take it as payment but never actually take possession of it until the time of payout (or never, if you choose to be paid out in cash to your business bank account).
Each approach has pros and cons, and setting up a custodial account will usually be a more involved process with more screening than a non-custodial one.
To sum up, here’s what you need to take crypto payments:
Though crypto payment processing is still a fairly small niche, there are a number of services available that attempt to streamline crypto payments into a more familiar checkout process. These services can help reduce your exposure to crypto volatility, integrate crypto payments into existing eCommerce and POS platforms, and make it easier to take multiple cryptocurrencies without fumbling through a dozen crypto wallets.
And since cryptocurrency is still a largely unregulated free-for-all, you’ll want to choose a payment gateway with a good reputation. Check out our list of popular cryptocurrency payment gateways for a deeper look at these services.
The cost to accept cryptocurrency payments can vary depending on how you go about taking them.
The first thing to consider is network fees. These are the fees charged by the chains themselves whenever coins are sent from one address to another. In most cases, this fee is paid by the person sending the payment, so by default, your customer would be paying this fee. You would, of course, also pay these fees when you send money to another address. These fees can vary greatly depending on the cryptocurrency and current network congestion levels.
If you’re using a crypto payment gateway, you can expect around 1% per transaction fee. Monthly fees are currently rare for these services, but some do charge a small fee to deposit crypto or cash into your personal or business accounts.
As cheap and relatively simple it is to pay with cryptocurrency, there are still some issues to consider before you dive in head-first. Here are some factors to consider.
Get started today.
Instant everything.
Next-generation tech.
Easy integrations.
Wanna chat with a human?
Give us a call!
800-520-4488
Super-friendly, US-based support from our HQ in Michigan.