How to Accept Bitcoin and Other Crypto Payments as a Business?

Bitcoin and other cryptocurrencies have been gaining popularity as a method of payment in recent years. According to Crypto.com report, the number of global crypto owners has increased by 178% in 2021, rising from 106 million in January to 295 million in December, and is expected to reach 1 billion by the end of 2022.

As the world of cryptocurrency continues to grow, more and more business owners are starting to look into it. HSB nationwide survey shows that 36% of US small and mid-sized businesses accept cryptocurrency as a form of payment. And almost a quarter of small businesses in 9 countries (including the US, Germany, Singapore, and Brazil) plan to accept digital currencies in 2022, Visa Inc reports.

If you're thinking about accepting crypto payments in the future, there are a few things you need to know. In this post, we'll explain how to accept crypto payments as a business and discuss some of the benefits and drawbacks of doing so.

Should You Accept Cryptocurrency on Your Website?

This is one of the most important questions you should answer first. While crypto payment processing is fairly easy to set up, you should decide beforehand if this solution is right for your business. Here are a few useful things to keep in mind.

Benefits

Global reach. Crypto circulation is not as regulated as the circulation of fiat money. Acceptance of crypto payments simplifies processing and saves small and medium-sized businesses from many bureaucratic problems.
Transaction speed. Due to the lack of intermediaries, cryptocurrency payments are processed much faster than fiat. Thus, most traditional financial transactions take three to five days, while cryptocurrency transactions can be completed in a few minutes.
Sales increase. Expanding the number of payment methods accepted gives you access to a wider audience. Bitcoin “hodlers” usually don’t have many online stores where they can buy goods with crypto. This makes your store attractive to the community.
Lower transaction fees. The average cryptocurrency transaction fee ranges from “less than a penny” to $25, while the average credit card processing fee ranges from 1.5% to 3.5% per transaction. It’s worth noting that crypto fees may vary depending on the coin and the platform you are using.
Safety. Cryptocurrency payments are one of the safest payment methods. The modern security system allows you to save funds even in the case of cyber attacks.

Drawbacks

Volatility. Cryptocurrencies are known to be highly volatile assets, which means that their value can fluctuate over a short period of time. This can put your business at serious risk.
Legal risks. Digital assets are currently not regulated in most jurisdictions, so there might be no government protection if something goes wrong with a transaction.
Expense management. Many of your business expenses need to be paid in cash. Before you decide to accept cryptocurrency, make sure you have a cash flow plan and a way to easily and quickly convert it into cash.
Adoption. Not all your customers will be familiar with cryptocurrency. You'll need to make sure that you have clear instructions on how they can make payments in crypto, and prepare to answer any questions they may have.

What to consider before accepting Bitcoin and crypto?

Is cryptocurrency legal in the country where you do business?

Being decentralized in nature, cryptos are not regulated by any government or bank. At the same time, different countries approach the regulation of digital assets on their territory in different ways: in some (USA, Canada, Australia) they are legal, in others (Egypt, Iraq, Morocco, etc.) they are not. This means that you should be prepared to study the laws regarding the regulation of cryptocurrencies in your country and be aware of changing regulations.

Will you use direct transfers or a payment tool?

Peer-to-peer transactions do not inherently require a third-party processor. They can be freely sent and received, but require technical knowledge. Third-party payment tools help e-commerce stores quickly start accepting crypto payments. You will likely need to fill out an application with your business details and additional information if you plan to exchange cryptocurrency for cash through a service provider. These services do not process card payments, so if you want to accept card payments and cryptocurrencies, you will need both.

Cryptocurrency payment integration depends on the platform your website is hosted on. Different CMS like Shopify and WooCommerce (WordPress) require different plugins for quick setup. Most Bitcoin payment tools also offer alternative options such as custom integrations, payment buttons, and invoices.

Which cryptocurrencies to accept

Despite the fact that there are thousands of different coins, not all processors support every cryptocurrency. So if you are interested in, for example, accepting Ethereum or Litecoin, you need to make sure the provider supports the currencies of your choice.

Taxation and accounting issues

Before accepting crypto payments, we recommend you to consult with your CPA for the following reasons:

Tax implications. For example, the Internal Revenue Service (IRS) treats digital money as property that is subject to capital gains tax. If you, as a small business, use cryptocurrencies to make purchases, the IRS treats that purchase as a sale of cryptocurrencies. If these coins are worth more than you "bought" them, you will pay capital gains tax in addition to the applicable sales tax.
Integration issues. You should consider how information from your trading system gets to your accountant and organize integration between the accounting service and your crypto payment tool.

Converting to cash. Yes or no?

High volatility of cryptocurrencies can lead to huge repercussions for your business. Will you keep the received cryptocurrency? Will you convert it to cash immediately or on schedule? If you rely on consistent cash flow for your operations, these questions are critical. If you have a plan, make sure the crypto payment tool you choose can actually implement it.

Some business owners prefer to convert their Bitcoin into fiat money immediately after receiving it. Others prefer to hold on to their Bitcoin. If you plan on accepting payments in crypto then converting them to fiat money afterward, you need a crypto payment gateway. If you want to receive, store, exchange, or use it to cover your business or personal expenses, you need a crypto wallet.

Best Ways to Accept Bitcoin on Your Website

Depending on the digital wallet you choose, accepting bitcoin on your website can be as easy as installing software on your computer. This process works like this: when customers get to the payment part of the checkout process, they will see the Bitcoin payment option.

Setup a plugin on your website. If your e-commerce store runs on platforms like Woocommerce, Shopify, or Magenta, you can install one of the respective plugins to set up cryptocurrency payment processing. Plugins make the setup simpler because they take care of all the technical stuff for you. All you have to do is download the plugin or app and install it on your website.
Open source API: If you use a crypto platform with an open source API, you can integrate it with your website using custom HTML code. This approach provides better control over functionality and appearance. Open source API solutions allow you to customize the payment interface to your unique preferences.
Accepting Bitcoin manually via QR codes. Customers scan your QR code with their digital wallet app. The information with your bitcoin address and the requested payment amount should autofill. To verify the transaction’s legitimacy, the customer enters their password (a private key). The transaction is added to the public ledger to be completed by users around the world running special computer programs.
Invoices. To send a crypto invoice, copy your wallet address and paste it into your invoice. Send the invoice to your client along with the payment amount. When your client opens their wallet, they copy your deposit address and transfer this amount.
Payment gateways. Cryptocurrency payment gateways are transaction mediators between a merchant’s website and the client.

This technology captures, encrypts and transfers payment data from the customer to ensure that the information is passed securely. Then the payment gateway processes the transaction and sends all the information to approve the payment. Once the payment has been confirmed, the payment gateway sends the approved transaction back to the merchant’s website. The merchant then informs the customer that the purchase has been successfully completed.

How to accept Bitcoin payments

Once you’ve decided to start accepting Bitcoin payments, here’s what you need to do.

Step 1: Set up a crypto wallet

Crypto wallets come in different types for different purposes. There are several types to be noted here:

Hot wallets are wallets that are connected to the internet. They offer less security but better accessibility due to network connectivity.
Cold Wallets are wallets that are not connected to the internet. These wallets store crypto assets offline, providing better security. You can store large amounts of crypto assets in cold wallets and small amounts in hot wallets for faster access.

Other factors to look for when choosing a cryptocurrency wallet are:

Number of supported assets
Safety
Integration with other software wallets
Purchase fees (for cold or offline wallets) and transaction fees
Interoperability with other applications for smooth money transfers.

When choosing a crypto wallet, pay attention to the cryptocurrencies with which it works. The more currencies you can accept, the more sales you are likely to make.

Step 2: Choose a way to accept crypto

If you want to start accepting bitcoin payments, one of the easiest ways to do so is to use a bitcoin payment processor. These services act as intermediaries between you and your customers, allowing you to accept bitcoins without having to deal with the underlying technology.

Step 3: Integrate crypto payment features on your website

Once your crypto wallet is set up, it's time to integrate one of the methods to accept crypto online. You can do this by installing plugins on platforms like Shopify, Magenta, and Woocommerce. If you can't find the plugin you need, you can register with a crypto payment gateway. And this is where Hashbon React steps in.

With Hashbon React, you'll be able to accept bitcoin and other crypto payments from your customers and get paid in your preferred currency, whether it's in crypto or not. The best part is that there's no need for a complicated sign-up process. Just sign up, setup your account and you're ready to go. We'll also provide a dashboard for managing payments that includes stats for every transaction.

What to Look for in a Crypto Payment Processor

When looking for a crypto payment processor, it’s important to pay attention to the features that are most important to your needs. Some things to look for include:

Supported Countries. Digital asset regulation arouses a wide variety of controversial opinions throughout the world. Not every country allows the use of cryptocurrency. With different laws, make sure you choose a payment processor that supports the countries you do business in.
Payout Frequency. Payment processors vary in payout frequency. Some do this daily while others can take 3-5 days before processing your payment.
Transaction Fees. Crypto payment processors can charge a variety of fees, such as a processing fee, a conversion fee, or a withdrawal fee. Make sure you understand the fees charged by any processors you are considering.
Security. The safety of your business and its customers should be a top priority. Make sure the provider you choose is reliable and clear about itssafety measures.
Customer Support. Whenever you deal with digital transactions, the level of customer support that the processor provides is very important. If the service fails to load, or you have issues with setting up, you should have an opportunity to ask for help immediately.

Accepting Other Cryptocurrencies as Payment

Bitcoin is the most famous cryptocurrency, but it’s not the only one. You may want to add some other coins to your list of payment options. For example:

Ethereum (ETH) is the second largest cryptocurrency by market capitalization after Bitcoin. Ethereum runs its own blockchain, based on smart contracts.
Litecoin (LTC) is very similar to Bitcoin, though with a much lower price. Litecoin’s transaction speed is 2.5 minutes, which is four times quicker than Bitcoin’s.
Dash (DASH) is cryptocurrency based on an open-source peer-to-peer network with a strong focus on decentralization. It offers instant and private transactions, and a self-funding model to ensure that the Dash network can grow without outside interference.
Zcash (ZEC) offers all of the security benefits of Bitcoin, but with improved privacy features. It encrypts the amount, sender, and recipient in all transactions. This way no one can see what the transaction was for unless they have the correct view key.

Conclusion

Cryptocurrencies like Bitcoin, Ethereum, and Litecoin are becoming more and more popular. Many business owners are wondering if they should start accepting them as online payments. The answer is: it depends.

In order to make the right decision, you need to be familiar with cryptocurrency and how it works. Next, you’ll need to decide on which currencies you want to accept. And finally, you’ll need to make sure your website is set up to facilitate these payments.

However, you should beware of underlying risks such as the volatility of cryptocurrency prices, and the fact that not many people yet know how to use crypto, so you may not be able to process as many transactions as you would with regular payments.

If you're comfortable with the risks, it could be a great way to attract new customers and sales. With a deep analysis of solutions the market has to offer, such as crypto payment gateways, it would be much easier to grow your business potential.

Frequently Asked Questions

Can my business accept Bitcoin?

If your country legally allows the circulation of Bitcoin, your business can certainly accept bitcoins. All you need is a cryptocurrency wallet and integration with your website.

How do I accept crypto payments without KYC?

You can accept KYC non-compliant crypto payments through a cryptocurrency payment gateway as they encrypt data when processing transactions. You can also accept anonymous crypto payments.

Which cryptocurrency is accepted as payment?

Among the wide variety of coins, you can accept any currency you prefer, but not every payment service accepts any cryptocurrency. The most popular cryptocurrencies are supported almost everywhere, but if you are interested in accepting the lesser known ones, you should do some more research.

How to Accept Bitcoin Payments on Your Website【Ultimate Guide】