How to Accept Crypto & Bitcoin Payments as a Small Business
Meaghan has provided content and guidance for indie retailers as the editor for a number of retail publications and a speaker at trade shows. She is Fit Small Business’s authority on retail and ecommerce.
Anna’s experience in business and finance led her to work for a US risk mitigation company in Singapore. She has contributed to POS and payments topics in the Retail section across Fit Small Business.
This article is part of a larger series on Payments.
Forward-thinking small businesses that want to set themselves up for sustainable success may consider accepting bitcoin and other cryptocurrency payments. At present, up to 30% of cryptocurrency owners already use crypto for purchases, with most planning to make purchases with crypto in the future.
Here is how to accept crypto and other bitcoin payments in four steps:
Step 1: Understand Cryptocurrency Regulations
Cryptocurrency is a decentralized digital currency built on, secured with, and encrypted by blockchain technology. Unlike traditional physical currencies like the US dollar, cryptocurrency is not regulated by a government or other entity. It exists only online.
Cryptocurrency is a highly debated topic, and the legalities of offering crypto as a payment method for your business will continue to change. However, the basics are as follows:
- State laws for cryptocurrency investors: To accept crypto payments, you will need to have your own crypto account, which, by default, makes you an investor. This means you are expected to comply with the cryptocurrency regulations for your state.
- Review the policy of your cryptocurrency platform: Visit your service provider’s website to check for supported countries and review its user agreements. Not all cryptocurrency platforms are legal in the US, even if users can convert (or withdraw) their savings in US dollars. CoinGate, for example, is only legal to use in some states.
Although cryptocurrency owners can trade it for goods and services, crypto is often treated as an investment opportunity. It wasn’t until 2014, when PayPal gave online merchants the ability to accept Bitcoin payments, that small businesses began taking a serious look at cryptocurrency as a potential alternative payment method.
Step 2: Set Up a Crypto Wallet or Crypto Gateway
You first need to decide whether you want to receive your crypto payments as cryptocurrency or fiat money. Once you have chosen a platform, you’ll need to go through the steps to create and set up your account. Specific steps vary depending on the provider, but you’ll likely need to start by downloading the software, whether that’s from a desktop or mobile app.
Fiat money: Government-issued currency, such as the US dollar, that is not made with or backed by a specific commodity, such as gold.
The general guideline for choosing the type of cryptocurrency app is as follows:
You need a: | If you: |
|---|---|
Crypto Wallet | Want to collect, store, and use cryptocurrency for your business or personally |
Crypto Payment Gateway | Want to accept crypto payments but have them converted to traditional fiat money |
Many popular solutions, like Coinbase and BitPay, have both wallet and gateway functionality.
Step 3: Integrate Crypto Payments Into Your Online Checkout
Now that you have your crypto wallet and/or gateway set up, it’s time to add crypto into your website.
You can integrate your crypto wallet on your website and enable it as a payment option in the checkout process. There are two main approaches to doing this.
- Open source API: If you use a crypto platform that offers an open source API, as you’ll often find with self-hosted wallets, you can integrate this with your website using custom HTML code. The upside here is that you have more control over the look, feel, and functionality, though it requires technical resources that not every small business can access.
Coinbase WalletSDK allows developers to integrate Coinbase to browser- and mobile-based checkouts. (Source: Coinbase)
- Plugin/app: Depending on your ecommerce platform, there may be an integration available. Crypto integrations make it easy to set up because they take care of all the technicalities for you. It’s simply a matter of downloading the plugin or app and installing it on your website.
Overstock uses BitPay plugin to accept bitcoin as a payment method on its online checkout.
For your online stores, the ease of adding a crypto payment gateway will depend on the ecommerce platform you use. For example, while both WordPress and Shopify come with built-in integration for cryptocurrency payments, Shopify has an easier step-by-step guided setup process compared to WordPress.
Step 4: Offer In-person Crypto Payments
In-store shoppers can also reap the benefits of being able to pay in cryptocurrency—if you let them. There are many options to use some of the above platforms to handle in-person crypto payments. Consider adding a crypto-compatible QR code scanner or NFC terminal for in-store checkout. If you use a mobile POS, you may also be able to integrate crypto payments with your existing system—if it supports them.
Use the BitPay Checkout app to display QR payment links for in-person payments. (Source: BitPay)
The Latest in In-person Crypto Payments
Though crypto is still relatively new, it has been on the payments industry’s radar for some time, and leading payment services providers have been developing methods to allow merchants to accept cryptocurrency payments.
- Square users can now receive bitcoin payments through the Cash App’s latest integration.
- The recent upgrade to PayPal’s payment app now allows users to hold and then convert crypto to USD to pay for purchases.
- Brick-and-mortar shops can now integrate their POS systems with NOWPayments to start accepting crypto for in-person transactions.
- Coingate is launching a POS app that supports more than 70 cryptocurrencies.
Costs of Accepting Crypto Payments
Generally speaking, accepting crypto payments is a lot more affordable than accepting credit cards. The standard payment processing transaction fee for crypto payments is about 1%, making it much more affordable than the average credit card processing fee (3%) and even some ACH direct deposit fees (1%–1.5%).
Some providers offer even lower transaction fees (CoinPayments is just 0.5%), while others add a network fee on top of the 1%. Potential additional fees include currency conversion fees and withdrawal fees.
Here are some examples:
Cryptocurrency Platform | Merchant Fees |
|---|---|
 | 1% |
 | 1% |
 | 0.99% (free for nonprofits) |
Pros & Cons of Accepting Bitcoin & Other Crypto Payments
You could argue that accepting cryptocurrency can boost average transaction value and encourage shoppers to make larger purchases and spend more money, though the data varies depending on the demographic, such as the consumer’s age.
That being said, there are a number of benefits and challenges that are more straightforward when it comes to accepting crypto payments in your small retail business.
| PROS | CONS |
|---|---|
| Capture more sales by accommodating more payment types | May be subject to capital gains tax |
| Fast and easy online transactions, which helps to get better conversion rates | Limited regulation |
| Low payment processing fees; competitive with other payment types | Volatile and unpredictable valuation and exchange rate |
| No risk of chargebacks | Susceptible to cybersecurity threats |
| Allows for simplified international selling and currency conversion | Requires additional tech stack and setup |
In addition to appealing to crypto owners, since cryptocurrency is unregulated, it appeals to cannabis and other high-risk businesses that banks and traditional merchant accounts decline to work with.
Accepting Crypto as a Business Frequently Asked Questions (FAQs)
How do I accept crypto as a merchant?
To start accepting crypto payments, you need to:
- Set up a cryptocurrency account
- Integrate your cryptocurrency account to your online store or in-store POS system using a crypto wallet or payment gateway
Find the best cryptocurrency payment gateway for your business.
Is it safe to accept cryptocurrency payments?
Generally, yes.
- Cryptocurrency payments are safe from chargebacks: You don’t need to worry about fraudulent transactions or chargeback fees.
- Protection from sudden change in value: There are crypto payment gateways that offer a number of ways to protect your cryptocurrency from changes in valuation during transactions.
How much does it cost to accept cryptocurrency payments?
The average transaction fee for accepting cryptocurrency payments is 1%, which is considerably lower than credit card processing fees.
Bottom Line
While cryptocurrency is still largely viewed as a futuristic trend that’s not here to stay, others are going all-in on the new digital currency. Data shows that nearly half of US merchants have added cryptocurrency in their list of payment method options, yet only a very small portion of these are small businesses. Regardless of which camp you’re in, accepting crypto as payment as a small business can help boost conversion rates and keep your business ahead of the competition. Cryptocurrency is becoming more widely accessible, and early adopters are in a unique position to reap the benefits early on.
