Whether a small or a big business, digital payments play a vital role in creating sustainable success. For instance, accepting crypto payments offers your customers more payment options and could result in remarkable financial growth. And since crypto payments have lower transaction fees than credit cards, most customers would prefer to use this payment method. Check out the steps on how to accept crypto payments.
What is Cryptocurrency?
Cryptocurrency is a digital currency that allows peer-to-peer transactions in which the transactions are verified and maintained by a decentralized system instead of a centralized authority. Most cryptocurrencies are encrypted by blockchain technology (a public ledger) and accessible to anyone.
Most people confuse between Bitcoin and cryptocurrency. Well, Bitcoin is the most popular and commonly used cryptocurrency. Other examples of cryptocurrencies include Bitcoin Cash, Ethereum, Litecoin, Dogecoin, Solana, etc.
Should You Accept Crypto Payments?
Cryptocurrencies have become more popular, and merchants and retailers are starting to accept Bitcoin payments in their businesses. According to a 2020 study, 36% of small businesses accept crypto payments. That means business owners have started seeing the benefits of cryptocurrency payments.
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More businesses are projected to start accepting Bitcoin payments as years go by, and for your business to keep up with the competition, I think it’s time to learn how to integrate crypto payments into your business. Once you have decided to accept cryptocurrency, the payment processing is quite to set up.
How to Accept Crypto Payments
Step 1: Understand crypto payments
Cryptocurrency is a digital currency that allows peer-to-peer transactions. Though crypto owners can exchange it for goods and services, it’s often perceived as an investment, something you hold for capital gains when the value is high.
Image Source: coinbase.com
When it comes to peer-to-peer transactions, the crypto is transferred from one digital wallet to another. In contrast, traditional debit and credit card payments are processed by your customer’s bank, the card networks, as well as your bank.
Step 2: Choose a cryptocurrency merchant/processor
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There are multiple e-commerce sites and website builders offering crypto payment methods online. Examples include Shopify, WooCommerce, Magento, Wix, WordPress, and Squarespace. The best payment processors to choose from are BitPay, CoinBase Commerce, PayPay, and Blockonomics.
Step 3: Set up a crypto gateway or crypto wallet
Before setting up a crypto wallet or gateway, choose whether to receive your crypto payments in cryptocurrency or fiat currency. That means you will need to set up a crypto gateway if you accept Bitcoin payments and want them converted to fiat currency. Conversely, if you want to receive, store and use crypto for personal or business purposes, you’ll need to set up a crypto wallet.
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The good thing with most popular payment processors, such as BitPay and Coinbase, is that they provide wallet and gateway functionality.
Step 4: Integrate the crypto merchant into your online checkout
After setting up your crypto wallet or gateway, it is time to integrate cryptocurrency payment on your website. Using a cryptocurrency platform with an open source API, such as self-hosted wallets, you can integrate it with your online checkout using custom HTML code.
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Conversely, some e-commerce platforms and payment processors such as Shopify, WooCommerce, Magenta, BitPay, and CoinBase Commerce have crypto integrations. These integrations make it convenient to set up because they handle all the technical details for you. Then, simply download and install the plugin or app on your online checkout.
Step 5: Accept crypto payments.
You can accept crypto payments in several ways, including invoicing, accepting Bitcoin in person, or adding a crypto payment option to your online checkout. Accepting crypto payment will be easy as enabling a plugin; however, it depends on your digital wallet. Your customers will see an option to pay in Bitcoin when they get to the payment section of the checkout process.
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On the other hand, if you opt for in-person transactions, the platform will generate QR codes for you. Customers will have to scan the QR code with their digital wallet app. Then, the requested payment amount will autofill, and payment will be completed.
Advantages of Accepting Cryptocurrency Payments
1. Lower processing fees
Cryptocurrency processing fees are often less than 1% or even 0%. In contrast, fees for bank cards, merchant credit cards, and other payment processing services range between 1.5 and 3.5% on average. Besides, some even charge a fee per transaction. If you accept crypto payments, especially Bitcoin, you can avoid paying fees entirely by accepting direct payment into your wallet.
2. Quick payment processing
Cryptocurrencies (as mentioned earlier) are decentralized and not controlled by a single entity. Therefore, the only limitation to transferring funds is the time required for the blockchain to validate the transaction. Conversely, credit cards, bank cards, and other payment processing services often delay funding by up to 72 hours.
3. Global commerce
If you accept crypto payments, you will enjoy global commerce. That means you can receive payments from customers across the world. However, we recommend checking your local laws for legal guidance on cryptocurrencies.
4. New customers
Adding cryptocurrency payment options exposes you to a larger pool of potential customers. Research shows that up to 40% of customers who pay with cryptocurrency are new to the merchant and spend virtually twice as much as bank card and credit card users.
5. Brand identity
With technological advancement, cryptocurrencies have become the key to monetizing the Metaverse. Most brands are already developing virtual stores on the Metaverse. And crypto-accepting brands are seen as innovative and ambitious. Besides, they are better positioned to bridge the virtual and real-world gap as the Metaverse expands.
Best Crypto Payment Processors for Cryptocurrency payments
1. BitPay
BitPay is one of the leading companies that allows businesses to accept crypto payments. The platform is a one-stop shop for everything; Bitcoin, debit cards, offering wallets, and accepting Bitcoin payments. In addition, it offers various tools to make accepting crypto payments easy, including hosted checkout, invoicing and Quickbooks, payment buttons, and Shopify integrations. Besides, it’s available through app plugins on Shopify, Wix, WooCommerce, and Magento.
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With BitPay, you can accept Bitcoin payments online, by e-mail, or in person. Besides, you don’t have to worry about crypto price fluctuations; BitPay has a feature that protects your payments, ensuring the amount remains the same.
Furthermore, BitPay charges a 1% transaction fee which is quite low. It also allows clients to settle up in local currency cryptocurrency. However, you will be charged a miners’ fee and a network fee for Bitcoin trading.
2. Blockonomics
Blockonomics is another cryptocurrency merchant you can rely on as a new or a small business. It integrates with ecommerce platforms and popular website builders, including Shopify, WordPress, Wix, and Squarespace. Besides, the platform has Bitcoin Pay buttons and peer to peer invoicing feature, which allows you to create invoices directly in your wallet. Also, a wallet watcher feature keeps track of all your transactions.
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Using the platform for the first time was easy since it has a user-friendly design and video tutorials on integrating crypto payments into your online store. Also, the support is clear and all-inclusive.
Blockonomics charges a 1% merchant fee. So, for instance, if you receive 0.085BTC, the platform will only deduct 0.0085BTC from your wallet. Another reason I recommend Blockonomics is that it provides the first 20 transactions for free.
3. CoinBase Commerce
CoinBase is one of the leading marketplaces for purchasing and selling Bitcoin and other cryptocurrencies. Besides, it has a Commerce product that allows businesses to accept crypto payments more easily. In addition, the company has a great app compatible with most e-commerce platforms so that you can accept cryptocurrency instantly.
Image Source: commerce.coinbase.com
The platform also has the necessary tools for any business that wants to accept cryptocurrency payments. The tools include; payment buttons, invoicing, hosted checkout pages, and e-commerce integrations with Shopify and WooCommerce.
CoinBase Commerce provides the business with granular asset control. Besides, it offers a high-security option to protect you against currency volatility. Moreover, it has flexible pricing options that offer something for all businesses.
4. PayPal
PayPal is unquestionably one of the world’s largest online payment companies. It has recently entered the cryptocurrency space allowing consumers to use crypto to pay merchants on the PayPal network. Research shows that more than 29 million online merchants use PayPal.
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Conversely, when paying merchants, customers with PayPal wallets can convert Bitcoin, Litecoin, Ether, and Bitcoin Cash into fiat money such as US dollars and euros. Of course, that means you won’t directly accept cryptocurrency, but it will allow more customers to purchase your products and services using Bitcoin, Bitcoin Cash, or other digital currencies.
5. TripleA
TripleA is a cryptocurrency processor that integrates with Shopify, OpenCart, and WooCommerce, and provides a convenient merchant dashboard where you can reconcile accounts, track orders and payments, and perform refunds in a single place.
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Moreover, TripleA provides a developer-focused approach to accepting crypto payments, with a wide range of options, including e-commerce, invoicing, remittance, and point-of-sale.
Factors to Consider When Choosing the Best Crypto Payment Processor
1. Transaction/processing fees
One thing you need to keep in mind when choosing a cryptocurrency payment processor is the transaction fees. The good thing about Bitcoin and other crypto payments is that they charge lower transaction fees than the standard payment fees; however, you should still shop around to ensure you get the best deal.
2. Security/ fraud protection
The security of the transactions between you and your customers is crucial. Therefore, when looking for a crypto payment gateway, ensure your business is protected from fraud. In addition, ensure the payment processor keeps up with site maintenance. Also, ensure the payment processor’s site or app can automatically install new updates and regularly create encrypted backups of your wallet.
3. Frequency of payment
As a business owner, you would prefer a payment processor that has a convenient payout frequency. For example, some cryptocurrency payment processors pay out daily, while others can take up to five days to process your payment.
4. Supported countries
Before choosing a crypto payment gateway, remember that not all countries accept crypto payments. For instance, in China, Bitcoin and other cryptocurrency payments are banned. So, with different rules in different countries, it is critical to go for a payment processor that is allowed in the countries where you do business.
5. Customer support
Customer support is a crucial factor that you can’t ignore. If you have issues with setup, a transaction goes wrong, or the service goes down, you want a payment processor that you can contact someone right away.
Frequently Asked Questions on How to accept Crypto Payments
1. Can you accept cryptocurrency payments through PayPal?
Yes, PayPal supports native cryptocurrency transfer between PayPal and other digital wallets and exchanges. The good thing with PayPal is that it only charges 0.50% of the transaction value.
2. Can you transfer money from Coinbase to PayPal?
You can conveniently withdraw funds from Coinbase accounts using the PayPal app. Also, the withdrawal process is fast.
3. Does my cryptocurrency continue to grow in a wallet?
Yes, and vice versa. The value of your cryptocurrency will fluctuate when stored in a wallet. Likewise, the value of cryptocurrency can change over time, regardless of whether it is stored in a wallet or exchange. However, payment processors such as BitPay and CoinBase Commerce offer protection against crypto fluctuation.