A Complete Guide To Accepting Bitcoin and Cryptocurrencies as Payments

Bitcoin (BTC) is the world’s first digital currency and has enjoyed worldwide adoption since its inception in 2009. Classified by the IRS, CFTC, SEC, and other agencies as a commodity, Bitcoin is a cryptocurrency that is processed and recorded over a blockchain network. With more people using Bitcoin every year, businesses are beginning to adapt and recognize crypto as a legitimate payment method. But the problem is that cryptocurrency is a complicated topic for most people. Accepting Bitcoin payments may be challenging if you don’t know anything about how cryptocurrencies work. We’ve put together this complete guide to help your business start accepting crypto payments.

How To Accept Bitcoin and Other Cryptocurrencies as Payments

Ready to integrate cryptocurrency payments into your business model? This step-by-step guide will help you get started.

1. Understand the Basics and Regulations

You can’t start accepting Bitcoin payments without understanding what cryptocurrency is and how it’s different from traditional “fiat” currency. With traditional fiat currency, value is tied to the economy and affected by inflation and geopolitical factors. Cryptocurrencies are much different. They are decentralized, meaning they have no central issuer. This makes Bitcoin a store of value. It’s given monetary value by its users based on supply and demand through crypto exchanges. Since Bitcoin has no single issuer, it’s not susceptible to inflation or foreign interference. For example, the U.S. dollar can decrease in value based on monetary policies set by the federal government. Monetary policy doesn’t affect cryptocurrencies in this way. As a result, many governments have attempted to pass legislation to regulate cryptocurrencies. Some have succeeded—others are still working through the process. So, if you’re going to accept crypto payments, you’ll also need to understand the specific regulations that exist in your country. If you operate in a crypto-friendly region, there should be lax regulations for accepting and storing Bitcoin payments. However, if you operate in a country resistant to cryptocurrency, accepting payments may be next to impossible. There are no uniform international guidelines for using Bitcoin. Therefore, as a small business owner, you’ll need to research the laws in your specific region.

2. Set Up a Bitcoin or Crypto Wallet

Once you’re familiar with your region’s crypto regulations, you’ll need to set up a crypto wallet. A crypto wallet is where you’ll digitally store your crypto tokens. There are two types of Bitcoin wallets:

• Hot Wallets: These cryptocurrency wallets are software-based and keep your cryptocurrencies safe and secure through a remote server.
• Cold Wallets: These are hardware devices you can use to store your cryptocurrencies offline.

You can also use a white-label wallet built by another provider to store your Bitcoin. Whichever option you choose, you’ll receive credentials to use your wallet. It’s essential to keep these credentials safe and implement a role-based access control (RBAC) system to ensure only authorized personnel can access your funds. Before choosing a crypto wallet, it’s best to check out product reviews first. This way, you can determine how safe a prospective crypto wallet is, what its features look like, and if it’s the perfect solution for your business.

3. Choose a Payment Processing Provider

There are two ways you can accept crypto payments. You can either process cryptocurrency payments directly to your wallet or use a payment processor. Accepting payments directly to your wallet isn’t a scalable solution if you’re running a growing business. Crypto wallets, on their own, don’t provide users with a lot of integrations for managing online payments. They’re most used for buying and selling cryptocurrencies for investing purposes. If you’re running a business, you’ll need a more stable solution. A crypto payment processor can offer:

• Simple payment processing: A crypto payment gateway takes a transaction and quickly converts it into the fiat currency of your choice for a small transaction fee.
• Fewer risks: Payment processors mitigate the risk of market volatility. They accept payments on your behalf and deliver the expected amount directly to you, regardless of price fluctuations in the crypto market.
• Full suite of integrations: Cryptocurrency payment processors offer multiple integrations, such as eCommerce plugins, point-of-sale (PoS) systems for brick-and-mortar stores, and invoicing services to keep track of your finances.

The key to selecting the best crypto payment processor is to choose a solution with competitive transaction fees and plenty of integrations to scale your business.

4. Integrate Bitcoin Payment Options

Once you choose a payment processor, you’ll be able to integrate this service into your PoS, website, e-commerce platforms, invoice protocol, and mobile app. If you’re using a PoS, you can create protocols to efficiently accept different kinds of cryptocurrencies. But don’t forget to train your staff on how to navigate this integration and accept crypto payments. Your accounting team should also be up-to-speed on how to classify cryptocurrency assets for tax purposes.

5. Allow Customers To Use Bitcoin In the Checkout Process

Finally, if you’re running an online store, you’ll need to allow customers to use Bitcoin in the checkout process. Fortunately, this process is simple if you're using a payment processor. Your payment processor will provide you with an integration so you can set up your store to accept crypto payments, whether you’re using WooCommerce, Shopify, or BigCommerce. Once the integration is in place, you can begin accepting Bitcoin payments automatically.

The Benefits of Accepting Bitcoin for Payments

The popularity of Bitcoin and other cryptocurrencies is constantly increasing. In fact, many investors are focusing on Bitcoin ETF funds to diversify their portfolios and break into the crypto market. With that said, here are some great advantages of accepting Bitcoin payments:

Lower Transaction Fees

Bitcoin transaction fees are typically much lower than traditional payment methods, such as credit cards and PayPal. Traditional payment methods are processed via banks, which can charge large transaction fees to make a profit. Bitcoin is a decentralized currency, making it an affordable currency to process as payment.

Faster Settlement Times

Cryptocurrencies are also processed faster than traditional payment methods—typically in minutes, compared to days or even weeks for traditional payment methods. This is a huge bonus for businesses that want to get funds into their bank accounts sooner rather than later—plus, no chargebacks (among other huge incentives for merchants).

Reduced Risk of Fraud

Digital fraud is a major issue for merchants. Large online companies like Amazon, eBay, and PayPal have enacted sweeping data privacy and fraud prevention strategies to make sure merchants can process payments securely. But Bitcoin transactions are irreversible, which means that merchants are less likely to be victims of fraud.

Access to a Global Customer Base

Bitcoin is accepted all over the world, giving business owners access to a global customer base. For example, if you want to accept payments from customers in Japan, you don’t have to worry about converting Yen (¥) into USD. Through a crypto payment processor, this conversion occurs instantly with lower exchange rates.

Bitcoin vs. Credit Card Payments

Credit cards are one of the most common payment methods in the world. Let’s see how they stack up against Bitcoin for payments:

• Processing Fees: Bitcoin has lower transaction fees than credit cards.
• Settlement times: It takes less time to process Bitcoin transactions than credit card payments, thanks to the Lightning Network—which uses blockchain smart contracts to remove the financial intermediary, enabling faster transactions.
• Fraud protection: Both payments have superb fraud protection. However, Bitcoin transactions are irreversible and can only be refunded by the receiving party. Whereas senders can cancel or chargeback credit card payments.
• Acceptance: Credit cards are accepted around the world, while Bitcoin is only accepted in certain countries.

Accept Bitcoin as a Payment for Your Business With AlphaPoint

Bitcoin’s popularity is only expected to rise, and businesses need to adapt to this modern currency to grow their audiences and accept payments from customers in different countries. Still, implementing this change can be challenging if you don’t know where to start. That’s where AlphaPoint comes in. With AlphaPoint’s solutions, you can help your customers buy, sell, hold, transfer, and transact in Bitcoin and other digital assets. The El Salvador government even partnered with us to develop the Chivo Wallet, a crypto solution for storing and using Bitcoin at a national scale.If you want to explore how we can help you integrate crypto, book a demo today.