Bitcoin is becoming increasingly “mainstream” by the day. It is a fact! It is the currency of the future and it can bring businesses a great positive outcome since it has an incredible potential to greatly reduce costs associated with transactions. Throughout this article we will give you some hints to help your business in accepting Bitcoin.
So, why should you Start accepting Bitcoin?
There are 5 main reasons that drives businesses to integrate Bitcoin as a payment method:
- Lower Transaction fees: Bitcoin can reduce credit card processing fees to less than 1 percent
- No Chargebacks: Bitcoin transactions are irreversible, so it automatically prevents having chargebacks or returns, like what happens with credit cards and other Banking transactions.
- Facilitates International Transfers: Small online retailers and other businesses avoid selling their wares and services internationally because of expensive cross-border transaction fees. Bitcoin relieves the steep cost of international transactions by enabling easier, faster and cheaper cross-border payments.
- Fraud Prevention: Bitcoin provides a level of identity-theft protection that credit cards simply and other banking services are not able to offer. Once you receive payment, it will never be disputed.
- Faster Payments with less cost: Having funds immediately available is critical for the survival of many small businesses. Accepting Bitcoin payments have the ability to put funds immediately available much faster than with credit card payments.
Legislations for Accepting Bitcoin
If you operate a regular business and want to start accepting digital currencies, such as bitcoin or any other virtual currency you will first need to consider the legal aspects of doing so. Before starting the process we strongly advise you to collect all the needed information at Bitlegal or take a look here at the Legality of Bitcoin by Country. If possible, try to gather this information with the help of a Lawyer and an accountant.
Ask yourself how you would handle a cash transaction. Do you accept cash transactions? Do you normally pay taxes on cash transactions? The answer for Bitcoin should probably be the same.
Starting to Accept Bitcoin
To start accepting Bitcoin at your small business you will also need to consider the best option because this adequate to the type of business you are operating. Currently there are several ways in which businesses can start accepting bitcoin and you should opt for the simplest to keep your accounting simple as possible.
The simplest way to start accepting Bitcoin is through Payment processors. It is also possible for you to start accepting Bitcoin by yourself with a Blockchain.info account or with Multibit. However, you will be fully exposed to bitcoin’s volatility so it is recommendable to start accepting bitcoin via Payment Processors.
Accepting Bitcoin on your own
If you own a very small business and you’re not yet sure if the integrating bitcoin will suit you, you can try taking bitcoin payments on your own.
First you will need to prepare an account where you will be able to exchange Bitcoin. You should setup an account with one of the popular exchange websites. The best known 5 exchanges are BitStamp, Bitfinex, BTC-E, Kraken and Huobi.
Second step will be to download the wallet client software. In our example we will use Multibit, since it is the most common bitcoin desktop wallet client but you are free to use other desktop clients such as Electrum or Armory since the process is very similar. MultiBit is an easy to use bitcoin client that allows you to send or receive bitcoin payments. The major advantage of MultiBit is that you can use it without having to download the entire bitcoin blockchain. You can download MultiBit here. The installation shouldn’t take more than few minutes and after you’re done you’ll be able to send or receive btc payments from anyone with a bitcoin address.
After having the Multibit Desktop client installed you will have access to your wallet; here you will be able to find your wallet address at the receiving section, and you will be also able to generate several other addresses. If you are going to use a desktop client to hold your funds we strongly advise you to be very cautious with security. Take security as a serious matter and always use strong passwords to encrypt your wallet otherwise, sooner or later you will get hacked.
Peer-to-Peer payments (P2P)
Peer-to-Peer payments (P2P) is an online technology that allows customers to use the Internet or a mobile phone to transfer funds from their bank account or credit card to another account. The increased acceptance of online banking, mobile banking and e-commerce by consumers has paved the way for greater use of this technology.
How it works
P2P payments basically work in two ways. One of them is based on the Paypal approach; users connect their secure accounts with a third-party vendor, allowing their bank account or credit card information to be used to transfer and accept funds. Users are generally identified by their email address and can send funds to anyone who is a member of the network. Using the third party’s website or mobile application, individuals will be able to send or receive funds.
Customers can also use an online interface or mobile application provided by their bank or financial institution to transfer funds. The recipient can either be assigned by their phone number or email address.
Payment Processors & Merchant Services
One of the first steps, when introducing bitcoin to your business is to find the best suitable payment processor or the best Bitcoin merchant solution that enables accepting Bitcoins. To make things easy and to protect yourself against the high volatility that affects Bitcoin is to find a partner that can manage the process by allowing you to accept bitcoin payments but instantaneously converting it into FIAT currency. This way, you will be getting your payment in national currency without even having to deal directly with bitcoin. Bellow you will find a list of some of the most well-known Payment Processors:
- BitKassa – Merchant accepting Bitcoin solution,
- BitPagos – Bitcoin and Credit Card payment processor
- BitPay – Bitcoin payment processor with mobile checkout solution
- Bitbay – Bitcoin payment processor with mobile checkout solution
- BitPOS – Bitcoin payment processor for online and brick and mortar stores
- Coinbase – Offers payment buttons, checkout pages, shopping cart integration, and daily cash out to USD.
- Coinify – Bitcoin Web Payments, Mobile Checkout, In-store Bitcoin Payments and Bitcoin Invoicing with recurring billing in bitcoin.
- Coinkite – Full-reserve banking, payment buttons, invoice pages, hardware POS terminals, and Debit-Cards.
- GoCoin – International payment gateway and processing platform for Merchants
- XBTerminal – Brick-and-mortar hardware POS terminals with payment processing integrations.
Bitcoin Point-of-Sale POS Hardware Terminals
Point-of –Sale (POS) Hardware terminals will be crucial to help you manage and receive payments. Point-of-sale (POS) systems for small businesses such as retail shops, cafes and food establishments will offer merchants the ability to easily accept bitcoins as payment. With custom hardware you can integrate with existing registers and point-of-sales solutions. If you run a small shop, customers can pay using hardware terminals, touch screen apps or simple wallet addresses through QR Codes.
The List bellow shows some of POS solutions for accepting Bitcoin
- BitPay – Mobile Checkout
- Coinify – Bitcoin Point of Sale
- Coinbase – Point Of Sale for Android
- co.th – Mobile Bitcoin Point of Sale for Thailand
- BitPOS – Merchant POS solution for Australia
- BitKassa – Bitcoin on mobile phone, tablet, computer; converts to Euro/Bitcoin
- Coin Of Sale – device-independent Bitcoin POS payment system
- CoinPip – Bitcoin Payment Solution for Android
- Payful – Point of sale, shopping cart plugins and API. Supports USA, Europe and Canada.
- Pocket –Bitcoin Point of Sale for Canadians, with exchange integration
Many point-of-sale terminals are designed around the ability to support multiple applications on the same terminal.
Adding a private label gift card program from a provider who specializes in this, can be a solution and give you an extra channel of income. A private label gift card service provider can simply provide a solution that keeps track of the balance on the cards on your behalf, including features that allow users to check their balances by phone or by web. Such a solution, of course, is also what makes the cards swappable through the card reader. If your business sells gift cards or gift certificates, you may find that the easiest way to accept Bitcoin is to accept it only for the purchase of gift cards, and then require the gift cards to be used for actual purchases of goods or services.
Promoting Bitcoin Payments
Once you are done with the integration it will be advisable to promote the new payment method the best way you can. This will be very important since you will need to attract customers and have them to know that payments can also be made using Bitcoin.
Whether your business is brick and mortar or online, you will need to notify your customers about an option to pay with bitcoins and that your business is accepting bitcoin. A sign on the bottom of your website or near other acceptable forms of payments would be greatly valuable to inform your customers that you accept bitcoin. If you have a company blog, writing a blog post explaining why you decided to start accepting Bitcoin, what it means to you and your business, and how this idea could contribute to our general well-being usually brings a lot of publicity and positive feedback within the web. If you have an office, or you run a physical business, sticking a noticeable sign near the entrance would be nice and will undoubtedly bring a positive hype. You can find some logos especially designed for this throughout the web. So, go ahead and find one that you like. I you have a small retail shop you will need to print them and spread them across your store.