Accepting Bitcoin Payments: What You Need to Know

Although digital currency is not mainstream, several companies are accepting Bitcoin payments. Now, you might be wondering, should your business do so too? Before concluding, you need to consider your brand’s goals. Next, you need a plan on what to do with your digital currency gains. 

Bitcoin Overview

We need to start by defining digital currency. In a nutshell, Bitcoin is the most well-known cryptocurrency. People can use it to buy products and services, but Bitcoin can gain or lose value like stocks. During the pandemic, a number companies have turned to cryptocurrency to store cash reserves. Let’s say that Bitcoin was treated as a safety net amidst the uncertainty and panic of the global problem. 

Most cryptocurrencies, along with Bitcoin, are considered to be “immune” from inflation. Most people believe there is a fixed supply, and it’s far from the government’s manipulation. However, its overall value is highly volatile, so it’s best to know the risks of using Bitcoin. 

Bitcoin Payments and Companies

Bitcoin is the most commonly used cryptocurrency that various companies accept as payment. Meanwhile, the second-largest crypto is called Ether, and it’s slowly gaining its ground. For companies that have worldwide customers, adopting Bitcoin payments is a way to avoid the following inconveniences: 

• Transaction fees of banks
• Long processing time of payments
• Added task of converting payment into a different currency

To get started using Bitcoin payments in your company. First, you need a Bitcoin wallet. It allows you to purchase, store, and sell cryptocurrency. Also, Bitcoin wallets come with a secret number that only allows the holder to access their account. Another option is getting a “hardware wallet,” which involves either writing down the keys or keeping them on a hard drive. You can go for this option if you don’t trust the safety of online storage.  

As for companies, it’s best to sign up with a crypto exchange such as Lumi Wallet or Coinbase. Both can store the “keys” with a third-party server. If you work as an online merchant who wants to accept Bitcoin payments, eCommerce platforms are partnered with payment processors.

 For example, Etsy and Shopify have partnered with the following: 

• Coinbase Commerce
• Bitpay

Meanwhile, business owners can also directly create an account with Coinbase Commerce and other payment processors available online. The payment processors are free to set up, and it allows merchants to accept Bitcoin payments from customers worldwide directly. 

Caution for Small Business Owners 

Before joining the growing trend for payments, here’s what you need to know about accepting crypto. Ali Hamam, Tahini’s Mediterranean Cuisine vice president, converted all of his business’s reserves into Bitcoin as a hedge for inflation last year. However, he’s not ecstatic about the payment method of the currency. 

He sighted that his company is experiencing a lot of cons involving Bitcoin payments. It includes the restaurant’s expenses that often involve non-digital money. The next problem he encountered is about the public’s awareness. It turns out, 95% of their customers haven’t even heard about Bitcoin.  

Here are other issues you should know about accepting Bitcoin Payments: 

• Bitcoin transactions are not reversible. 
• The cryptocurrency has tax implications. Note that back in 2014, the IRS decided to treat Bitcoin as “property” for tax purposes. 
• You need to keep close track of Bitcoin’s value during the day it’s received and sold.
• The amount of attention Bitcoin needs might lead to complications as small businesses encounter several transactions within a day. 
• Your business needs to establish a general rule only to use Bitcoin for big purchases. 
• Each transaction of Bitcoin is anonymous. 
• Bitcoin is illegal in other countries. For example, India and China. 

Final Note

Overall, Bitcoin has a staggering value in the market, so most people think it’s best to stay away from it. In the end, there are pros and cons to accepting Bitcoin payments. Before concluding, be sure to assess your business if it’s ready to take a giant leap. However, it’s best to learn about cryptocurrency before making any significant decisions.