Due to the increasing acceptance of bitcoin and other virtual currencies, many businesses have started offering payment-related services that make and receive payments in crypto. Thanks to bitcoin payment services, you can pay for your coffee at the coffee shop by scanning the shop’s QR code on your mobile phone, or purchase a high-end laptop from a corporation like Dell by making payments in bitcoin.
Cryptocurrencies allow for the transfer of coins between individuals on a decentralized peer-to-peer network, which effectively eliminates the need for outside parties to be involved in the transaction.
One of the benefits of cryptocurrencies is that transactions can occur in cyberspace with no fiat currency having to exchange hands. Such transactions are a lot cheaper than the typical charges from a traditional bank, one of its most attractive features. The value of a cryptocurrency, when it is exchanged for a fiat currency, depends on the current market price, just like a share of stock.
Nowadays you can use crypto currency almost in every sphere of your life and pay for every possible service: buy coffee, order pizza delivery or even pay credit card with bitcoin.
What is a Bitcoin Payment Service?
As a digital currency, Bitcoin can and should be used for its intended purpose – to facilitate the transfer of payment for goods and services. The more merchants that accept bitcoin as a form of payment the quicker cryptocurrencies will take root.
Nowadays, a growing number of businesses are accepting digital currencies, as the available options for payments increase in number and function.
Bitcoin merchant services work similar to the processing of a standard credit or debit card payment service, with some specifics to bitcoins. They enable sellers and businesses to receive payments in bitcoins from individuals for the goods and services being sold or delivered.
When you use your credit card to pay for your groceries at the supermarket, buy a new book on Amazon or pay credit card bill with bitcoin, a payment service system works behind the scenes that enables authentication and processing of your credit card for making the payment.
A similar workflow happened with the bitcoin credit card processing. Bitcoin payment services act as an intermediary layer between the payer and receiver for processing the bitcoin payments that also involves recording the transaction on the blockchain public ledger.
They allow sellers to accept payments in bitcoins both online and at physical locations without the buyer or the seller worrying about the complex background process of bitcoin payments that gets executed in the background.
These days, most of these payment processors facilitate the buying and selling of many other altcoins such as Ethereum, Litecoin, Ripple, and Bitcoin Cash too.
However, the cryptocurrency market is incredibly volatile. The price of bitcoin fell 45% in December 2017, from $20,000 down to just below $11,000. This kind of volatility means that business enterprises of all sizes need to ensure that any payments received in bitcoin are quickly converted into fiat currency to avoid any potential losses.
Payment processors facilitate the immediate transfer of bitcoin and other altcoins into fiat currency. They allow merchants to automate these payments and provide a host of other tools and reports to help make the whole process as convenient as possible.
How to Receive Bitcoin Payments?
All popular bitcoin payment services provide you with multiple options to accept bitcoin payments: solutions for various platforms, like integration with e-commerce platforms (Shopify, PrestaShop, and Magento); for payment through in-store point-of-sale (POS) systems, like Soft Touch and DC POS; and for direct payments from within the popular billing and accounting solutions, like Host Bill and Invoice Ninja. After signing up for bitcoin merchant services, you can start receiving bitcoin payments from the customers from across the globe.
Your customer wants to make bitcoin payment at the checkout and pays the amount at the locked-in exchange rate applicable at the time of transaction. You receive the payment on your bitcoin merchant account. After that the bitcoin payment service instantly converts the received bitcoins into the currency of your choice eliminating the volatility risk (at this step you can also transfer the bitcoins to your own bitcoin wallet instead of exchanging them for fiat currencies). The money gets added to your account, and it finally gets credited to your designated bank account at the decided frequency once the accumulated account crosses the threshold limit.
The service also sends the necessary details in a secure manner to the blockchain network for the transaction to be authenticated and recorded on the public ledger.
Miners, who verify and add the transactions to the blockchain, receive a bitcoin miner fee. This fee does not go to the payment service, but is given to reward the miners for their work done for verification and authentication.
Advantages and Disadvantages
Bitcoin is a faster and cheaper monetary exchange for merchants providing any service or goods. Whether online or in a physical location, using Bitcoin has significant benefits compared to credit card services and other methods of payment.
Bitcoin for B2B payments, especially for international payments, is becoming more and more commonplace. The advantages, however, are also there for B2C e-commerce businesses.
- The fees are extremely lower than traditional payment mechanisms and are paid by the purchaser;
- Payments settle quickly (transaction confirmation usually occurs within 10 minutes or less);
- No possibility of charge back as Bitcoin transactions are final and confirmed on the blockchain (which gives merchants the final word on returns and fraudulent activity);
- Invoices and easy to use Point-Of-Sale (POS) applications for smart phones or tablets;
- Instantly convert the Bitcoin payment to your local currency;
- Businesses that have an international customer base can implement Bitcoin payment methods and never again have to be concerned with currency exchanges and the fees involved;
- The application of blockchain technology in payments makes them more secure. It is also much safer to store Bitcoins rather than large amounts of currencies. Blockchain technology has lots of computing power that secures Bitcoin storage;
- Millennials, fast becoming the largest consumer market, are embracing Bitcoin and blockchain payments solutions as more trustworthy and efficient than traditional payment methods;
- Offer existing customers new ways of paying;
- Gain access to new customers who prefer using cryptocurrencies to pay for goods and services;
- To allow customers a discreet payment method (no embarrassing credit card statements);
- Payments are secure and are retained indefinitely on the blockchain ledger.
- The workers need to be educated on Bitcoin so that they can help the customers. (If you do not have a knowledgeable staff that understands digital currencies, how will they help customers understand and use Bitcoin for transactions?);
- Bitcoin has volatility (its price bounces everyday mainly due to current events that are related to digital currencies);
- Bitcoin is just starting out, and it needs to work out its problems just like how any currency in its beginning stage would need to.
Best Bitcoin Merchant Services
Coinbase Commerce is the easiest and safest way for your business to start accepting digital currency payments. Designed and built by Coinbase, the world’s leading digital currency company. Run your business from anywhere in the world and get access to a global customer base by accepting borderless digital currency payments.
The company provides an HTML widget for easily inserting payment buttons into your website, and plugins for WordPress, WooCommerce, Megento and ZenCart. However, it currently only supports US bank accounts as a funding source. Notable merchants using Coinbase are Dell and Expedia.
It also seamlessly integrates with Shopify to make accepting cryptocurrency easier than ever.
Simply connect your Coinbase Commerce account to start accepting cryptocurrency payments.
And no transaction fees if you keep the funds in BTC. 1% transaction fee for converting BTC to your local account currency, yet only after $1,000,000 in sales.
- Highly customizable checkout experience.
- Mobile-friendly design.
- You can select among embedded widgets, plugins or built a custom integration with their API.
- Two-click payments for Coinbase wallet holders.
- Instant exchange available for payouts.
- Supports invoicing via email.
- Supports microtransactions in bitcoins.
BitPay’s goal is to make it easy for businesses to accept Bitcoin payments. They are the largest Bitcoin payment processor in the world, serving industry-leading merchants on six continents. They’ve created a seamless, secure Bitcoin payment experience used daily by hundreds of thousands of Bitcoin users.
Use BitPay’s retail, ecommerce, billing, and donation tools to accept payments from customers anywhere on earth. You can receive settlement for Bitcoin and Bitcoin Cash directly to your bank account in your own currency, with zero price volatility or risk.
No transaction fees for 30 days. Capped at $1,000 daily and $10,000 annually. And 1% for transactions going above the cap.
- Set custom transaction speed depending on your preferences.
- Two-factor authentication for accounts.
- Invoicing supported in 40+ languages with calculated pricing displayed on an invoice in 150 currencies.
- Bank payouts in Euro, USD, GBP, and five other currencies.
- Supports payment protocol (BIP 70 and BIP 73), which adds an additional level of security.
- Hassle-free bitcoin refunds.
- Ledger payment tracking available.
Gourl.io is a global provider of online cryptocurrency payment solutions. Gourl.io is a payment platform where vendors and consumers can transact with each other, backed by the bitcoin and altcoin payment protocols. GoURL.io has over 18,000+ registered companies and vendors from all over the world.
WordPress has rated GoUrl as one of its top bitcoin plugins. Nice features include integration with all website pages and no navigation to external payment pages. Other features are pretty standard, such as receipt of bitcoins directly into the merchant’s wallet with conversion to USD/Euros/other currencies at any time after that. Conversion is not automatic, however, so the rate will depend on what it is at the exact time of conversion.
1.5% to accept payments on websites. And 3.5% if you are using Monetiser Online.
- No ID or bank account needed to start accepting payments. The platform is highly anonymous.
- With Monetiser Online you can create a payment URL in one click and accept payments without installing any integrations.
- Works with all popular bitcoin wallets.
- Offers detailed payment statistics.
- Compatible with bitcoin debit cards for payouts.
- All payments are forwarded to the merchant’s wallet within 30 minutes. The processor does not store customer’s funds.
- Payment processing takes just 5 seconds.
AlfaCoins has the unique feature of offering payments to be split between fiat and cryptocurrency. For those merchants who wish to retain some amount of bitcoin from each transaction to cash in on surging prices, this is a great option as it allows them to hedge their bets without risking the entire amount.
While AlfaCoins has a slightly lower transaction fee of 0.99%, it doesn’t offer the $1 million worth of free transactions that Coinbase does. However, AlfaCoins charges no further fees to install the payment gateway and is subscription free too. A further bonus is that AlfaCoins can be used in any country with the exception of Iran and North Korea. It allows funds to be withdrawn in USD or Euro.
- Mature payment processor with extensive API documentation.
- No charges for installing the payment module and no subscription fees.
- Also offers a payout system to handle mass payments (e.g. salaries/bonuses).
- Allows splitting incoming payments into two parts – cryptocurrencies (Bitcoin, Litecoin, Ethereum) and fiat.
- Bitcoin payments can be withdrawn to the bank account in Euro or USD from all countries except North Korea and Iran.
Shopify is one of the world most trusted bitcoin payment gateways. As a result, it is already being used by 1,000’s of merchants throughout the world to facilitate payments in bitcoin.
It is really easy to set up and has plenty of customer service support should you need any help. The platform is crammed with loads of good features, including APIs that allow integrations with Coinbase and other payment gateways that help make payment processing as easy and transparent as possible.
Transaction fees vary depending on the bitcoin payment processor you choose.
- Easy-to-setup with extensive documentation available.
- PCI compliant solution.
- Supports bitcoin payments through POS applications.
- Shopify platforms come with a lot of extra tools to set up and run an e-commerce store.
Point of Sale
Blockchain Merchant is the free point-of-sale app for Android that makes it easy for your growing business to instantly accept Bitcoin payments at any retail location. It’s the ideal app for restaurants, bars, cafés, and all retail merchants accepting Bitcoin. Just set up the Blockchain Merchant app with your bitcoin wallet address and your business can start receiving bitcoin payments immediately.
There are a lot of languages to choose from including: English, French, simplified Chinese, Arabic, Italian, Portuguese, Spanish, Russian, and Japanese.
And they also support many currencies including: USD, ISK, HKD, TWD, CHF, EUR, DKK, CLP, CAD, CNY, THB, AUD, SGD, KRW, JPY, PLN, GBP, SEK, NZD, BRL, RUB.
Bitcoin Point of Sale apps for Android and iOS allow Businesses to accept Bitcoin payments on a mobile device. Bitcoin Point of Sale web app can be accessed from any internet enabled device directly in a web browser. Sell on outdoor locations or when on the move without impacting speed or performance. New orders can be created and processed within seconds in a few steps without any interruptions or delays. Track orders in your Merchant account online or in Bitcoin POS app directly. Application works as a virtual terminal and usability is simple, highly intuitive and quick for new staff to learn.
XBT Mobile allows you to start accepting Bitcoin with no upfront costs. Customers may pay from any mobile Bitcoin wallet by NFC (Android only) or QR code, payment from offline mobile devices is supported by Bluetooth (Android only). The payment process is fast and secure. This solution best suits merchants without a fixed point of sale like pop-up or street traders.
BitcoinPay is integrated into professional Point of Sale App LILKA. It supports tablets and smart phones. LILKA registers sales and provides complete sales overview needed for accounting. LILKA allows to accept payments in cash, Bitcoins and can be connected to credit card reader.
As a merchant, the importance of offering a good range of different payment options cannot be underestimated. Accepting bitcoin as a means of payment will give merchants access to new customers and help to boost profits. It is a win-win situation that no merchant should ignore. Of course do not forget to pay bitcoin taxes.
And if you are accepting bitcoin, you need to publicize that fact with a sign. You can, of course, make your own, or grab the ‘bitcoin accepted here’ sign from the bitcoin wiki.