It took only four months within the first half of 2021 for the global cryptocurrency usage to double to over 200 million. In this article, we’ll show you how to accept crypto payments as a small business.
As more people continue to warm up to crypto, a good number of small businesses are way ahead of the news, positioning themselves to serve the increasing number of crypto-paying customers.
Accepting Cryptocurrency Payments
According to a January 2020 HSB nationwide survey, 36% of small businesses accept cryptocurrency payments. If you’re among the enterprises left out of the crypto payments bracket, it’s probably time to start figuring out how to accept crypto payments to keep pace with the competition.
Among the small business owners surveyed, 50% cited the adoption of crypto by major payment processors and large innovative companies as a motivator for accepting crypto payments. In the survey, 35% of the respondents said that they chose to go crypto to keep up with competition and customer demands.
But crypto adoption is not just a survival tactic for small businesses. It’s also a means to business efficiency. There are numerous benefits of using bitcoins and other cryptocurrencies for small businesses. These include:
- Increasing your international reach
- Better security due to the decentralized nature of cryptocurrency
- Faster payments
- Lower processing fees, and
- Elimination of the dreaded chargeback fees that eat into your hard-earned cash.
Crypto payments are, however, not without their downsides. High volatility and the risk of cyber-attacks top the list. Depending on how you adopt crypto, you can minimize these risks and reap the most benefit out of crypto.
How to Accept Crypto Payments as a Small Business
Accepting crypto payments is easy. Here’s how:
Set up a cryptocurrency wallet
You’ll start by setting up a crypto wallet. A wallet works just like a bank account, where you send and receive digital money.
Since chances are you’ll accept different types of crypto from various customers, it’s best to go for a multi-cryptocurrency wallet that holds several types of cryptocurrencies.
A multi-crypto wallet holds different types of cryptocurrency, saving you the inconvenience of opening many crypto wallets for different cryptocurrencies.
Bitcoin is the most popular crypto among small businesses, followed by Bitcoin Cash, Ethereum, Litecoin, and Binance. Consider a wallet that can hold these popular cryptos.
Other factors to look for when choosing the best multi-cryptocurrency wallet are:
- Cryptocurrencies supported (wallets such as Ledger Nano S and Guarda support more than 30 cryptos)
- Affordability in terms of purchase fees (for cold or offline wallets) and transaction fees
- Ability to integrate with other software wallets
- Safety (malware – and hack-proof)
- Ability to link with other apps for seamless money transfer
Integrate crypto payments on your website
Once your crypto wallet is up and running, it’s time to integrate crypto payments into your website.
If you run an e-commerce site on platforms such as Shopify, Magenta, and Woocommerce, there are numerous plugins that you can install to set up crypto payment processing.
If you can’t find the right plugin, you can sign up on a crypto payment gateway. Crypto processors provide several ways in which you can accept payment on your website. Some of these methods include payment buttons, and invoices.
Some of the top crypto processors in the world are CoinBase Commerce and BitPay.
Go for a cryptocurrency gateway that:
- Supports various types of crypto
- Has low transaction fees
- Integrate with platforms that are important to your business
- Insulates your crypto from market volatility through instant conversion to FIAT money
- Has no minimum balance and payout restrictions
- Can settle your payments in multiple currencies
- Provides other perks such as invoicing, recurring payments, and other accounting options
- Has a good reputation and handsome reviews
- Is safe and secure with tight sign-in and user verification processes
If you’re unable to or don’t want to integrate, you can organize direct payments with your customers. All they need is your wallet address or your QR code, which you can generate from your wallet. Your clients will enter your address or scan your QR code to make payments.
Cushion yourself against crypto drawbacks when accepting crypto payments
You can maintain the safety and value of your crypto by:
- Instantly turning your Bitcoin and other cryptos to cash
Sign up for payment processors such as BitPay and Flexa which automatically convert your Bitcoin to cash, eliminating volatility issues that can reduce your crypto’s value.
- Avoiding direct contact with crypto
You can also accept bitcoin payments without crypto exposure by letting your customers pay via the crypto option on PayPal.
Once your crypto-holding sends the digital money, PayPal credits your account with U.S. dollars.
What to consider before you accept cryptocurrency payments
- Crypto tax implications
According to the International Revenue Services (IRS), all cryptocurrencies are capital assets and attract capital gains tax. If, as a small business, you use bitcoin to make purchases, the IRS treats that purchase as a crypto sale.
If the coins you ‘sell’ are worth more than what you ‘bought’ them for, you’ll pay capital gains tax in addition to applicable sales tax.
- Crypto regulation (or the lack of it)
No bank or government body regulates crypto since cryptocurrencies are largely decentralized. With limited regulation, your businesses’ assets are not entirely safe. You’ll need insurance to cover issues such as data security breaches and cybercrime losses.
You should also be prepared to keep up with changing regulations as stakeholders continue to consult on how to regulate crypto.
- Your audience
Research indicates that 74% of crypto holders are aged 25 – 44 and 19% fall between ages 44 and 55.
The ability to accept crypto payments could be a crucial requirement for your business if you serve the younger, tech-savvy audience.
Nevertheless, older generations aged at least 60 are catching up and you’ll still need to adapt if you serve the older market.
Get ahead of the Competition & Dive Into Crypto Accepting crypto payments paints your business as forward-looking and innovative, improving your brand image.
While your customers may not dive into making crypto payments right away, it’s important to learn the A to Z of Bitcoin and crypto and how to accept bitcoin payments. Be ready to grab every opportunity to stand out and thrive in today’s dynamic market.