There’s currently more than 1,300 different forms of cryptocurrency like Bitcoin traveling through cyberspace, with a total value of more than $575 billion. While some people buy and hold crypto as an investment opportunity, many consumers use it just like other forms of currency—to purchase good and services.
From lower fees, enhanced security, and the elimination of chargebacks and payment disputes, there are numerous benefits to accepting cryptocurrency in your business. But perhaps the biggest benefit is the potential growth of your customer base and bottom line.
Indeed, with more and more companies accepting digital currency every day, it’s only a matter of time before this payment option becomes the rule, rather than the exception. Best of all, the technology that allows businesses to accept crypto now makes it just as easy—if not easier—to accept as it is to accept credit cards.
If you’re interested in capitalizing on this booming new payment method, you can get started accepting cryptocurrency by following these three steps:
1. Set up a merchant wallet account
You’ll first need to set up a merchant wallet account. A wallet account works like email, only instead of sending messages, it’s a digital address where customers send their money.
Merchant wallets can be set up in minutes though payment-processing companies like Coinbase, CoinGate, and BitPay. These digital exchanges automatically convert crypto into your base currency at the exchange rate that existed at the time the money was sent. From there, the funds can be transferred to your bank accounts.
Your wallet’s address, or public key, is a unique, 26-35 alphanumeric-character string, along with an associated Quick Response (QR) Code. The QR code allows customers to simply scan a computer-generated graphic with their smartphone to send money, rather than typing out the full address.
Your wallet also comes with a private key, which is another unique string of characters that basically works as your password to access your wallet. Be certain this key is stored securely and never lost, because if it is, all of your money will be gone, and there’s no way to recover it.
Some wallets only accept specific forms of cryptocurrency like Bitcoin, so if you want customers to be able to use more than one form, be sure you select a wallet that allows for that.
2. Add cryptocurrency payments to your points of sale
After you’ve set up a merchant wallet, you’ll want to integrate payment options into your points of sale (POS). Wallets can be used with nearly every different type of POS system, such as smartphones, payment terminals, online shopping carts, as well as paper and digital invoices.
Payment processors typically charge either a percentage (many just 1%) or a small monthly fee to process these transactions, which include taking the payment, exchanging it from crypto to base currency, and transferring it to your bank. These fees are generally much cheaper than those charged for using credit cards.
Here are a few of the most popular ways for businesses to accept crypto:
- Person-to-person: The easiest way to accept cryptocurrency payments is person-to-person (P2P). Using a mobile app that comes with your wallet, the customer scans your QR Code with their phone or tablet, and the money is sent to from their wallet to yours. In this way, even your neighborhood lemonade stand can take digital currency.
- POS systems: If you’re looking for a more robust solution, several options exist for streamlining the process of accepting crypto payments through your POS. Some companies, like Coinkite and Revel, offer their own payment terminals similar to those used for credit and debit-card payments. Others, like Bitpay, offer apps that can be integrated into existing POS devices like the SoftTouch POS System. Some of the more advanced systems even offer the ability to take crypto-based debit cards and serve as a crypto ATM.
- Online payment platforms: If you have an online business, there are a number of payment gateways that let you easily accept cryptocurrency payments through your website. In fact, some popular e-commerce platforms like Shopify and WordPress offer simple plugins that let you quickly integrate crypto into your existing online shopping cart. With most wallet accounts, you can even accept digital currency via online payment platforms like PayPal or Stripe.
3. Integrate payments into your accounting system
While payment processors provide you with tools and reports for accepting and tracking crypto payments, you’ll likely want to integrate these transactions into your existing accounting systems as well. Some software providers like QuickBooks have apps for quickly integrating crypto payments, and most merchant wallet accounts include instructions for manually importing these transactions into other systems with minimal hassle.
Cover all your bases
As with any other major development of this nature, there are several legal, tax, and financial issues you should be aware of when accepting cryptocurrency in your business. These issues shouldn’t deter you from take advantage of this new opportunity, but because crypto is fairly new and largely unregulated, you should definitely consult with us to ensure you have all of your bases covered.
We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.