Why in the world would I accept Bitcoin as payment?
– nearly every business owner who isn’t a computer geek
At first, it might sound crazy to accept Bitcoin for your goods or services. The Bitcoin exchange rate jumps around like a frog in a hot pan. It’s not clear how to cash out bitcoins for local currency. And who’s going to be buying your wares with Bitcoin?
These are all understandable concerns. So let’s start with the basic benefits of accepting Bitcoin as payment:
No chargebacks — Bitcoin payments are irreversible. This means far less risk of fraud for merchants.
Making a payment with Bitcoin is really easy for customers: they click a button or scan a code with their phone. The payment shows up instantly, and is confirmed in an hour. Done.
Bitcoin has no borders, so international payments have no extra hurdles or fees.
Bigger markets. A lot of newly rich nerds want to spend their Bitcoin wealth.
That’s the basic stuff that you get when you accept Bitcoin.
But when you use a Bitcoin payment processor service, you don’t need to be a computer expert or Bitcoin aficionado. The payment processing company handles all the confusing stuff, and you get these benefits:
Bitcoin payments can be immediately cashed out and sent to your bank account. Customers pay in Bitcoin, you get paid in your local currency (i.e. US dollars) via daily bank transfers. This avoids any potential losses due to the Bitcoin exchange fluctuations.
Much smaller transactions fees than credit card companies. Or no fees at all — Bitpay now offers a plan that has no transaction fees, for life! And Coinbase is currently offering no transaction fees on the first $1,000,000 you get in sales after signing up. After that, you get charged 1% per purchase. Most credit card companies charge around 3% per transaction.
Point-of-sale apps for mobile devices, email invoices, and website checkout buttons are all included for free. Get paid in person, by email, or on your website.
Protection from any double spend attempts by fraudulent Bitcoin customers — you don’t need to wait an hour for the Bitcoin transaction to confirm.
Bitcoin payment processors take the hassle out of accepting Bitcoin payments. But if you’d prefer to accept Bitcoin without a middleman, skip on over to the accept Bitcoin in-person page.
What are the Drawbacks to Using a Payment Processor?
They handle your incoming Bitcoin payments, so there’s always a chance that they could get hacked and lose the Bitcoin funds. Or they could be compelled to disclose your information to governmental agencies. Just like with credit card companies, the payment processor will have your sales records, and your bank will have records of any money transfers you’ve cashed out from the payment processor. These records could be subpoenaed if you’re ever under investigation.
For those preferring more privacy, accepting Bitcoin on your own may be a viable alternative.
OK — Which Payment Processor Should I Use?
Coinbase and Bitpay are the most recommended here due to their pricing (no fees!), ease of setup, and established reputation.
Once you get setup, make sure to attract Bitcon business by advertising that you now accept Bitcoin.