Saturday, June 28, 2014

How To Accept Bitcoin Payments At Your Business - Part 1

Why should you consider adding bitcoin as a payment option? According to Coinbase, a US based bitcoin payment processor, more than 25,000 merchants are using their platform to attract new customers. BitPay, another Bitcoin Payment Service Provider, has over 20,000 merchants currently accepting bitcoins with their payment interface. Two years ago this number stood at few hundred. The number of transactions facilitated by Bitpay increased tenfold in 2014 and crossed the 50,000 mark in November. The payment processor said that 6,296 bitcoin transactions occurred on Black Friday last year, up from only 99 transactions the year prior.

Some of the notable merchant adopters as of late include the NBA team Sacramento Kings, Virgin Galactic, and Overstock.

Why are so many merchants interested in bitcoin lately? According to Coinbase, on 27th of February 2014, the company has hit one million Coinbase consumer wallets. At the start of 2013 that figure was under 13,000. That is an astounding growth rate of 7,592.31%. As more people start using the upcoming virtual currency, more merchants are bound to follow suit and adopt it into their payment systems.

Lower Fees

With Visa and MasterCard estimated to take a 2 to 3 percent cut out of every card transaction, by using bitcoin instead, merchants stand to improve their bottom line instantly by at least 2 percent. In addition, because bitcoin transactions are irreversible, there is no possibility for chargebacks and other payment related fraud. This reduces the costs of operation by another several percentage points. This coupled with the very low fees charged by bitcoin payment processors should make any business consider adding bitcoin to their checkout process.

How To Accept Bitcoin Using Coinbase

Adding bitcoin to your payment options today is easier than ever. Several major payment processors have their own turnkey solutions that make bitcoin payment integration a breeze. Let’s start with US based Coinbase. The company’s payment solution has 0 fees on the first 1 Million US Dollars in sales. In addition, this fee only applies if you choose to convert bitcoin into your local currency, US Dollars for example. There is no fee if you decide to keep your funds in bitcoins and you just withdraw them to your local bitcoin wallet. Furthermore, the firm offers custom solutions for merchants who already process over $1 Million in sales per month (for more info click here).

Here are some of Coinbase’s professional merchant tools.

In addition to being a payments processor, the company also allows you to buy and sell bitcoins for US Dollars. The fee for this is 1%. If you live in the States, you can also link your bank account to Coinbase to facilitate quick and easy transactions.


How to accept bitcoins with Coinbase if you own a brick and mortar business?

You can accept bitcoin at your brick and mortar shop by using a mobile device. Currently, due to restrictions by Apple, Coinbase’s app cannot be used with an iPhone/iPad. Luckily, the app works on android and android phones/tablets are much cheaper than their Apple equivalents. The picture below shows the simple few step process.

  1. Enter the details of the sale
  2. Tap “Request payment” to display the QR code
  3. The customer scans the QR code with their own phone and taps to pay
  4. The customer receives payment confirmation, so do you — sale complete!
You can read more about Coinbase’s POS solution here. You can download the android app on Google Play.

Have you thought about accepting Bitcoin currency at your small business?