How To Accept Bitcoin
Bitcoin is fast becoming a new payment method for both online and brick-and-mortar stores. Although it has a long way to go, the resilience of the cryptocurrency proves that it may be here to stay. There are several companies that offer the ability to accept Bitcoin payments, but not all of them are reputable. My goal with this article is to give a quick background about Bitcoin, talk about why you should start accepting it, and give a short list of vendors that allow for Bitcoin acceptance.
Table of Contents
What is Bitcoin?
Bitcoin is a person-to-person virtual currency. The open source payment network allows users to exchange bitcoins via the Internet by deducting a designated amount from one digital wallet and adding the same amount to another. Because it is a global network and is not tied to any one economy or banking institution, bitcoins can be purchased or exchanged for dollars, euro, yen, or other currency.
How does it work?
Bitcoins are sent from one wallet to another, bypassing any third parties like banks, as simply as one sends an email. Miners secure the network by verifying each transaction and posting them in a public ledger.
What are the benefits of using Bitcoin?
Costs less to use
Without the overhead of a bank, there are little to no processing fees with Bitcoin. Credit card companies charge between three and five percent of each purchase simply to use the service. It costs even more to wire money from one country to another.
Faster for large purchases
Because banks are not involved, there is never a freeze on funds or a wait time for large payments to slow transactions. Bitcoin miners often verify transactions within minutes.
Bypass the lines and hassle of exchanging one currency for another by using Bitcoin around the world.
Since Bitcoin is still relatively new, individuals within the network are on the search for places to spend their bitcoins. Accepting Bitcoin provides exposure to a new market of customers.
Once transactions are verified, they are logged onto an online ledger that is visible to the public. For businesses or non-profits with concerned parties, Bitcoin makes spending practices easy to audit.
How much does it cost?
Bitcoin is free for individual users and can potentially be free for companies to use, depending on how it is accepted (with a processor or without). However, because the value of an individual bitcoin varies when converted to another currency (much like the value of a US dollar against a Euro varies), some costs or some additional income might occur from day to day.
How to Accept Bitcoin
You can accept Bitcoin payment in any one of three ways.
Using mobile phones or a tablet, you can accept payment directly from one Bitcoin wallet to another.
Some businesses opt to place a QR code at checkout for customers to scan and send payment.
POS hardware terminal
Merchant service providers work with businesses to accept Bitcoin payment, convert it, and deposit it into designated bank accounts.
Reputable Bitcoin Processors
For those of you opting to use the point of sale hardware, I recommend the following Bitcoin processors: