How to Accept Bitcoin Payments as a Small Business Owner
As Bitcoin and other cryptocurrencies gain popularity, more business owners are starting to take them as payment. Whether you believe in their value as an investment or are simply trying to boost sales, it’s easy to start accepting Bitcoin payments. Here’s how.
Option 1: Use a Bitcoin Wallet
Bitcoin wallets are the simplest method. The virtual wallet is a holding account just like a wallet for actual cash or a checking account. You tell the customer your wallet’s address, and they place the money inside.
The benefit is that there are little or no fees. The downside is that wallets are really designed for personal use. It might be OK to use if you’re a service provider taking one-time payments, such as a handyman, but probably wouldn’t be appropriate for heavy retail use.
Option 2: Use a Bitcoin Payment Processor
For commercial users, a number of payment processors are now available for both online stores and in-store point-of-sale systems. These payment processors function in a similar manner to traditional credit card processors and payment solutions such as PayPal.
Be sure to review merchant and consumer protection policies. While Bitcoin payments are typically not reversible, some payment processors may add holding periods during which payments can be reversed as way of attracting consumers to the service.
What to Do With Bitcoin When You Get It?
You’ll likely need or want to convert some of your Bitcoin to cash to cover business expenses, taxes and your personal draw. You have two options when you receive Bitcoin payments.
- Hold it in a Bitcoin wallet. You can keep it there for investment purposes, sell it, convert it to another cryptocurrency or make payments to other merchants who accept Bitcoin.
- Convert it to cash automatically. Some payment processors give you the option to immediately convert Bitcoin payments to cash and make a cash deposit to your bank account just as you would get from a credit card processor. This protects you against price fluctuations when you need cash to pay your expenses or if you want to offer Bitcoin payments without taking on cryptocurrency market risk.
No matter which option you choose, adding additional payment options for your customers is usually a good way to boost sales and improve your cash flows. To learn more about adding payment options or improving your cash flow, contact Merchant Capital Source to discuss your options.