If you’ve been selling goods and/or services on the web for the last few years, you probably know that creating a successful online business is becoming harder every year.
In fact, the online marketplace is quickly turning into a saturated and over-populated scene.
For that reason, many entrepreneurs are looking for ways to differentiate themselves from their competitors – start a new trend, explore a new idea or capitalize on opportunities that come along the way.
One such opportunity is the ability for any type of online business to accept Bitcoin payments.
If you’re reading this, you probably have some basic knowledge regarding Bitcoin. If not, you might want to get some background information here.
Many people that are familiar with the whole concept are now looking for ways to add Bitcoin as a viable payment method for their online store.
If this idea has been sitting on your mind as well, congratulations! You are in the right place.
We did our due diligence and are here to present to you a list of the pros and cons of accepting Bitcoin payments.
We also give a few recommendations on the steps you need to take to set up a Bitcoin payment gateway for your store.
Let’s get started…
Why Bitcoin payments are a good idea
The first thing that may come to mind if you don’t know much about Bitcoin, is that it is used for illegal activities, tax-evasion and “stealthy” payments. This couldn’t be further from the truth.
Bitcoin decentralized nature helps the current financial system work better by closing up its loopholes, implementing a model of transparency and giving the power back to the people.
The popular cryptocurrency allows more people to purchase product and services online in a faster, easier and completely legal way.
So, here’s why you probably SHOULD accept Bitcoin
Bitcoin payments eliminate fraud
Digital fraudsters cause massive headaches to online business owners. This is the type of people that will take advantage of Paypal or other payment systems in order to get unfair refunds.
For example, one might pay for and receive a 2-hour business consultation. After the service has been provided, with just the press of a button, the customer can request a refund claiming he never received the consultation in the first place.
What I am trying to point out is how easy it is for anyone to perform such actions. Large payment systems such as Paypal have no overview as to whether or not a service has been provided. As such, they will almost always make a refund.
This, on the other, cannot happen with Bitcoin payments. All Bitcoin transactions are final and cannot be reversed by any third party’s decision. This puts business owners into a favorable position, as fraud is practically eliminated.
There are little to no fees
Every time a customer makes a payment using Bitcoin, there will be little to no fees. A transaction on the Bitcoin network costs just a few cents and is a lot cheaper than the commissions required by POS machines, digital payment systems, and credit cards.
In further detail, when someone pays using Bitcoin, you have the ability to choose whether or not you want to pay transaction fees (which are rewarded to the miners that confirm the transaction). If you do pay the fees, you will get paid faster. If you don’t, the transaction will take a longer time to complete. None the less, this is very convenient for online business owners.
It is designed to become more valuable
While we cannot give any sort of financial advice, we do have a good understanding of Bitcoin’s nature. In contrast with traditional currencies, Bitcoin is designed to be a deflationary currency, thanks to its repetitive halvings, limited supply and its increasing popularity. This, in time, increases the coin’s scarcity and value. While there is no proof of the currency’s future growth, many businesses see this as another way to increase their profits over time. This, however, can also backfire, and we will explain why in the following chapter.
Reasons to reconsider
Up to this moment, we put Bitcoin in a favorable spotlight, highlighting its benefits. However, there are also a couple of reasons that may cause you to reconsider.
The volatility of the market
The biggest reason for which you might want to hold back – at least for the time being – is the volatility of the market. Bitcoin is well known for its turbulent nature, which has seen the coin depreciate in value over a very short period of time – days, or even hours. When you receive Bitcoin payments this could be a serious problem, as your profit margins may decrease or disappear overnight.
On the contrary, there have been many cases in which the market saw a healthy recovery, increasing the value of Bitcoin just as fast. This is a very real possibility and, if you happen to hold Bitcoin during that time, your profits will increase.
For example, if you sold a T-shirt, through your eCommerce store, for $30 worth of Bitcoin, you may wake up to a much larger or smaller amount, depending on the conditions of the market. If you are willing to take this risk, carefully study the market and try to capitulate on these volatile swings, to make even more profit down the road.
Converting Bitcoin into traditional money
Most businesses that accept Bitcoin will hold onto their coins, hoping to sell them at a later point in time for a significant profit. While this sounds like a good idea in theory, the practical aspect could get quite confusing for inexperienced people.
The business owner that decides to exchange his Bitcoin to FIAT (traditional money), will need to find and make use of a reliable cryptocurrency exchange. And while a simple Google search will help beginners understand how the process works, it can be quite tricky to find an exchange with fast transactions and low fees.
How to accept Bitcoin for your Online Store
Based on the information above, you should be able to decide whether or not accepting Bitcoin is in your best interest.
If you want to give it a try, keep reading to find out how to add Bitcoin payments to your website.
Adding a payment button to your website
Online business owners can receive Bitcoin payments online by setting up buttons that are connected to online payment intermediaries.
You can easily set up and promote a “We Accept Bitcoin” button that streamlines the payment process, using services that offer such merchant options. Some of the most popular include BitPay, Coingate, and Coinbase.
The process is simple. You will receive a few lines of HTML code that you will have to embed into your online store, on the necessary pages.
It may sound confusing, especially if you are not “tech-savvy”, but it only takes a few minutes to get all set. Here is a video to walk you through the process:
For the biggest e-commerce store builders, the process of creating the HTML button from scratch won’t be necessary.
Here is one more video that takes you through the process step-by-step:
Online businesses are all about technological innovation and seamless customer experience. If you want to stay ahead of the game, you might want to consider adding Bitcoin as a form of payment to your website.
This will help you serve your customers in a better way and possibly help your funds compound in value in the future.
What we know for sure is that cryptocurrency is here to stay. The concept is slowly evolving into a brand new asset class and a reliable form of payment for all over the world, creating new opportunities for business owners and consumers alike.
As always, we invite you to perform further research and take the information found in this article as a foundation for your decision.
ABOUT THE AUTHOR
Dimitris Tsapis is the Content Manager of Paybis, a UK-based cryptocurrency exchange that helps people buy Bitcoin and other cryptocurrencies.
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