Cryptocurrencies have been around since 2009, but most of the world still thinks of crypto as a brand-new innovation. Those same people would probably be shocked to discover that the global value of the cryptocurrency industry surpassed $2.5 trillion in March 2024.
Yes, that’s trillion—with a T!
Although prices fluctuate constantly, the market has shown overall growth trends for years. Big names like Microsoft, Overstock, NewEgg, and Shopify are among online retailers accepting Bitcoin for payments. So, if you’re considering adding crypto to your site, you’re in good company. Most of your competitors aren’t ready to consider using cryptocurrency for eCommerce, which gives you a great opportunity to get ahead of the competition.
Below, we discuss how to use cryptocurrency in your business, walking you through the right steps to take and also addressing the main challenges you want to be aware of. Ready to start taking crypto payments for your products? Let’s get started.
Why Should Businesses Use Crypto?
Adding crypto payments to your site may feel daunting, and because so many companies have been slow to start using cryptocurrency for eCommerce, you might wonder if it’s the right move.
Here’s the upside to adding crypto to your eCommerce site:
- Reduce fraud: Crypto payments are final. Once a customer pays, there’s no reversing that payment like a credit card transaction.
- Lower fees: Crypto payments are less likely to involve high third-party processing fees like credit card processors.
- Use crypto for other business processes: You can turn around and use that crypto for your business expenses, like shipping products to customers.
- Support the crypto community: Becoming a crypto eCommerce site shows you’re a vital part of the crypto eCommerce community, which continues to grow every day.
- Leverage crypto for marketing: Joining the list of companies that accept crypto payments is a great way to advertise your site and connect with other businesses doing the same.
Do You Need to Open a Crypto Account for Your Business?
The phrase crypto account may be interpreted in different ways.
Do you need a digital crypto wallet? Yes.
Do you need a bank account specifically for crypto payments? Not necessarily—but it sure can help.
In most cases, the best solution for your digital wallet is a crypto payment gateway. This will facilitate the payment process and ensure your payments arrive in your company’s crypto wallet.
How to Accept Crypto Payments on a Website: 5 Steps
In order to accept cryptocurrency payments on your eCommerce website, you need a crypto wallet and a way to provide your customers with the address to send their crypto payments to. Setting up these details manually is complex and time-consuming.
Fortunately, there are great options available to get things going. Follow these five steps to set up crypto payments without the hassle of manual website customization.
- Choose a Crypto Payment Gateway
A cryptocurrency payment gateway acts as both a crypto wallet and payment processor. Two of the most prominent crypto gateways used by US eCommerce companies are Coinbase Commerce and BitPay. These services offer easy integration and handle the complexities of crypto transactions.
Think of payment processing platforms as a combination of a crypto business bank account with a hosted wallet. You have the option of withdrawing some—or all—of your crypto to your own personal, self-hosted wallet.
Many recommend self-hosting crypto for safety and security since privacy and self-governed responsibility are central ideologies to individuals who are enthusiastic about embracing crypto. Others prefer to trust a third-party custodian not only for processing payments but also for keeping all of their crypto in the host-provided wallet, relying on their expertise in cybersecurity. The choice is yours.
- Integrate Your Crypto Payments
eCommerce websites can be complex platforms that rely heavily on custom coding or popular plugins and extensions that bring together the features you need.
Solutions like WooCommerce for WordPress work with popular payment processing solutions like Coinbase Commerce to help you integrate your payment gateway into your website.
Alternatively, you can use API integration to customize payment solutions if you need more flexibility in your integration and have the technical skills to implement coded commands for your site. Bitcoin Postage has created our own API, which you can use to create shipping labels with your application or website.
If you don’t like the extensions or APIs available, you might be able to set up a combination of payment buttons embedded by the platform facilitating your payments and work with a hosted checkout that links to your site.
- Set It Up
Once you’ve decided how to implement payments, you’ll want to tailor the settings and preferences to your plans. This includes deciding which cryptocurrencies you want to accept and what happens to the payments you receive.
Choices include:
- Accepting a wide range of cryptocurrencies but converting them to a stablecoin, a cryptocurrency that remains pegged to the value of the US dollar (USD)
- Keeping your earnings in the crypto that customers pay with
- Converting all payments into USD
These types of configuration options are called settlement options.
- Test It Out
It’s important to test your new crypto payment options on your website before going live to make sure there are no bugs to work out.
- Go Live
Once everything is in order, you’re ready to let your customers know about your exciting new feature!
Challenges of Accepting Crypto in eCommerce
There’s a constant flow of innovations in the cryptocurrency sector. Navigating how it all works can be challenging for businesses and customers alike. The following are some crypto challenges to be aware of.
Price Volatility
Most cryptocurrencies face a great deal of price volatility in the marketplace. Crypto is traded on exchanges similar to stocks, but cryptocurrency exchanges have never-ending trading days, 24/7/365. It isn’t unusual for different cryptocurrencies to drop as much as 80% and later soar by 300% in a matter of days—purely over speculation.
For this reason, it’s important to pay attention to changes in markets. If you aren’t using some of your crypto for shipping or other aspects of your business, exchange crypto payments into dollars as soon as you receive payments for your products or services to lock in the value of your earnings.
Consumer Education and Trust
As waves of new consumers become interested in crypto, they typically lack knowledge about buying, selling, and investing. Offering resources and links to teach new users how to safely make purchases from your site goes a long way toward providing customers with a positive experience.
Likewise, people may hear horror stories of fraudsters taking advantage of crypto newcomers, so offering your customers educational resources is great for building trust.
Limited Adoption
Despite the fact that the oldest cryptocurrency—Bitcoin—has been around since 2009, it takes a long time for a completely new technology to attract interest. Most retailers and service providers don’t offer crypto payment options, while others are reluctant to experiment.
Technical Complexity
Once people learn to send and receive crypto, they typically become more comfortable with how it works. But there’s still a relatively steep learning curve for many when setting up a crypto wallet, adjusting privacy settings, and understanding the ins and outs of sending and receiving crypto.
Legal Considerations of Accepting Crypto Payments as a Business
When it comes to accepting cryptocurrency payments, it’s important to be aware of the legalities and regulations involved, and because the crypto space is always evolving, so are the rules surrounding the use of crypto for payments.
While the following are good general rules to apply to your business, don’t treat this as financial or tax advice; it’s vital to have advisors knowledgeable about US and state-specific crypto laws.
Regulatory Compliance
The Securities and Exchange Commission (SEC) has spent years attempting to properly classify different types of cryptocurrencies to assess whether they should be treated as investments, securities, commodities, or simply an alternate form of payment.
Since you’ll be accepting crypto for payments, you want to be aware if any changes occur that relate to the SEC’s scrutiny over the crypto space. This generally applies to other agencies, too, such as the Commodity Futures Trading Commission (CFTC), Financial Action Task Force (FATF), and Financial Crimes Enforcement Network (FinCEN).
Privacy and Security
Cybersecurity is a key concern for regulators since cryptocurrency is still a relatively young technology. To protect the average consumer, local and federal agencies enforce strict rules centered around Anti-Money Laundering (AML) and Know Your Customer (KYC). Their rules require certain businesses to collect detailed customer data and require customers to use extra layers of password protection to protect their accounts.
Crypto and Taxes
It’s important to have a tax advisor who remains vigilant on the evolving landscape surrounding crypto payments. This includes reporting on payments accepted in crypto and paying taxes on those sales, any holdings you treat as an investment, and crypto you sell at a profit or loss.
Terms of Service (ToS)
If any contract laws or rules about disclosure are required for your business, be sure to include these clearly in your ToS on your website. This includes information about how you collect information on visitors to your site and customers and whether you share any user details for government agencies.
Take Part in the Crypto Economy with Bitcoin Postage
One of the great things about becoming an eCommerce company that accepts crypto payments is that you’re taking part in a unique digital marketplace. Your company is a pioneer, joining the small but growing community of businesses opening their doors to cryptocurrency users.
As customers choose to purchase your products with crypto, you can pay for shipping their products with crypto, too!
With Bitcoin Postage, it’s easy to enter your shipping details and pay with crypto. Whether it’s for a single transaction or bulk shipping orders, using crypto to cover shipping costs is the perfect way to put your crypto profits to use.