How to Accept Bitcoin on Your E-commerce Store

Bitcoin

Bitcoin has been gaining in popularity over the past few months, ever since it shot up to over $1000 in value last year. At the time of writing this post, it’s back down to a little less than $500, so it’s still quite volatile.

However, many online businesses and e-commerce stores are starting to accept Bitcoin as a method of payment on their sites. It’s fast, cheap and secure. If you’re a global e-commerce store, and you don’t want to deal with multiple currencies, Bitcoin is a hassle-free alternative. Plus there’s a growing fan base of the crypto-currency movement that you can tap into.

If you’re not quite sure what Bitcoin is all about, or whether you should accept Bitcoin in your store, check out this Bitcoin primer we wrote a while back. If you’ve decided you want to go ahead and accept it as a method of payment, then here’s what you need to know.

Bitcoin Processors

To accept Bitcoin, you’ll need to use a Bitcoin processing software. This is basically a payment processor that processes Bitcoin payments.

Bitpay – Bitpay is a enterprise-grade payment gateway for bitcoin. They have integrations with 22 e-commerce solutions, including Shopify, Magento, 3dcart and more. They also have a POS solution for those of you who have retail outlets. You can choose whether you want to convert your payments into cash, or leave them as bitcoins, or convert a portion and leave the rest. Bitpay automatically converts bitcoin payments into the currency of your choice and directly deposits it into your bank. There are no transaction or conversion charges, so you don’t lose any money on your sales. Instead, you pay a monthly fee for the service.

Coinbase – Coinbase is a digital bitcoin wallet that allows you to buy, sell and store bitcoins, apart from accepting them as payment on your store. They don’t charge any fees if you choose to keep your payments in bitcoin. However, if you want to convert it to your currency, they do charge a 1% fee which only kicks in after your first million dollars in sales for the month. You can choose to instantly convert your bitcoins to cash the moment you receive them. The cash will then be directly deposited into your bank account. They have various methods for integrating with your store, including plugins for popular shopping carts like Magento and WooCommerce.

BIPS – BIPS is a payment service provider specializing in the technical aspects of accepting cryptocurrencies such as bitcoin. You can integrate them with Shopify, Bigcommerce and more. Again, you can choose to have all or a percentage of your payments converted. BIPS will then deposit your amount into your bank in 1-5 days. They don’t charge any processing or conversion fees.

GoCoin – GoCoin is a payment gateway that processes bitcoin and litecoin. They only have integrations to WooCommerce and Magento, but they do have an open API and detailed docs to help you create your own integrations. They charge a 1% transaction fee which gets reduced after your revenue passes $2,500/month.

xCoinMoney – xCoinMoney is an anonymous billing processor that accepts Dollars, Bitcoins, Litecoins, Primecoins and Dogecoins. There are no setup fees or monthly fees. You don’t need to verify your account and you can sell anything you want. They have their own API so you can integrate it with your store.

BTCMerch – BTCMerch is a bitcoin and litecoin payment processor that doesn’t charge setup fees or monthly fees. They charge a low transaction fee of 0.5%. There are plugins available for WordPress, Drupal and Magento. You can also plug their purchase button code into your site, or use their API to integrate.

BitMerch – Another free payment processor, BitMerch pays you out in any currency and to any country. They have a WordPress e-commerce plugin but you’ll have to use their API if you have another e-commerce solution.

OkPay – OkPay is a full-fledged payment processor that allows you to accept bank transfers, cheques, and various e-currencies, including bitcoin. You can create several wallets in them to store your bitcoins or you can withdraw into your bank account. You can even get an OkPay-issued ATM card and access your money from anywhere in the world. They have plug-ins for a number of popular e-commerce platforms, as well as an API.

PayStand – PayStand is also a full-fledged payment processor. You can accept credit cards, eChecks and bitcoin without incurring any transaction fees. In fact, PayStand does more than payment processing. It allows you to integrate directly into your e-commerce store and your Facebook store. If you don’t have an existing site, you can create a storefront with PayStand as well. You need to pay a monthly fee based on the features you want.

Bitcoin Wallets

When you get paid online via bitcoin, your coins will go to your wallet. Your wallet is just a secure account that holds your bitcoins, kind of like PayPal for bitcoin. You can either store your bitcoins in your own wallet, in which case you’ll need to get a desktop app, or you can store them in a third-party web host.

Desktop clients are like physical wallets. You own it, you carry it around with you (on your computer) and you’re responsible for protecting your own money. You download a client like Electrum or Hive, install it on your computer, and generate an address. When you sign up for a bitcoin processor, you’ll enter this address as the place to send your bitcoins to.

Web hosts are cloud-based solutions so you don’t need to download a client. However, the web-host will be responsible for keeping your money safe, just like when you deposit money with an actual bank. You’ve already come across some web wallets in the list of payment processors above, like Coinbase. There are others like BitGo that are pure wallets and focus on security. Either way, when you sign up for any of these services, you’ll get an address just like for desktop clients, so you can start storing your bitcoins.

Currency Conversion

Bitcoin is still quite volatile, and the trading markets aren’t regulated like regular markets. Getting into bitcoin trading is a whole different ball game, and as a store owner you probably don’t have the time or the appetite for risk to play. You’re offering bitcoin as a payment to make it easier for customers and cheaper for yourself, and not to hoard bitcoin. When you accept bitcoin with one of the payment processors above, you have the option of automatically converting your Bitcoin to the currency of your choice as soon as you receive it. This preempts any volatility in the value of bitcoin.

On the other hand, if you fancy a bit of risk, you can store a portion of your bitcoin in your wallet and wait for the value to appreciate. For example, let’s say you make a sale of $640. On March 4, 2014, that would have been 1BTC. Suppose you choose to store it instead of immediately converting it, then on March 5 2014, you would find that the value of 1BTC rose to $680. That’s a $40 gain in value over one day. Unfortunately, it’s been decreasing since, and right now it’s $455.

Whether you choose to store or convert, it makes sense for you to keep track of the current bitcoin value. Coinbase has a live chart, and there are other websites that provide up-to-date conversions.

That’s pretty much all you need to know to start accepting Bitcoin as payments on your e-commerce store! The science and technology behind how it all actually works can get confusing, but setting it up on your store is really quite easy. Unless you’re curious about how it works, you can safely ignore it and focus on what matters to your business, signing up for a processor and integrating it into your site.

Have you started accepting bitcoin on your store? If so, what processor do you use?

 

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