More people are using bitcoin than ever before. A new study says that 46 million Americans – that's about 17% of all adults in the United States – own at least a share of bitcoin, and there are more than 100 million bitcoin wallets open that contain some value of cryptocurrency.
The number of people using bitcoin for daily transactions continues to grow, as well. By January 2020, there was an average of 1 million people using cryptocurrency for daily transactions.
With digital currency becoming more mainstream, there's a growing number of consumers who want to pay with bitcoin. That means there's a great opportunity for small business owners to reach this segment of the population. Have you ever considered accepting bitcoin or other popular forms of cryptocurrency?
If you're not sure where to start, this article will walk you through how your business can accept bitcoin, as well as some popular brands that are accepting cryptocurrency.
Why Is Cryptocurrency?
Cryptocurrency is a digital currency that you can use, much like regular, physical currency. Since it's stored in a digital wallet, it doesn't physically exist, though, and can only be used to pay for goods or services through transactions with online retailers.
This virtual currency works by using a decentralized technology system known as a blockchain, which records transactions in a distributed ledger.
As of January 2021, there are more than 4,000 types of cryptocurrencies, with bitcoin as the most popular one. Other more popular forms of cryptocurrency include Ethereum and Litecoin.
The price of cryptocurrency fluctuates by the minute based on supply and demand, similar to the stock market.
Should Your Business Accept Bitcoin?
Like anything, there are two sides to accepting bitcoin. Whether your small business will accept cryptocurrency is a big decision to make. Here are some of the pros and cons to consider.
Pros of Accepting Bitcoin
There are a number of positive reasons for your business to accept cryptocurrency. Here are a few reasons to keep in mind as you decide if you'll accept this digital currency:
- Low transaction fees: While credit card fees tend to cost business owners about 2% to 3% of each transaction, bitcoin transaction fees tend to be much lower. On average, the median transaction fee is about $1.
- Minimal chance of fraud: Because of its secure technology, there's little chance of your business experiencing any kind of fraud.
- No chargebacks: When you send cryptocurrency, you can only send it one way. Once the funds are sent, they can't be sent back to a customer. This means you – not the customer's bank or credit card company – decide whether a charge should be refunded to them.
- Speedy transactions: Cryptocurrency transactions can be made quickly, even when your business receives digital currency from an international customer.
- Safe from fluctuating exchange risk: Bitcoin and other cryptocurrency prices fluctuate because the transactions are sent practically instantaneously, protecting you from losing money as prices change.
Cons of Accepting Bitcoin
There are some cons to accepting bitcoin, as well. Here are a few reasons why you might decide not to accept bitcoin:
- It's new technology: Bitcoin and other digital currencies are new technology, which means there's a lot of uncertainty about the market's future.
- The market is volatile: Crypto markets are volatile because of the limited supply of cryptocurrencies. Unfortunately, this volatility doesn't always make it the best option for businesses and consumers.
- Transactions are public: All bitcoin transactions are public and stored permanently within the same network. This means all transactions are traceable, meaning what you're buying and selling isn't private.
- Digital wallets are difficult to recover: If you've forgotten the password to your digital wallet app, it's close to impossible to recover it.
- Constantly changing regulations: The crypto market regulation is constantly changing, and some countries even restrict or ban its use. This makes it tough to keep up on business.
How to Accept Bitcoin Payments at Your Business
It's easier than ever for small businesses to accept cryptocurrency as a payment option. Here are some ways your company can accept digital currency as a form of payment:
- Coinbase Commerce: Business owners can accept Bitcoin, Litecoin, Ethereum, and other cryptocurrencies using Coinbase Commerce. This platform is designed to make it easy for businesses to accept cryptocurrency. There are no fees as a business owner, and you can get started accepting bitcoin in mere minutes.
- BitPay: Use the BitPay platform to send, receive, and store your cryptocurrency securely. With a business account, you can accept payments online, both in-store or by invoice.
- PayPal: PayPal has long been one of the more popular ways for people and businesses to send and receive money. Now, the platform also allows shoppers to easily check out with your business using cryptocurrency.
- Dash: Of all the digital currency available, Dash is specifically designed for making daily transactions – a cup of coffee, groceries, or even booking a trip through a travel agency. The founders of this form of cryptocurrency make it easy for business owners to accept Dash as payment.
- Bakkt: The Bakkt App is another platform that allows users to buy, sell and send bitcoin, and it is another option for business owners.
- Shopify: This e-commerce platform allows your business to easily accept cryptocurrency as a payment method. Shopify partners with payment processors such as Coinbase Commerce, BitPay, and GoCoin.
- Etsy: Though Etsy doesn't formally accept bitcoin, users buying items from makers can still use cryptocurrency as a form of payment by selecting the platform's "Other" payment method.
What Businesses Accept Bitcoin?
As bitcoin becomes more popular, some major companies and well-known retailers accept it as a form of payment, though some of the big ones, like Amazon, still don't accept it. If you decide to accept cryptocurrency as payment at your own store, you'll be in good company. Here are some businesses that currently accept bitcoin and other cryptocurrencies.
Through the Lightning Network, you can order a pizza from Domino's using Satoshis, the smallest unit of bitcoin. One hundred million satoshis are equal to one bitcoin. When ordering through the Lightning Network, you'll enjoy a 5 percent discount on your pizza, and fees are less than 1 cent.
Travelers have been able to book flights and hotels using bitcoin since 2013. All these years later, the company remains dedicated to serving the crypto community.
Good news if you're looking for a date. Though it's free to create an OKCupid profile, you can make crypto payments to access special features during your search for love. The dating website has accepted cryptocurrency since 2013.
This coffee retailer giant uses the Bakkt app to allow customers to reload their Starbucks Card in the Starbucks app.
Overstock.com has partnered with Coinbase to accept bitcoin as a form of payment. At the checkout page, shoppers can select the "Pay with Bitcoin" option.
This leading digital gift card website allows shoppers to instantly shop for gift cards from hundreds of companies using their cryptocurrency wallets.
Newegg, an online retailer that sells computer hardware and consumer electronics, was one of the first major retailers to accept cryptocurrency in 2014. Using BitPay, shoppers can choose to pay with Dogecoin, Bitcoin, Bitcoin Cash, Ethereum, Wrapped BTC, Dai, and four U.S. dollar-pegged stablecoins at checkout.
Though it's not companywide, some Subway franchises will let you pay for your sandwich using bitcoin.
Namecheap is the first major domain registration company to accept cryptocurrency as a form of payment.
Over the years, various Burger King franchises worldwide have dabbled in cryptocurrency and not always successfully. In Russia, though, this fast-food chain franchise introduced its own virtual coin, the WhopperCoin.
Thanks to Tesla CEO Elon Musk, bitcoin has surged in popularity in recent years. And the electric car company has been accepting cryptocurrency on and off.
AT&T was the first mobile carrier to accept cryptocurrency when making an online payment. The company partnered with BitPay to offer this option.
Microsoft accepts payments for Xbox stores and some of the digital content it offers, such as apps, games, and videos, on Windows and Windows Phone.
Track Your Transactions Using Skynova's Accounting Platform
Whether you're accepting cryptocurrency, cash, checks, or debit or credit cards as payment, Skynova's all-in-one accounting system makes it easy to track and manage all your transactions. Our platform is designed to streamline the bookkeeping process for small businesses, simplifying the way you do business.
Use our comprehensive platform to create the documents you need to monitor your company's financial health, whether you're invoicing customers, requesting deposits, or providing receipts. Our system also automatically creates important financial reports like income statements, balance sheets, and cash flow statements.
Notice to the Reader
The content within this article is meant to be used as general guidelines and may not apply to your specific situation. Always consult with a professional accountant to ensure you're meeting accounting standards when accepting bitcoin and other cryptocurrencies as payment.