Crypto may or may not survive as a currency. But if you’ve read our article on what cryptocurrency is and how it works, then you know that you, as a business owner, can play an important part in crypto’s survival. For crypto to survive, a large number of businesses have to accept crypto payments. So, how to you do this easily and conveniently? We show you how.
- To Accept Crypto Payments, You Have to Go Online
- First Step to Accepting Crypto Payments Is to Set Up a Crypto Wallet
- Do You Need a Cryptocurrency Gateway to Take Payments Online?
- Some Crypto Gateways Can Easily Integrate with Major eCommerce Platforms
- Why Should a Merchant Accept Crypto Payments?
- A Suggestion on How Small Businesses Should Approach Cryptocurrency
To Accept Crypto Payments, You Have to Go Online
As we explained in our what-is-crypto article, cryptocurrencies exist electronically. You can’t pull out a handful of crypto coins from your pocket to pay a merchant.
So, for merchants who wish to accept crypto payments, you’ll have to complete the transaction online.
First Step to Accepting Crypto Payments Is to Set Up a Crypto Wallet
One of the things that distinguishes crypto from fiat money is that you don’t keep your crypto coins in banks. With fiat money, when money is transferred from one person or business to another, a bank keeps track of where the money is. This way, you can’t spend the same money twice.
But crypto doesn’t require banks. Instead, it relies on the blockchain to keep track of who owns which coin. You can only transfer your coins to someone else if you have the correct private encryption key. So, your private key acts as a proof of your ownership of the coin.
This proof of ownership is stored in a crypto wallet. If you ever lose access to your crypto wallet (e.g. forgot your password), you lose your crypto coins because you can no longer prove you own them.
So, for you to be able to accept crypto payments, you have to set up a crypto wallet first. Some crypto wallets are free, but others—usually a hardware storage device—are not. Some wallet companies keep your private keys for you (this is called a custodial wallet). But with others, you have full control over your keys.
Some of the better-known custodial wallets include:
If you want full control over your private keys, the better-known crypto wallets include:
- Coinbase Wallet
- Exodus
- Trezor Model T (hardware wallet)
- Ledger Nano X (hardware wallet)
- Crypto.com
There are lots of other crypto wallets, but some of them can only keep just a few types of cryptocurrency. The ones we list here can hold lots of different types of crypto.
The hardware wallets cost money to buy, but software wallets typically are free. The wallets make money when you exchange crypto coins.
Do You Need a Cryptocurrency Gateway to Take Payments Online?
The quick answer is that you don’t need a crypto gateway to accept crypto payments. But the gateways make the process a lot easier.
Because crypto fluctuates so much every day or even every hour, the better way to take crypto payments is to price your goods or services in fiat money. Then, when your customer is ready to pay, convert the fiat money price into crypto, so the customer pays the right amount. You can do this manually, but you can also use a gateway.
The gateway will automatically convert the fiat money price to the crypto price of the type of coin your customer chooses to pay in. Then, once the payment is finalized, the gateway will either deposit the payment (in crypto) to your crypto wallet, or it will convert the crypto back to fiat money for you.
Gateways aren’t free. In addition to the transaction fee you have to pay for every crypto transfer, gateways charge you another fee on top of this. The gateway fees vary, but some of the most popular gateways tend to charge in the 1% range.
To use a crypto gateway with your online store, you have to integrate it into your store. Once you’ve integrated the gateway, you’ll see a pay with cryptocurrency or similar button on your checkout page for your customer to pick from.
All gateways will let you integrate the payment button by adding code to your checkout page. Or—and fortunately for those of us who can’t or don’t want to deal with code—you can add the gateway using a plugin available on most of the popular eCommerce platforms.
Some Crypto Gateways Can Easily Integrate with Major eCommerce Platforms
If you build an online store, there are just a handful of popular platforms you can use. Some of them have crypto gateway plugins that you can easily install. Unfortunately, not all gateways have plugins for all platforms.
For this article, we looked at crypto gateways that can take many types of cryptocurrency. We left out some popular gateways like PayPal because they only take limited types of crypto. The four gateways we investigated are:
From here, we looked up which eCommerce platform these gateways have built plugins for. We found four major platforms with lots of crypto gateway plugins. These are:
- WooCommerce
- Shopify
- Magento
- Wix
Here’s a table on which major crypto gateway’s plugin is available on which major eCommerce platform:
| WooCommerce | Shopify | Magento | Wix | |
|---|---|---|---|---|
| Coinbase Commerce | yes | yes | ||
| BitPay | yes | yes | yes | yes |
| Coingate | yes | yes | ||
| Crypto.com | yes | yes |
As you can see, if you use WooCommerce and want to accept crypto payments, you’re in luck. You get your pick of the major crypto gateways. You’re pretty set too, if you use Shopify.
There are, of course, other crypto payment gateways. And, for each eCommerce platform, there are other crypto gateway plugins. However, the four mentioned above are the biggest and most reputable ones that can help you accept multiple types of cryptocurrency.
If you’re just starting to explore the world of crypto payments, we think you can’t go wrong with any of these gateways above. Once you understand the payment preferences of your crypto-paying customers, you might wish to explore other gateways to make sure you’re getting the best deal.
Why Should a Merchant Accept Crypto Payments?
Other than as a novelty factor, there are advantages for merchants in some industries to accept crypto payments. For one, crypto payments aren’t as regulated by governments as fiat money payments. This means that, once a payment is made, the transfer is final. You won’t have to deal with issues of fraud or buyer’s regret, for example.
If you wish to refund your customer their money, you can do so, of course. But the customer can’t file a chargeback claim against you. There is simply no such thing as crypto chargebacks because there are no consumer protection laws on crypto transfers. For low-risk businesses, this may not make much of a difference, but for high-risk businesses, not only do you not have to deal with chargeback claims, you won’t have to deal with reserve accounts either.
For some businesses, all this can be a good thing.
A Suggestion on How Small Businesses Should Approach Cryptocurrency
As we write this article, getting and holding cryptocurrency is still a gamble. The value of each coin can go up tremendously in a short time, or it can go to zero. As a merchant, maybe you want to get into the frenzy and see if you can make some easy crypto by taking it as a form of payment.
We don’t blame you for the temptation. But we do have a suggestion on how you should speculate in crypto to avoid losing too much money.
We think that it’s smart to take crypto only if you provide services. This is because, if the value of crypto goes to zero, all you’ve lost is your time. Any service provider who’s been in business for a while will have had clients who refused to pay. It’s not pleasant, but you don’t lose your shirt over it. So, if your crypto goes to zero, you treat it as a client who didn’t pay. You move on.
But if you sell goods, we recommend you approach crypto payments with caution. You’ve had to pay for the goods you sell with fiat money from your pocket. If crypto goes to zero, you’ve lost fiat money (and time). So, sellers of goods speculating in crypto are taking a higher risk than sellers of services. We recommend approaching crypto with a lot of caution, if your business falls in this category.
At the end of the day, because cryptocurrency isn’t widely used, you have a choice on whether or not to take it as payment at all. Crypto isn’t like credit or debit cards, where customers might shop elsewhere if you don’t take the cards as payment. Right now, the choice is all yours.
Questions? Comments?
