Do you want to learn how to be paid in Bitcoin with a low risk of losing money in business? Many companies are skeptical about receiving payments in crypto, mainly because of volatility and tax issues. What’s more, the US Treasury and Internal Revenue Service (IRS) does not consider cryptocurrencies a legal tender. That said, the organization demands that businesses accepting crypto must report cyber currencies received from customers and losses or gains in such coins’ value. Also, companies receiving bitcoin payments must pay capital gain tax because of the nature of the currency. In any case, we’ll show what you need to learn about crypto payments and how to use them for your business.
Why Should Businesses Adopt Bitcoin Payments?
Cryptocurrency uses a technology that’s secure, transparent, and decentralized. More than that, it assures fast, uninterrupted international transactions, which can make buying and selling easier for businesses. Receiving payments using conventional credit/debit cards or traditional fiat have been helpful over the years, but they have some limitations now, which include some of the following:
- Credit/debit card transactions may encounter reversals, bounce backs, declines, and many other common issues.
- Banks and exchange platforms often charge business owners as high as 3-5% for payments they receive from customers who purchase their products online using these channels.
- Using traditional fiats is limited to offline transactions. That said, you have to look beyond fiat if you want to take your business to the online or international community.
There are several other shortcomings of credit/debit cards and traditional fiat, which cryptocurrency has significantly overcome over the period. Although cryptocurrencies have some drawbacks, too, receiving payments in crypto may be more advantageous. For instance, the crypto space has no international barrier; anyone from any part of the world can purchase an item online and pay in crypto without qualms. Moreover, BTC online payments and other crypto charge less commission than credit/debit cards. In most cases, the commission for receiving crypto payments is less than a percent. Additionally, crypto transactions are irreversible, making it impossible to have bounce backs or reversals, declines, or unsuccessful payments. It may only happen in very few cases.
Why Are Businesses Slow in Accepting Crypto Payments?
Several factors affect businesses’ disposition to receiving crypto payments, but government tax requirements and price volatility are the primary issues. These two challenges account for why most companies are skeptical about crypto payments. Imagine accepting bitcoin when it was worth about $20,000 before plunging to less than $15,000. If you do the math well, you’ll realize that a lot of money would have gone down the drain. The level of uncertainty and the difficulty in predicting crypto’s future value, especially bitcoin, is a reason to refrain from transacting with crypto for many business owners.
Though cryptocurrencies will likely attain a significant level of stability, it’s better to play it safe for most businesses until then. Despite the current state, however, there are ways to play it safe with bitcoin payments; we’ll explore some options later in this article. The other factor influencing the way people accept bitcoin for business is tax regulations. Some business owners prefer crypto payments but are reluctant because they either don’t understand the tax regulations or aren’t willing to pay the fee.
What Is the Best Way to Get Paid in Crypto for Businesses?
It’s highly risky for businesses to get paid in crypto directly, mainly because of their losses from unstable prices. That said, the best practice is to use a reliable BTC payment method since bitcoin is a massively adopted cryptocurrency. Most businesses that accept bitcoin and other crypto use a third-party exchanger to receive payments, asides from companies like Facebook, which has its branded cryptocurrency: Libra.
Before we start exploring how to receive Bitcoin payments for your business, we will quickly show you how the system works:
How Bitcoin Payment Systems Work
Popular bitcoin payment services such as NOWPayments (yours truly), BitPay, CoinBase, CoinMe, CoinGate, SpectroCoin, and so on offer several mediums for businesses to adopt bitcoin payments.
Some solutions include integrating with e-commerce platforms like PrestaShop, Shopify, and Magento, for payments via in-store point-of-sale (POS) systems. Each of them can be found among NOWPayments’ solution
Besides POS systems, it’s possible to create a payment method using other platforms. For instance, a techy Chinese kid may develop an Android app for receiving bitcoin payments.
What’s important is these payment systems immediately convert the bitcoins into traditional fiat with less volatility and tax regulations. See a more concise guide on how bitcoin payment systems work.
Step-by-Step Guide on Bitcoin Payment Workflow
Below is a short, step-by-step guide on how bitcoin payment systems work.
- Your customer chooses to make a bitcoin payment at checkout.
- They pay the appropriate amount at the current exchange rate at the time of purchase.
- The bitcoin payment service converts the bitcoins into a preferable currency instantly.
- Depending on the platform, you’ll complete some processes and finally receive the money into your local bank account.
How to Receive Bitcoin Payments in Your Business?
Businesses can set up online or offline channels to receive Bitcoin payments on various platforms.
With NOWPayments, it is quite easy.
All you have to do is
- Sign up at our account page;
- Activate your account via the e-mail that we have sent you;
- Sign in into your account and open the Dashboard Page;
- Enter the wallet for funds withdrawal on “Outcome wallet” page;
- Press “Add new key”. You will get an API key, please save it;
- Use your API!
Accepting crypto payments for your business is more advantageous for the younger generation that is more conversant with cryptocurrencies. Moreover, with the support of reliable crypto exchange platforms, you no longer need to fear for your profit.