Why should you
consider adding BitCoin
as a payment option?
According to Coinbase, a US based
bitcoin payment processor, more than
25,000 merchants are using their platform
to attract new customers. BitPay, another
Bitcoin Payment Service Provider, has over
20,000 merchants currently accepting bitcoins
with their payment interface. Two years ago this
number stood at few hundred.
Why are so many merchants interested in
According to Coinbase, on 27th of February 2014, the company has hit one
million Coinbase consumer wallets. At the start of 2013 that figure was
under 13,000. That is an astounding growth rate of 7,592.31%. As more
people start using the upcoming virtual currency, more merchants are
bound to follow suit and adopt it into their payment systems.
With Visa and MasterCard estimated to take
a 2 to 3 percent cut out of every card
transaction, by using bitcoin instead,
merchants stand to improve their bottom
line instantly by at least 2 percent.
there is no possibility for chargebacks and other payment related fraud. This
reduces the costs of operation by another several percentage points. This
coupled with the very low fees charged by bitcoin payment processors
should make any business consider adding bitcoin to their checkout process.
In addition, because bitcoin transactions are irreversible
Several major payment processors have their own turnkey solutions that
make bitcoin payment integration a breeze. Let’s start with US based
Adding bitcoin to your payment
options today is easier than ever.
In addition, this fee only applies if you choose to convert bitcoin into your
local currency, US Dollars for example. There is no fee if you decide to keep
your funds in bitcoins and you just withdraw them to your local bitcoin wallet.
Furthermore, the firm offers custom solutions for merchants who already
process over $1 Million in sales per month. (for more info click here).
• Pay/Donate/Subscribe Buttons.
• Hosted Checkout Pages.
• Email Invoices.
• Shopping Cart Plugins.
• Point Of Sale.
• Custom Integrations.
• Recurring billing.
• Free micro-transactions.
Here are some of Coinbase’s professional
the company also allows you to buy and sell bitcoins for US Dollars.
The fee for this is 1%. If you live in the States, you can also link your
bank account to Coinbase to facilitate quick and easy transactions.
In addition to being a payments processor,
How to accept bitcoins
with Coinbase if you own a brick and
You can accept bitcoin at your brick and mortar shop by using a mobile
device. Currently, due to restrictions by Apple, Coinbase’s app cannot be
used with an iPhone/iPad. Luckily, the app works on android and android
phones/tablets are much cheaper than their Apple equivalents.
The picture below shows the simple few step process.
1. Enter the details of the sale
2. Tap “Request payment” to display the QR code
3. The customer scans the QR code with their own phone and taps to pay
4. The customer receives payment confirmation, so do you — sale
You can read more about Coinbase’s POS solution here. You can download
the android app on Google Play.
BitPay is another popular choice for online
and offline bitcoin businesses.
The company has several payment plans and boast to have ‘’the
world’s first All-Inclusive Processing with Zero Transaction Fees, and
Zero Hidden Charges.’’
Payments to bank accounts are made every business day.
While payments in bitcoins are sent to your btc address at least once per
calendar day. The company has daily direct deposits to 33 countries
(Click here for more info).
Similarly to BitPay, Coinkite has a tiered payment plans system. The
options start at the starter pack that is free but carries a charge of
1% on withdrawals and 1% charge on POS (Point of Sale)
transactions. By paying $29.46 per month you can cut those fees
down to 0% (Check their pricing table).
Coinkite has two
distinctive features that
are better suited for
offline shops, a dedicated
Bitcoin Payment Terminal
and a Bitcoin Debit Card.
Here’s what the terminal
A Retail Payment Terminal that is WiFi
only and costs $491. The option with
the QR code scanner (the Exchange
Payment Terminal) will set you back
$819. Both terminals allow you to
take Bitcoin and Litecoin payments.
There are two terminal
versions to choose from
You can learn more about Coinkite’s
Any two individuals that have access to the internet are free to
engage in commerce. While the three options outlined above make
the whole process much easier, if you own a very small business
and you’re not yet sure if the bitcoin ‘’gamble’’ will pay off, you
can try taking bitcoin payments on your own.
Bitcoin is a completely
decentralized currency that
doesn’t rely on any third parties.
MultiBit is an easy to use bitcoin client that allows you to send or receive
bitcoin payments. One of the major advantages of MultiBit over the traditional
Bitcoin-qt client is that you can use MultiBit without having to download the
entire bitcoin blockchain (which is over 5 GB in size at this point).
There are a lot of ways you can do this
but in this example I will use MultiBit
You can download MultiBit by going here, the options on offer are Windows,
Linux or Mac based clients. After installing the client you will be presented with
a screen that looks something like this:
Check an easy step by step process on how to
accept a payment by checkin our main article.
Confirmation and Fees
This translates into a charge of around 5.5 US cents at current prices.
Due to Bitcoin’s persistently high exchange rate, the minimum fee will be
cut tenfold to 0.00001 BTC or 0.55 of a US cent soon.
As of March 1 2014, the minimum
bitcoin fee is 0.0001.
All Bitcoin transactions need to be included in a public ledger
known as the blockchain.
Because of this, btc transactions need a certain amount of time to both be
included in the blockchain and then to propagate around the network. This
time is measured in ‘’confirmations’’. This is a somewhat complicated
subject, you can learn more about this process by going here.
How many confirmations should you wait for?
Taking into account the fact that a transaction with 6 confirmations can take
up to an hour to propagate around the network, for smaller amounts it is
recommended to use 1 or even 0 confirmations. For very small bitcoin
payments, like purchasing a cup of coffee for example, a payment can be
considered as confirmed as soon as it is seen on the network.
Take your time and download MultiBit or
one of the other bitcoin clients here.
All of this probably seems
complicated and a bit
overwhelming to someone who
is new to bitcoin.
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