The popularity of cryptocurrencies in recent years has led big brands to consider accepting Bitcoin and other coins to pay for products and services. AT&T and Microsoft both offer ways for customers to pay with cryptocurrencies. NBA team Dallas Mavericks also allows customers to pay for game tickets with Bitcoin.
For today's customers, digital payments are king. A 2023 survey found that 73% of respondents prefer to shop and pay digitally. Expanding your payment options to include cryptocurrencies can help meet the demand for fast, flexible, and convenient payment methods. Here's how you can expand your POS capabilities to start accepting cryptocurrencies:
[Read more: Considering Accepting Cryptocurrency? What to Consider]
Understanding Cryptocurrency Regulation
There are numerous competing and vague cryptocurrency regulations that also apply at the state and local levels. “To accept cryptocurrency payments, you must have your own cryptocurrency account, which makes you an investor by default, which means you are required to comply with state cryptocurrency regulations,” FitSmallBusiness explained.
Bloomberg Law has a detailed state-by-state breakdown of cryptocurrency regulations to help you get started: It's also wise to be aware of any restrictions or restrictions contained in cryptocurrency platform policies: “Even if users can convert (or withdraw) their savings into U.S. dollars, not all cryptocurrency platforms are legal in the U.S. CoinGate, for example, is only legal in a handful of states,” FitSmallBusiness writes.
Configure the cryptographic gateway
Cryptocurrency payment gateways provide businesses with a way to accept digital payments and instantly receive fiat currency. These gateways are similar to credit and debit card payment processor gateways. Alternatively, you can set up a cryptocurrency wallet to receive payments in the form of cryptocurrency and store them in that form (rather than converting them to dollars). Some tools offer both gateways and wallets, so you can decide later which one is best for your business.
You need to make sure your Bitcoin payments are recorded on the same platform that records your other business transactions.
Leeron Hooley, Forbes
According to Investopedia, the payment process with a cryptocurrency payment gateway goes like this:
- Customers will be able to pay with cryptocurrency at checkout when transactions take place in-store, on the web or via the app.
- Customers pay an amount equal to the fair market value of the Digital Currency at the time of the transaction.
- Cryptocurrency payment services instantly convert your payment into your chosen currency (dollars, euros, etc.).
- The money is added to your provider's account and then transferred to your designated bank account at intervals determined in your service agreement.
This process incurs a service fee, which varies depending on the provider.
[Read more: How to Accept Bitcoin Payments]
Integrate cryptocurrency payments into your checkout process
Once you've properly set up your gateway, you'll need to let your customers know about this new payment method. This process may take some time depending on your POS, ecommerce platform, and other shopping channels you use. For example, PayPal has cryptocurrency built into their checkout solution, WordPress and BigCommerce both require integration, and Shopify has an easy plugin to help you get started.
To accept cryptocurrency payments in person, you may need a crypto-enabled QR code scanner or NFC terminal. If you want to accept payments using your mobile device, an app like Bitcoin QR Scanner can help.
Add cryptocurrency payments to your account
Finally, make sure you record any payments you receive in cryptocurrency. You'll need to report cryptocurrency to the IRS using Form 1040 Schedule D. Setting up your accounting software to record these payments will make tax season less stressful.
“You'll want to make sure your Bitcoin payments are recorded on the same platform where you record your other business transactions, which is easy to set up by integrating your Bitcoin transactions into your current accounting software,” Forbes writes.
Regulations change frequently and can have a negative impact on your business, so consult with an expert to ensure these transactions are properly recorded.
CO— aims to provide inspiration from leading, respected experts. However, before making any business decisions, you should consult with an expert who can advise you based on your individual circumstances.
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