How to Accept Bitcoin Payments as a Merchant

Each Bitcoin price increase brings in a new wave of merchants. Bitcoin's jump to $1,100 in 2013 pushed merchants like Microsoft, NewEgg, TigerDirect, and Dell to accept Bitcoin payments online.

Accepting Bitcoin payments makes sense for any business. This guide will explain the benefits of accepting Bitcoin and how to integrate it with your store or business.

What are the Benefits for Merchants?

Low Fees

Most Bitcoin payment processors charge 1% or less per transaction. Most merchants pay when 2.9% + 30¢ per transaction when accepting PayPal and credit cards. Better yet, accepting Bitcoin without converting bitcoins to local currency is completely free.

accept bitcoins
With BitPay, small merchants can accept up to $1,000 per month for free.

Fast

Unlike credit card payments, which take weeks to complete, Bitcoin transactions can be accepted and verified as complete in minutes. Bitcoin payment processors take on all risk in the case of a failed payment.

No Chargebacks

There are no chargebacks with Bitcoin. Any confirmed transaction is protected by the network and can't be reversed. Remember: Bitcoin is digital cash.

No Exchange Rate Risk

Most Bitcoin payment processors assume all exchange rate risk on the Bitcoin price.

Global

Businesses can accept bitcoins from any country in the world, with no risk of fraud or chargebacks.

New Customers

Bitcoin users love support Bitcoin-accepting merchants. Get the word out that your business accepts Bitcoin, and you'll get access to a new wave of customers.

Features to Look for in a Bitcoin Merchant Processor

  1. Can I get a unique Bitcoin address for each transaction?
  2. How is the exchange rate calculated?
  3. How fast are payments approved?
  4. What is my exchange rate risk?
  5. How do I receive the funds?
  6. Are there any fees involved?
  7. How can I see a listing of my sales?

Bitcoin Payment Processors

Bitaps - Free / 0.0002 BTC
Bitaps provides Bitcoin processing RESTful API without registration and restrictions. API includes basic processing, affiliate and mass payments, Bitcoin smart contracts to keep distributed hot wallet and cold storage balances, standard Bitcoin ledger API, market prices and a lot of other tools for developers.
BitPay - Free / 1%
BitPay is the world's largest Bitcoin payment processor. It's used by major companies like Microsoft, Rakuten, and Newegg. Merchants on BitPay's starter plan can accept up to 30 transactions or $1,000 of Bitcoin payments per month for free. Larger merchants pay just 1% per transaction.
Coinbase - Free / 1%
Companies like Dell, Expedia, and Overstock use Coinbase to accept Bitcoin payments online. Coinbase charges just 1% to convert bitcoins to fiat, and the first $1,000,000 of transactions are completely free. Like BitPay, merchants using Coinbase to accept Bitcoin can select to keep any percent of each payment as bitcoin.
Stripe - 0.8%
Merchants using Stripe can enable Bitcoin payments in a few minutes. While Stripe charges 2.9% + 30¢ per credit card transaction, each successful Bitcoin payment costs just 0.8% with a max fee of $5.
Shopify - Free / 1%
Shopify merchants can accept Bitcoin payments through BitPay's API.

Let People Know!

Once your business starts accepting Bitcoin payments, be sure to get the word out!

Online stores should add an image to the store footer so people know that Bitcoin payments are accepted. You can use the images below, or a more clean design like this:

Bitcoin Accepted here

If you operate a Brick and mortar store, add a sticker to your store window. The most basic and common sticker is provided below (click here for higher resolution):

Bitcoin Accepted here

Point-of-Sale (POS) Transactions

In retail stores, bitcoins can be used side-by-side with local currency and credit cards. The merchant will need a point-of-sale device or application to accept payments. BitPay's Bitcoin Checkout apps for iOS and Android make it easy to accept Bitcoin payments from a mobile phone or tablet.

Another tool many people like to buy is a Bitcoin debit card which enables people to load a debit card with funds via bitcoins.

Bitcoin For Banks

TRANSCRIPT: Bitcoin For Banks

INTERVIEWER: Sonny is a very well-seasoned businessman in the payment industry. He has over 15 years in the payment industry. He used to be a former VP for Jumio and he now is the CCO, the Chief Commercial Officer of BitPay, which is the biggest payment processor – bitcoin payment processor in the world.

So he's in charge of managing wholesales and business development at the company. So thank you, Sonny, for taking the time to come and visit us and share your experience with us.

MR. SINGH: Great. Thank you, Diego. First off, forgive me for my American accent. So my name is Sonny Singh. I am the Chief Commercial Officer for BitPay. And the first think I'd like to say is that I am not a PhD, a scientist, a programmer. So all the stuff these guys talked about earlier, I understood maybe a small part of that. What I am going to talk about is how regular merchants and businesses around the world are actually using bitcoin and blockchain technology. So I'm going to speak in hopefully words we can all understand and -- okay, let's try this one again now.

So again, I'm not a PhD or a scientist. I'm going to try to bring, you know, my job is to bring bitcoin and blockchain technology to the masses, and you know, and make a business case for businesses and enterprises around the world to use it.

So BitPay is the largest provider of cluster of bitcoin in the world. Think of us like First Data. So we help merchants and businesses all over the world enable bitcoin and blockchain technologies.

So I always like to start off with this slide about, kind of, the landscape of the bitcoin community. You can see the rapid growth of the VC investment in the bitcoin space. And the most important number is it's grown to 3X this year from last year. And so having been based in Silicon Valley for 15 years and seeing a lot of trends and companies get funding back from Google, Facebook and all of that, we're seeing the same kind of ecosystem being built.

And this $900 million, what that means is, that means people from Google, Facebook, the smartest scientists and engineers and entrepreneurs in the world are leading those great companies to join the bitcoin ecosystem. That means more jobs are being created. Silicon Valley is, you know, fast predominantly becoming a bitcoin hub, as well as, you know, cities like London. I think there's a great opportunity for Buenos Aires and Paolo, other cities in the Latin America to really get -- become a bitcoin Latin American hub to help get jobs out here, create that financial hub that the bitcoin community needs for Latin America. And with this type of venture capital money that's become 3X in the last year, it's showing now to become evident now that this is actually happening throughout the world.

BitPay actually, we have raised $30 million last year. That was our Series A round. At that time, it was the largest ever bitcoin fundraising round. We look at bitcoin as truly a global digital currency. So our investors ranged from Index Ventures, which is the largest European VC firm, to Richard Branson, very well-known obviously in Europe as well, to America, we raised from Founders Fund, which is Peter Thiel, the founder of PayPal, as well as Jim Robinson, the former CEO of American Express. And in Asia, we raised money from Li Ka–shing, who is the wealthiest person in Asia, as well as Jerry Yang, the former founder of Yahoo.

And those are very important, our investors, because it helps keep credibility in working with large corporations like Microsoft and large banking partnerships that we need to create all throughout the world. And since that time, we've been passed. Many other bitcoin companies have raised much bigger rounds. So it shows how the industry, just in the last 12 months, has changed so much.

So when I joined BitPay 12 months ago, the industry was still, kind of, starting out, trying to find its, you know, footing so to speak. And then we raised the big round and then since that time, you've seen companies like Goldman Sachs invest in bitcoin now. Cisco, Qualcomm, NTT DoCoMo, Rakuten, IDG out of China. So you're seeing strategic investment happening from all over the world now, where 12 months ago that wasn't even thought of. And the investors in Silicon Valley are all the top venture firms like Andreessen Horowitz, Founders Fund, Greylock Partners, Benchmark, these are all the same investors that helped start companies like Facebook, Google, Cisco and really the backbone of the internet.

So where are we at today now? You know, two years ago again, in this chart, bitcoin would not have been on that. So it's just showing now how much of a traction bitcoin has gotten in just the last two years actually. It's really come a long way and I imagine the next two years would be much higher actually. Everything seems to be happening in exponential terms in the bitcoin community. So it's very exciting to see that growth and see what is happening, and I don't even know 12 months from now where this is going to end up actually.

This chart represents the payments that are happening, the transactions that are happening every day. So the earlier speakers talked about how this is a public ledger, everything is documented in the blockchain. That's actually true. I recommend you guys go into www.blockchain.info. It's a really cool website. I don’t really understand a lot of it, but you see transactions happening in real-time.

So you actually see all of the transactions being recorded with some real code or whatever is around it, but you can see it happening. It's really interesting to look at. It goes back to the theory that bitcoin is not anonymous. So if you are trying to do something illegal with bitcoin, it's not a smart thing to do actually. Everything is recorded in a public ledger for the rest of the world to see.

So how are merchants and customers and global brands around the world actually using bitcoin and what can they use it for? You know, we have a quote here from the former founder of PayPal, former CEO of PayPal, a big advocate of bitcoin, "People thought PayPal might be competitive to bitcoin." There are open-arms with embracing this type of stuff actually.

My favorite quote is from Dell. So Dell has been accepting bitcoin now for the last year almost. After one year, they gave this tweet, "There's no reason for a merchant not to accept bitcoin anymore." So 12 months ago, people like myself were at conferences speaking to merchants out there explaining why they need to accept bitcoin. 12 months later, merchants like Dell, Overstock, Microsoft are actually speaking to merchants now explaining the value of why they are accepting bitcoin and the value they're getting out of this, and why the other merchants in the crowd should be accepting bitcoin too. So we've really seen this ecosystem changed quite dramatically.

So this noisy slide of all the different merchants is actually noisy on purpose, because to show all the different types of brands that are accepting bitcoin. There's over a 100,000 merchants accepting bitcoin globally right now ranging from non–profits like Green Peace to the Fortune 100 companies like Microsoft and Dell, to small, you know, restaurants around the world. Anyone who accepts credit cards who wants to attract new customers, bitcoin is a perfect use case and payment option for them.

Companies like BitPay, we make it very seamless for a merchant to accept bitcoin. Our job, when we go talk to the payment teams at, you know, Microsoft or Zynga or Newegg or whatever, they're not quite familiar with how bitcoin works. They're just like everyone else in the crowd. They're unsure how this really works. And BitPay makes it very easy for them to set up.

So why would a merchant want to accept bitcoin? This is actually – the first is lower cost. So when you accept bitcoin – when you accept credit cards, as you know, the merchant pays anywhere from 2% to 4% credit card transaction fee. With bitcoin, we pretty much eliminated transaction fees. We've lowered this down to 1%. So for every transaction now that happens on the bitcoin ecosystem, let's say with a merchant, they just pay 1% fee. So they are already saving 2% to 3% for each transaction. The great thing about that, Dell actually did a $50,000 computer order a couple of months ago. So with bitcoin, a $50,000 order, that's very small payments fee versus what it would have been like with a credit card.

So next part, lower risk, so when Dell shipped that $50,000 order, it was just a very high-risk ticket item. The odds of chargebacks are very high with that. With bitcoin, there are no chargebacks. So I actually mean that 100%. There are no chargebacks. The merchant can do refunds if they want, but it's up to the merchant. So when someone makes – pays with a bitcoin transaction, it's essentially like paying with cash. They now have the option. They now can ship out that goods and not have to worry about the consumer saying he wants his money back and getting money back and chasing a Visa or how that works in the payment card network actually. The liability has shifted from the merchant to the consumer actually. So Dell has no problems shipping that $50,000 order and having to worry about charge backs or fraud.

The next reason why you might want to accept bitcoin is to sell globally. Overstock.com said it best when they went live accepting bitcoin. They essentially went live and opened themselves up to five billion shoppers around the world. There's many shoppers around the world that might not have credit cards. How do they shop at Overstock.com now? Well, using bitcoin now, they can accept payments from anywhere in the world, and since there's no chargeback risk, they have no problems shipping goods anywhere in the world because they've already got paid.

So really great use cases for the merchants, and then also a consumer privacy and consumer data. So this is a great reason why consumers like bitcoin. But the merchants also like it because they don't hold any consumer private data. They don't hold their credit card number. There's no PCI issues actually. So every day, you always read about in the news, companies being hacked for their credit information and all that. Well, the merchants aren't holding any consumer privacy data surrounding credit cards for bitcoin transactions.

So also, for the consumers, you know, I've got my credit card and, you know, all the different internet sites now in America, I've lost track of it now. My debit card is out there. My credit card is out there now. I now keep my bitcoin wallet for online digital purchases now. So every time I'm online now, I don't like to use my credit card. I usually like to pay in bitcoin actually because I don't have to worry about my credit card number being left out somewhere and all that. And we're starting to see that trend more often now over and over again.

But what is the really main reason why merchants really like bitcoin? Well, they want to acquire new customers. They want to increase new revenue. And with bitcoin, we're seeing this quite often and the great thing about acquiring new bitcoin customers, these are your merchant's favorite type of customers. They actually spend more. They come back more often and they refund less. I'm hearing this over and over again from all my merchants actually.

So one of our customers, Takeaway.com, their average order ticket item is 2X with bitcoin than with U.S. dollars, and this is a food delivery service. Another customer, Destinia.com, this is a travel site, again higher ticket items with bitcoin versus travel – versus credit again. And again, Destinia as travel it's high risk too with chargebacks. So not only they're saving more money in the transaction fees, they're getting higher ticket items.

One of our merchants is a $1 billion retailer and they went live a year ago, and here is, kind of, some of the value they thought. So first, the day of the launch, they get a lot of marketing value, the bitcoin talks about this merchant being live, it's, you know, a great exposure for the merchant. They got over 60% site increase in traffic that day alone. Obviously the tweets mentioned and all that, it got them a great exposure that they did not expect. They didn't think this would be a big deal to accept bitcoin. They got all the users come in their site.

And then based off that in the first 180 days, these are the stats they got. So they had over 5,000 orders. But more importantly then, 42% were from new customers. So think about that. It costs the merchant nothing to set up, to accept bitcoin. It doesn't – there's no upfront fees. It cost them what, an engineer one or two days of work essentially to set it up. And for that amount of time, they just acquired 42% new customers, and these customers were spending 29% higher than credit cards. And of that, 69% came back and shopped again, or had spent over $1,000.

So after they start working with us for six months, they came back to us and say how can we get more bitcoin customers? This is great actually. We want to get more bitcoin customers. These are our favorite customers. And they actually gave a quote. They said, "Accepting bitcoin is similar to like accepting American Express. It kind of caters to a higher-end person, but without that credit fee associated with that and all the hassle involved with that too."

So you're seeing, again from the merchant's side of view, there is absolutely no risk. And so when a merchant, let's say, when a consumer goes to one of these sites to buy, let's say goes to Dell to buy a computer equipment for, let's say USD 300, and what happens is when they got to purchase it, it says do you want to purchase in Visa, MasterCard or Bitcoin and they click on bitcoin. It says, okay, USD 300 equals let's say one bitcoin, and they hit send. BitPay takes that one bitcoin and then we settle with Dell USD 300 the next morning actually, similar to a credit card payment.

So all these merchants or most of these merchants don’t ever take possession of bitcoin, don’t get involved with the bitcoin price fluctuation. Their accountants have no problem with it. It's just a checkout option to them, similar to Visa or MasterCard. We also have some merchants that accepted payments in bitcoin and keep it, and that's up to them. But a lot of the global brands can't get involve in currency fluctuations. It's too hard in their accountant books. So they just have us handle everything.

So again, processors like BitPay have made this very seamless and easy for merchants to accept bitcoin with no risk at all. I mean, every time I call up a new merchant do you want to accept bitcoin, I hear the same thing. No, we would never accept bitcoin. It's – we don't know what it is. It would not work for us. I say, great, what if I told you never take possession of bitcoin. You will increase new customer revenue 1% to 2% and there's no chargebacks. They say, oh, I didn't realize that, and now they're interest in it. And that's how you get the merchant adoption to go very fast.

The other great thing that's happening now in the last six months, I would say, is that payment processes have now started to adopt bitcoin. It's great that we go out and sign up to Dell's, Expedia's, Overstock's, Newegg's, TigerDirect's and Zynga's directly but they all work with payment processors and they'd rather have that all installed to the payment processor. So now, you're starting to see payment processors integrate with companies like us to offer a bitcoin solution.

So a couple of key companies I want to talk about are ones that are really growing rapidly like Adyen or Stripe or Braintree. So Adyen is the backend provider and they got a large office here in Sao Paolo for Facebook, Groupon, Spotify, Dropbox, AirBnb. They just announced they do Uber's payments globally.

And so this gives an option for all of those companies now accept bitcoin through Adyen without having to deal directly with BitPay. Braintree and Stripe, same kind of companies too, working very great with e-commerce companies around the world, have offered the same type of payment option too for their customers. And you're starting to see a lot of these other ones in Latin America now starting to take off. And that's where adoption will grow much more exponentially than having directly talked with Virgins ourselves.

So that's, kind of, how the merchants are using it now and then we've also started to see a big shift in the amount of people now entering the bitcoin ecosystem. So one of the speakers talked about it earlier, the type of names that are, you know, attracted to this industry and I've never seen anything like this actually. So from BitPay, we had Arthur Levitt, the former Chairman SEC, come join our board of advisors. Arthur is very active. He attends all our board meetings, help us out with rules and regulations and it's just really amazing to see these type of people now entering the space.

Lawrence Summers, former Treasury of the USA joined. Dee Hock was the actual founder of Visa. He joined in a bitcoin company. So every finance – a lot of financial executives that are the leading minds globally in finance are now teaming up with bitcoin partners because they want to a part of this space. They see it truly is cutting edge. People might think Visa or Citibank might find this competitive, but they don't know at all they've embraced this again. They want to work with this type of companies, this type of technology. Bill Bradley, a former Senator, and it's just been amazing. John Reed, a former CEO of Citibank, and these guys have all come to embrace this community, and it's really something like I've not seen before actually.

So we talked a lot earlier this morning about blockchain and the theoretical use and all that type of stuff. Well, what we're seeing now is banks are actually trying to learn how to work with the blockchain. So I'm going to talk about some of the financial, you know, companies we've seen what they're up to, a lot of them are still secret and stealth about what they're doing, but they have announced publicly that they are working with the same type of stuff. BitPay is working with many banks but we can't talk – discuss what we're actually trying to do with them.

First up is NASDAQ. So NASDAQ has been a big proponent of using the blockchain technology, and so they believe for their private marketplace – NASDAQ has a private marketplace in the States, they will actually use a blockchain to, kind of, secure and register all the transactions of shares in the blockchain. The great thing about this use case though is that can go live in Q4.

So most of these companies that are talking about the blockchain or talk about in pilot or kind of their labs and stuff like that. NASDAQ has said on the record that they will be live in Q4, which is a couple of months from now. So this would be hopefully the first public use of a blockchain by the financial institutions to see how this works, to kind of audit and track share transfer and things like that.

Overstock.com, who has been -- you know, their CEO has been a huge fan of bitcoin for many years, he's actually launched a whole different crypto-bond thing he's working on. He's got his own exchange he's doing. He's got a lot of different use case he's working on, but more importantly though is, he sees that he would sell this with bitcoin and blockchain rather than T+3 immediately, and banks see this also. This can be huge in settlement costs, in settlement times where it takes three days to track the shares and all that type of stuff. This can all be done now instantaneously.

Other banks that we see, and it's across the board now. Everyone now has launched a blockchain pilot or initiative. We're seeing it all throughout the world, not just in America but in Europe, South America, global banks everywhere. BNP Paribas, they had an analyst write a whole report on the blockchain. You know, they're trying to add towards the currency funds. Again, these banks don't actually specifically say what they're going to use it for. They just say that, hey we're now working with this and investigating it.

Citi has gone quite far. They've actually built three blockchains on their own and starting to play with that, as well as working with Citi Coins, they kind of launched their internal coin system called Citi Coins. UBS has built a whole blockchain lab in London. So we're seeing this quite often now where people are, you know, announcing to the media, we're building a blockchain lab and we're working with some – and they're hiring scientists now. So a lot of companies you see job descriptions now are looking to hire blockchain experts to help build this up for them.

Barclays just the last month, boom, another project they're announcing pilot. Again, they don't say what they're doing with it so I can't talk in detail and we've got NDAs with a lot of these banks so we can't talk about it either. But they're all trying new things and again it would be interesting to see how long it takes before Barclays and UBS actually roll out in production though. It's one thing to have it in pilots in their labs and all that, but I'm curious, you know, how long does it take for them to roll out in production. You know, banks and IT traditionally don't move that first, because they're, you know, they want to make sure everything is done properly. So it would be interesting to see when they actually go live. That's why NASDAQ going live in Q4 of this year is going to be very exciting to see how that actually works out.

Central Banks you also see now are starting to get involved and also the consulting firms too, like IBM. So IBM now is creating a whole blockchain practice around this, just trying to work with the banks themselves and we're starting to see really everyone really looking at this and let's see where it comes out, you know. Right now, you know, we work with them, but we also work with them on a merchant payment acceptance side. And then we also have a third use case that no one's really touched upon too much, but we work on payment distributions with bitcoin.

So we accept bitcoin from merchants but then we can also distribute bitcoin on behalf of merchants or things like that. So what that really means is, at BitPay we work with our payroll vendor to allow the payroll vendor and several others to pay employees in bitcoin. So at BitPay, we have over 80 employees and every one of the employees takes part of their paycheck, some do all of their paycheck in bitcoin. So we've offered that system now. We've got other companies now, payroll providers offer the same thing to other employees that they work with. So it's an easy way for people to get bitcoin. It gets deposited right into your bitcoin wallet. They don't have go to a website and buy it. Every two weeks when your paycheck comes, a portion of that goes into bitcoin.

Other great use cases are, let's suppose you have a multinational company that has contractors or consultants all over the world, in Asia and they're paying out in the U.S. says how do you pay them quickly and easily. We work with these large companies. They gave us a list of their employees' wallets, bitcoin wallets. We hit send every Friday at 3:00 p.m., let's say, and they all get paid out instantaneously all over the world at no fees essentially. Right now, they have the Western Union checks back and forth and that gets very expensive obviously.

Other use cases can be developers and payouts. So you've got this big developer networks all over the world. You know, people are doing web freelance – freelancers in web developing, things like that. How do you pay a web developer in Bangladesh that doesn't have a bank account per se? You can pay him in bitcoin now. So it's a great use case that happens very quickly and instantaneously.

The last slide I always like to talk about is our Compliance Team. Compliance is very important in a bitcoin. But not bitcoin payments in general, having been involved with one payments company before that that was not bitcoin related, it's the same compliance and the structure you need. And that's really where it's hard for startups to get involve in payments, it's because they have to build out a whole compliance program around this actually.

Our Chief Compliance Officer was the former Anti-Money Laundering Head at Visa for five years. Before that, he worked at the Federal Reserve for 15 years. We have another person on our team from the Federal Reserve. We also have Arthur Levitt. We have a former – our European Compliance (inaudible 0:24:52) was a former PriceWaterhouseCoopers attorney actually. So everything we do is all about compliance, rules and regulations.

So when we enter new countries, we work very closely with those regulators to make sure they understand how we work because obviously, you know, bitcoin has that perception. And then once they meet with our team and understand how we on board new merchants, how we follow KYC and AML policies, so for example, any new merchant or partner we signed up with has to go through a rigorous KYC and Anti-Money Laundering policy. We don't do any high-risk protocols even though a lot of those protocols are legal actually. We still don’t like to high-risk protocols. So we make sure that everything is formed through a compliance policies and work with the regulators to understand that.

We oftentimes get subpoenaed by the governments for, you know, slower merchant activity and we comply with the government to make sure all the information is, you know, given to them in a unique fashion time actually. So everything we do is very compliance-focused, rules and regulations for each country. We err on the side of caution. Being so high-profile in the bitcoin industry, our company with all the investors we have, we have to make sure that every I is dotted, every T is crossed per se.

With that, I'm happy to answer any questions. Thank you very much.