The popularity of cryptocurrency in recent years has caused major brands to consider accepting Bitcoin and other coins for products and services. AT&T and Microsoft both offer ways for customers to pay using cryptocurrencies. The Dallas Mavericks NBA team also lets customers pay for game tickets using Bitcoin.
For today’s customers, digital payments are king. A 2023 survey found that 73% of respondents prefer to shop and pay with digital methods. Expanding your payment options to include cryptocurrency can help meet the demand for fast, flexible, and convenient ways to pay. Here’s how to expand your POS capabilities to begin accepting cryptocurrencies.
[Read more: Considering Accepting Cryptocurrency? What to Consider]
Get familiar with cryptocurrency regulations
There are many competing, vague cryptocurrency regulations that also apply at the state and local levels. “To accept crypto payments, you must have your own crypto account, which, by default, makes you an investor. This means you are expected to comply with the cryptocurrency regulations for your state,” explained FitSmallBusiness.
Bloomberg Law has a breakdown of cryptocurrency regulations by state to help you get started. It’s also prudent to learn about any restrictions or regulations included in your cryptocurrency platform policy. “Not all cryptocurrency platforms are legal in the US, even if users can convert (or withdraw) their savings in US dollars. CoinGate, for example, is only legal to use in some states,” wrote FitSmallBusiness.
Set up a crypto gateway
A cryptocurrency payment gateway gives your business a way to accept digital payments and receive fiat currency immediately. These gateways are similar to payment processor gateways for credit and debit cards. Alternatively, you could also set up a crypto wallet to receive payment in the form of cryptocurrency and keep it in that form (rather than convert it to dollars). Some tools offer both gateways and wallets so you can decide later which works best for your business.
You’ll want to make sure your Bitcoin payments are being recorded in the same platform where you account for the rest of your business transactions.
Leeron Hoory, Forbes
Here’s how the payment process works with a crypto payment gateway, according to Investopedia.
- When a transaction happens in-store, on the web, or via app, your customer is given the opportunity to make payment in cryptocurrency at checkout.
- The customer pays the amount equal to the digital currency's fair market value at the time of the transaction.
- The cryptocurrency payment service instantly converts the payment into the currency you choose (e.g., dollars, euros, etc.).
- The money is added to your account with the provider; it is deposited to your designated bank account in intervals decided on in your service contract.
There will be service fees applied to this process, which vary depending on the provider.
[Read more: How to Accept Bitcoin Payments]
Integrate crypto payments into your checkout processes
Once you have the gateway properly set up, you need to let customers know about this new way to pay. This process can take some time, depending on the POS, e-commerce platform, and other shopping channels you use. For example, PayPal has crypto built into its checkout solution, WordPress and BigCommerce both require integrations, and Shopify has an easy plugin to help you get started.
To accept in-person crypto payments, you may need a crypto-compatible QR code scanner or NFC terminal. If you use a mobile device to accept payments, there are apps that can help with this, such as the Bitcoin QR Scanner.
Add crypto payments to your accounting
Finally, make sure you’re documenting payments you accept in cryptocurrency. You must report your cryptocurrency to the IRS using Form 1040 Schedule D. Setting up your accounting software to record these payments can make tax season less stressful.
“You’ll want to make sure your Bitcoin payments are being recorded in the same platform where you account for the rest of your business transactions. This can easily be set up by integrating Bitcoin transactions with your current accounting software,” wrote Forbes.
Consult with an expert to make sure you’re recording these transactions properly, as regulations change frequently and could negatively impact your business.
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