Whether you own an online store, a business that sells services online or you’re a service or product based brick and mortar business, you can accept bitcoin as a payment method for your business. Many businesses and places that accept bitcoin exist, and more are being added daily.
Since bitcoin is a relatively new currency on the market, it is easier to get your head around adding it as a payment method if you consider it in the same way you would consider cash. If you were to accept a cash payment for designing a website, there would be less of a paper trail (maybe none) represented electronically. You would then go and create an invoice and payment requisition and then perhaps either deposit the cash into your account or use the cash elsewhere. The same applies to bitcoin.
1. The first step in accepting bitcoin as a payment method is bitcoin merchant integration
2. Next is to advertise the fact that you accept bitcoin
3. Ensure that your business is equipped to deal with the transactions in the back end from a reconciliation point of view
4. Speak to your accounts department or accountant on how best to deal with the transactions from a taxation point of view
Read more on all of this below.
Bitcoin Payment Method For Online Business
Many online stores are already integrating bitcoin payment methods into their systems. Shopify stores now come with a built-in feature that makes it simple to add a bitcoin payment gateway to their checkout pages. Other businesses can add the option just as easily.
The best and easiest way to do this would be to integrate a bitcoin payment API that has been built specifically to deal with these kinds of transactions. This would be linked to your bitcoin wallet and make it possible for transactions to take place effortlessly. What happens with bitcoin payment APIs is usually the following:
- Customer makes a purchase and a bitcoin invoice is generated on the checkout page on your website
- A unique bitcoin address is used on each invoice
- The customer makes the payment in bitcoin
- The invoice is updated immediately with the payment reflecting
- The payment is deposited into the linked bitcoin wallet
Generally speaking, most bitcoin payment APIs support payment by way of:
- Click to pay bitcoin payment
- Scan to pay bitcoin payments (with QR code)
- Copy and paste payment methods for bitcoin
Alternatively, businesses can forego the bitcoin payment API by creating a list of bitcoin addresses that can be stored in the online store’s database. Whenever a customer makes a purchase, an invoice can be generated with a unique bitcoin address. This would also then need to be linked to a bitcoin wallet. Unique addresses must be created for each transaction to prevent any fraudulent activity from taking place. This also makes it easier for the business to match up transactions to addresses, as hopefully they will start coming through in droves.
Bitcoin Payment Method For Land-based Business
It’s less “popular” (for lack of a better word) for bitcoin to be added as a payment method for brick and mortar stores and businesses, but more businesses are slowly being added to the fold.
Scan to pay bitcoin payment options are the easiest way to navigate for brick and mortar businesses. By having a touchscreen device at till points that enable QR codes to be generated, you can match payment amounts to QR codes and have customers pay in bitcoin by scanning the code. This would then be linked to a bitcoin wallet and would be traceable via the code.
Alternatively, customers could pay in advance for products or services online in the same way that the API would manage these transactions. The goods or services would then only be supplied once proof of payment has been received.
Paying Taxes On Bitcoin
This is a question on many lips and it leads back to the second paragraph on this page. The tax implications will be different for every country, so it’s difficult to sum up the requirements.
By treating bitcoin in the same way that you would treat cash transactions, you can easily work out how to treat bitcoin as taxable income. This is where your accounts department or accountant needs to get involved so as to advise on the best route forward. You would also need to ensure that your books are set up to manage the income.