When it comes to accepting bitcoin as a business, you need to complete a bitcoin merchant integration so that you have a defined process in place. Generally speaking you can accept bitcoin payments manually or automatically. The first thing you need to do as a business is connect to a bitcoin client that will allow you to easily carry out transactions.
Manual Bitcoin Payments
For manual bitcoin transactions, it’s a simple case of sending the client or customer your bitcoin address that they must transfer bitcoin into.
Note: This option is usually available under a tab or button that says anything along the lines of “Send” or “New”. If there is any doubt contact the administrator for your chosen bitcoin client.
Once you have received confirmed payment for the products or services, you can release them to the customer.
Refunds can be dealt with in the same manner. Simply obtain the bitcoin address that the customer wants to use for the refund, and send the funds back to them.
The advantage of this manual system for bitcoin payments is that it is relatively simple to implement and introduce to your business. If you’re starting out with bitcoin payment methods, this could be a good testing area for your business.
Automatic Bitcoin Payments
If you’re going to accept bitcoin for your business and be dealing with a lot of transactions, it’s best to automate the process as much as possible. Connecting a bitcoin payment API to your business or checkout page is probably going to save you the most time and effort and it will also help keep everything consolidated for you, but you can also do this part yourself.
Setting Up Automated Bitcoin Payments Yourself
If you want to manage it internally, simply create a pre-generated list of bitcoin addresses that can be tied to all the individual payments that you will be receiving, much as you would do with manual payments. These can be stored on your web server and can be matched to transactions as they happen.
- Pre-generate your list of bitcoin addresses using a utility such as Pywallet, BitAddress or WarpWallet
- These will be generated with private keys – the private keys must be kept separate from the addresses
- Your developer will need to help you upload the addresses to be stored on your web server
- Your developer will also need to help you write a piece of code that attaches an address to each payment requested to be made in bitcoin
- Once the payment comes into the wallet and has been confirmed, goods can be released
Setting Up Automated Bitcoin Payments Using An API
First, select a payment processor that will manage your bitcoin payments for you. We’ve included a short list of some below. Using a service that is integrated with your payment processing will usually carry out a transaction as follows:
- Customer requests to purchase said item
- If online, customer will add the item to his or her shopping cart
- The customer will select a payment method and opt for bitcoin in this case
- An invoice is generated with a unique bitcoin address on it
- Payment is made into the account and the system confirms the amount is correct as per the invoice
- Once payment is confirmed the products can be released
- The funds are then released into your account of choice
- Most APIs can also handle refunds for you, which will remove the associated hassle
Bitcoin Merchant Integration Services (APIs)
There are so many bitcoin payment merchant integration services available now and you’d probably be inundated with options when doing a Google search for one. We’ve nailed down the list a little. These are some of the more reputable bitcoin payment APIs that allow you to accept bitcoin payments:
- Mycelium Gear
Most of these will offer multiple ways of paying by bitcoin, such as:
- Click to pay bitcoin payment
- Scan to pay bitcoin payments (with QR code)
- Copy and paste payment methods for bitcoin
NB: Make Use Of Single Use Bitcoin Addresses
While it may sound obvious, there have been instances where businesses have used a single bitcoin address for all their business transactions. If you’re only selling a few items to select customers through this means, then it’s not so much of an issue. The problem comes in when you have two customers who have bought something for the same value at a similar time. Using a service such as Block Explorer, which details all bitcoin transactions, blocks and addresses, anyone can track and trace payments made to the singular address and perhaps even claim someone else’s payment as their own.
Moral of the story: give each customer a unique bitcoin address to pay into.