Bitcoin helps overcome old e-commerce hurdles. Where payment methods in their traditional forms,
such as credit card or payment platforms such as PayPal or even banknotes directly,
require third-party companies to transfer payments between two parties.
Payments are taken from the buyer’s account and processed through the intermediary platform,
It is a process that requires merchants to pay a financial fee in order to complete the transaction.
In addition, local regulations and legislation may cause obstacles for e-commerce companies to overcome in receiving and processing payments,
especially when dealing with currencies.
Consequently, Bitcoin becomes an attractive option for merchants to receive payments in their e-commerce projects.
As Bitcoin allows parties (seller and buyer) to deal directly with each other without the need for an intermediary.
Whereas, the power of cross-border blockchain eliminates the middleman’s role and solves the problem of making the traditional payment processing system.
Not only that, but also exchange rate fees for purchases made across borders.
This reduces problems related to local regulations and legislation.
And with the increase in talk about Bitcoin recently, and the rise in its value,
As an e-commerce entrepreneur, you must have wondered about ways to earn bitcoin and receive payments with it on your trading platform.
Therefore, in this article, we try to answer the following questions about:
What are Bitcoin and digital currencies? What are the advantages of paying with Bitcoin wallets?
How to start receiving Bitcoin payments? What is the future of Bitcoin?
What are Cryptocurrencies?
It may be helpful to start with a simple definition of digital currency.
It is a digital currency that is not controlled by any bank or government but which uses Block chain encryption technologies to regulate its use.
Every transaction is verified by users on the network,
and generally these transactions become a public record to prevent the currency from being spent multiple times by the same user.
What are the expected advantages of bitcoin payments?
Bitcoin has many benefits for e-commerce entrepreneurs, and those benefits are as follows: –
1- A wider market
Accepting cryptocurrency as a payment method allows you to gain access
to an entirely new market of tech-savvy consumers who are becoming a community within the cryptocurrency market.
Just as it previously allowed the option to pay through a digital wallet
or credit cards to plunge into wider markets and attract consumers from all over the world.
This is in addition to the increasing number of Bitcoin users around the world,
and the diversity of their age groups.
2- Faster Transactions
Unlike credit card systems that take a few days to process,
The digital currency is processed instantly, giving you instant access to the funds.
Fast transactions can help simplify your company’s cash flow.
3- zero or Low fees
Another benefit of offering digital currency as a payment method is,
These are the low fees associated with each transaction.
Fees can range depending on whether you receive digital currency
payments in your personal wallet or through a third-party provider like Coinbase.
However, you will find it much lower than the fees for services like PayPal or credit card providers.
4- Safer and more secured
After completing the transaction using the digital currency,
It becomes difficult to retract it unless you get the dealer’s approval.
This provides e-commerce sites with extra security when it comes to fraud.
Since no broker, like a bank, is able to withdraw money from your account without your consent.
Integrating bitcoin payment mechanism into your e-commerce website
Now that you know more about Bitcoin, and the advantages of receiving payments with it,
we will try to explain here how to install that payment method on your site.
Check out your online store
You can get started quickly with Bitcoin if you already have an e-commerce site.
This is done through two methods: –
The first: Payments through a personal wallet: to accept payments directly to the seller’s personal digital wallet.
This digital wallet can be downloaded and stored on a computer or your smartphone.
The second: by integrating your store with a Bitcoin payment processor,
as most e-commerce platforms already have these additions done,
This makes Bitcoin payments much easier to process.
Examples of platforms that you can integrate your site with to receive bitcoin and digital currencies are: Coinbase, Dwolla, BitPay, GoCoin.
Evaluate your options
Your next step is to evaluate Bitcoin and cryptocurrency payment processors, and here are the most important points you should keep in mind: –
1- Transaction fees
As mentioned before, one of the advantages of receiving payments in digital currencies is
the abandonment of the high-cost fees imposed by the middleman or the second party between the seller and the buyer.
So you have to ask about the fees that Bitcoin payment processors charge. In most circumstances it is always less than 1%.
2- Repeat payment
Some providers promise to start paying daily, while others may take up to 3 days.
If the rate of payment is important to you (for example, if you must pay a fee related to purchases
that may accrue quickly on busy days),
Make it a point to discuss the matter with your payment processing service provider.
3- Currencies
Make sure your bitcoin payment processor supports the payment currency you prefer.
Most processors enable merchants to withdraw bitcoin payments in US dollars and British pounds.
But if you want to withdraw your money in a different currency, make sure the provider supports it.
4- Geographical scope
Some bitcoin payment processors cannot serve companies from certain countries, so make sure that your provider supports the country in which you do business.
5- Customer Technical Support
If you have a lot of questions or feel you will need help setting up your Bitcoin payments,
Research customer support offers for your payment processor.
Do they offer phone support or is everything done via email? Do they offer chat support services?
More options
Incorporating a bitcoin payment provider is the simplest way to accept bitcoin on your e-commerce site.
If direct merging is not possible, you can explore other options such as: –
1- Pay buttons
Some Bitcoin payment processors allow you to add a payment button to your e-commerce site.
Coinbase, for example, has a button generator that lets you do this easily.
You can also use the Coinbase API to create your own Bitcoin Buttons.
2- custom integration
Speaking of API,
If you know a web developer and can’t find a Bitcoin processor that integrates directly with your e-commerce site,
You can follow the custom integration path. Many providers have an API that enables you to do this.
3- Invoices
Another option is to use invoices instead of shopping carts on your online store.
The invoice generation process will depend on your Bitcoin payment service provider.
For GoCoin, you can take advantage of its billing API;
On the one hand, Coinbase has an invoicing tool.
4- Alternative solutions
If you can’t make Bitcoin payment work using integrations, buttons, or invoices,
You may choose to find an alternative solution instead.
This may entail requiring the customer to contact you directly to purchase bitcoin.
Securitizing your transactions
Once you have decided on a bitcoin payment processor and set up your system,
you will need to ensure that all transactions on your site are secure, by:
1- Stay informed of updates
Do not neglect software updates. Make sure you always use the latest version of
the bitcoin wallets or apps you have so that you can stay up-to-date on security policy fixes.
2- Use a strong password
Protect your wallet with a strong, hard-to-guess password that contains a mixture of uppercase and lowercase letters, numbers and special characters.
If your solution provides multi-factor verification (such as email verification, or secret questions)
then you should take advantage of this security feature.
3- Bitcoin wallet backups
Backups can help protect your money in the event of a security breach (for example: if someone breaks into your system or if your device is stolen).
For the best protection, Bitcoin.org recommends the following backup methods:
Back up your entire wallet: Some wallets use multiple private keys that are hidden internally.
If you only have a backup of the private keys for your visible Bitcoin addresses,
you may not be able to recover a large portion of your funds with your backup.
Encrypted Online Backups: Any backup stored online is highly vulnerable to theft.
Therefore, encrypting any backup copy is a good security practice.
Use multiple safe sites: If your backup does not depend on a single location,
it is unlikely that any bad event will prevent you from restoring your wallet.
4- Cold storage
Cold storage is the practice of keeping a Bitcoin wallet offline. Doing so is protecting your money in the event of a digital hack.
5- Do not keep large amounts of Bitcoin in your wallet for a long time:
Remember that thieves cannot steal something that does not exist.
Make sure to transfer your funds frequently without an internet connection
or convert them into your local currency so that you can keep it in your (insured) bank account.
If you need Bitcoin to run your business, keep only what you need at any time.
Be clear about your bitcoin refund policies
Bitcoin is still quite new and innovative, so you are sure to encounter questions and concerns from your customers.
So save time and address concerns straight from the start by clarifying your Bitcoin payment policies on your e-commerce site.
Of course, you will set your policies according to the nature of your business, but there are some factors that you should consider: –
1- Bitcoin payment procedures:
Explain how bitcoin payments work on your site.
What steps should customers take if they want to pay with Bitcoin? What data will they need to provide?
Arrange the process as clearly as possible to reduce questions.
For example, Overstock.com offers a great page explaining how their customers can use Bitcoin on their site.
It has a step-by-step step-by-step guide and also has videos with information to help customers understand how to pay.
2- Amounts and exchange and refund policies
Will you allow customers to exchange or return orders that were purchased with Bitcoin?
What if someone asks for their money back? How will customers communicate with you?
Do not forget that Bitcoin transactions are irreversible, which means that unhappy customers cannot initiate refunds.
Think about how these things are handled. Whether you decide to issue the refunds in the form of bitcoin,
local currency, or a balance that is transferred to the credit card.
You should define these steps as clearly as possible.
A quick overview of existing bitcoin payment experiences
In order to get a clearer picture of how Bitcoin payments are received on e-commerce sites, we need to take a quick look at these sites: –
Overstock.com
Overstock.com is one of the largest online sites that currently accept Bitcoin payments.
The site offers a wide range of products; From apparel and accessories to household goods at cheap or discount prices.
eGifter
EGifter.com, a website that sells premium branded gift cards,
accepts Bitcoin payments. On the checkout page, customers will see a Bitcoin Pay button that indicates the payment option.
The future of bitcoin
There is no way to be certain about Bitcoin’s future, but many experts are optimistic about it.
Supporters of Bitcoin and other cryptocurrencies claim that these wallets are inherently unreliable,
meaning that they are not directly linked to any country, government, or organization.
They might argue that cryptocurrency is superior to traditional physical currencies because it does not depend,
for example, on governments or central banks.
For many years, digital currencies have been a minor topic of interest to no one.
And it appears that there is a bet on replacing credit card payments with digital currencies.
As the new situation resulting from the COVID-19 spread may
lead to the use of digital currencies in the medium term or their permanent use forever.
Meanwhile, e-commerce website owners should closely monitor news about Bitcoin
and cryptocurrencies in order to learn how to easily apply them should they become popular.
Some banks and countries like China have even started developing
their own digital currencies, which could pave the way for the rest of the world.
All in all, whatever your opinions about Bitcoin, no one can deny its influence on e-commerce.
Whether or not you decide to accept bitcoin in your business, you should at least keep yourself informed about cryptocurrencies.
Now that you have this knowledge, go ahead and start promoting your store!
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