Some of the largest online retailers accept Bitcoin currency these days, including PC Game Supply, WordPress, Reddit and The Pirate Bay. Richard Branson announced a few days ago that Virgin Galactic, his commercial space flight venture, is going to accept bitcoins as well. You might want to join the trend because of Bitcoin’s popularity, the desire to increase your profits or wanting to support the Bitcoin economy. No matter what your motivation, this article will help you start accepting the cryptocurrency as one of the payment forms on your e-commerce site.
Weigh the Pros and Cons
Bitcoin is a decentralized, peer-to-peer virtual currency, which is not run by any single entity or attached to any fiat currency. Bitcoins are digital money you can receive and spend online or even in some brick-and-mortar stores, without involving any banks in the process or having to carry any physical money on you. The currency is stored in digital wallets located either on one’s computer, phone or the Web. Bitcoin uses cryptography to keep transactions secure, protecting the coins from counterfeiting or double spending. The virtual money is private, durable, easily transportable and flexible – each coin can be divided into millions of parts.
Besides all the benefits of accepting cryptocurrency, you might also want to consider the downsides before deciding to accept them in your online store. One of the major worries for online merchants is that Bitcoin’s price fluctuates widely, and the value might drop or increase drastically within hours – one of the factors that’s been preventing Bitcoin from becoming a mainstream currency. Just this morning Bitcoin’s value experienced a massive drop of more than $250 as China’s central bank told the country’s financial institutions to avoid dealing with Bitcoin. To get around this problem, you can use one of the available merchant solutions that, for a small transaction fee, will immediately convert the bitcoins for you and transfer them to your bank account. It means that you as a merchant can go on with your day-to-day operations without having to ever deal with bitcoins or worrying about the rate. These programs will do it for you.
Here are some steps you will need to take to be able to accept bitcoins and some e-commerce solutions that will help you do so.
Get a Digital Wallet
You can download the cryptocurrency’s official client to create your digital wallet on your own machine, or you can use flexcoin, Bitcoin’s online bank, to store your wallet on the Web. Other sites that let you get an online wallet are Coinbase, Blockchain.info, StrongCoin and MultiBit. Some wallets, like Bitcoinera.net, even let you invest in Bitcoin and promise 6% monthly interest.
If downloading the client to your machine, simply install it and the software will automatically create a wallet for you. Once the wallet is ready, you will receive your first Bitcoin address, which indicates that your wallet is ready for use.
Choose a Merchant Solution
To create a Bitcoin payment gateway, you can use a merchant solution or you can go with one of multiple shopping cart interfaces available for all mainstream e-commerce platforms. Some of the most popular merchant solutions include BitPay, Bitcoin PayFlow and Mt.Gox’s Payment Gateway. Shopping cart plugins are available for WordPress, Magento, OpenCart, PrestaShop, osCommerce, Zen Cart and others. If you aren’t expecting a very large volume of sales in bitcoins, you can also simply provide each individual buyer with a new wallet address and wait for payments to come in, just like you’d wait to receive a check via mail, but faster. The downside of this process is that you have to do it manually, but the upside is that you don’t need to install any additional software. All you have to do is put a sign on your site indicating that you accept Bitcoin. If you do end up going with a merchant solution to automate your sales, here’s an overview of the most popular ones.
BitPay uses JSON API to provide an easy-to-use, versatile payment gateway for any e-commerce store. It lets users display payment instructions on their sites, request payment in more than 150 currencies and take advantage of the next-day bank transfer in 32 countries. You get several payment methods to choose from with BitPay. These include a click-to-pay URL, scan-to-pay QR code or copy-and-paste payment instructions. The free version involves a 1% transaction fee, while the premium options charge an all-inclusive monthly price and have no additional costs after that. The cheapest Professional package runs at $30 a month and comes with 20 shopping cart plugins, retail POS tools, email support and daily bank deposits.
Bitcoin PayFlow is a free, open-source API that lets you accept bitcoins and fully track all processed payments. Orders created through Bitcoin PayFlow specify the paying party, the recipient and the amount paid. The API limits users to 100 orders per day and, unlike BitPay, doesn’t do currency conversion or bank transfers.
Payment Gateway by Mt.Gox
Also using the JSON-based API, Mt.Gox has designed its Payment Gateway for easy integration into e-commerce sites. You can display payment details on the customizable payment page, and accept split and partial payments, among other perks of this API. The payment goes through immediately if the customer uses his or her Mt.Gox account at checkout.
Payment Gateway is open-source and transactions are free. Bitcoin’s real-time price is displayed relative to the product’s price in local currency. Mt.Gox Mobile QR scanner is also available if you want to supplement your online Bitcoin sales with mobile payments in person. The API has a couple of other attractive features, like the payment button generator, which doesn’t require any coding skills to utilize.
Other shopping cart interfaces you might want to check out are Coinbase, BIPS, BitMerch and Coinkite. If nothing else, accepting Bitcoin can help your small e-commerce business get noticed by multiple fans of this cryptocurrency. It will cost very little or nothing at all for you to add a Bitcoin payment gateway to your online store, and even just putting the currency’s sign on your site will attract attention, boost your business’s image as an early adopter and give you some easy PR.
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