here are numerous ways that incorporating a Bitcoin payment strategy into your business can pay off. Online retailers like Overstock and TigerDirect are already reaping the benefits. 

For one thing, simply letting customers know that your business accepts Bitcoin is enough to generate media attention and free publicity. You are also more likely to get more business and loyalty from Bitcoin users to want to support businesses that accept the popular cryptocurrency. 

More importantly, Bitcoin is easy to use and facilitates speedier transactions and lower costs than credit cards. 

Bitcoin payments are also much less susceptible to fraud than credit cards due to the nature of blockchain technology and the level of identity-theft protection. Transactions and payments received in Bitcoin are verified and never disputed. 

It is also easier to facilitate international transactions with Bitcoin. Typical foreign exchange fees will usually be too expensive for small businesses to be worth it, but Bitcoin makes cross-border transfers much cheaper. In turn this allows those same businesses to reach an international market. 

Lastly, credit cards and other conventional banking transactions are subject to returns and charge-backs. Bitcoin payments are irreversible, so businesses making transactions with the cryptocurrency do not have to deal with this. 

How to accept Bitcoin

There are many methods and services at your disposal to start accepting bitcoin for your business. The following lists are just some of the available ways that will show you how to accept Bitcoin, whether you are a physical retailer or an online store or service provider. 

OFFLINE/PHYSICAL BUSINESS

• Wallet Addresses: A bitcoin wallet is the simplest method of accepting Bitcoin for small businesses, or if you expect a low volume of Bitcoin users, as it allows customers to transfer BTC directly to you. Numerous Bitcoin exchanges offer wallet services, and there are dedicated wallet platforms as well. In either case, once you register with the service or platform, you will receive your wallet address, which can be thought of as a string of random characters and acts as your public key. You will also receive a private key used for signing transactions, and should be kept secret. Displaying your wallet address as a QR code will let your customers scan it in order to start the transaction. Finally, linking your bank account or credit card to your Bitcoin wallet will allow you to withdraw the funds into fiat currency. 

• Some examples of Bitcoin exchanges with wallet services include Bitfinex, Kraken, and Coinbase; but if you’re looking for dedicated wallet platforms, websites like Eidoo, Blockchain.com, and BTC.com are the way to go. 

• Mobile apps: To further streamline the process of accepting Bitcoin transactions for businesses, there are also various touchscreen apps published by developers. The concept is very similar to the direct method of posting a wallet address mentioned above, but in this situation, the wallet address is connected with the app. The vendor is able to input the transaction price in fiat currency, and the app then generates a QR code that the customer would scan with their mobile wallet app. The advantage is that these app can run on mobile devices and tablets. 

• CoinFly, CoinGate, and BitPay are some common examples of Bitcoin payment processors used by businesses to accept Bitcoin transactions

• Hardware terminals (POS): As Bitcoin gains traction as a viable method of payment and commerce, organizations have started to develop point-of-sale hardware solutions to match current solutions for fiat currency. Some come in the form of dedicated payment terminals for Bitcoin, while other solutions are APIs that can be built into existing POS terminals. 

• Coinkite is an example of a Bitcoin payment terminal similar to chip-and-PIN terminals. The company also issues its own Bitcoin-based debit cards that can be scanned by the terminals. These terminals can also operate as a Bitcoin ATM and generate scannable QR codes. 
• BitPay is a global Bitcoin payment processor, which has been streamlined into the SoftTouch POS system. With a bit of programming, developers can integrate the API with almost any POS system available.  

 ONLINE BUSINESS/ E-COMMERCE

• Button: The method of providing a QR code for your Bitcoin wallet mentioned above is applicable for online businesses as well, but including “pay with Bitcoin” buton on your website provides a more streamlined service. It’s possible create one yourself with enough HTML and programming knowledge, but numerous solutions are able to generate for you based on your specifications, such as BitcoinPay and Coinbase. 
• Invoices: Online businesses that accept payments via invoices have a few considerations to be aware of. The price of Bitcoin is prone to constant fluctuations, so it’s recommended to include a suggested Bitcoin price or instructions for conversion from the price in fiat currency. This way, significant losses on either the merchant’s side or the customer’s side can be avoided. Additionally, the invoice should include your wallet address, preferably in the form of a QR code. 

Bookkeeping and taxes 

The understanding of Bitcoin bookkeeping and taxes can differ based on the jurisdiction and country you live in. For example, the Internal Revenue Service in the US taxes Bitcoin and other cryptocurrency as property rather than currency. 

The complications that this ruling introduces arises when exchanging Bitcoin. When the merchant acquires a property, the fair market value of the property must be recorded. If the fair market value has increased at a later date when it is sold, IRS Bitcoin guidelines dictate that gain in value is taxed.

Due to the fluctuating nature of Bitcoin, every single one of your transactions may theoretically have different taxable gains when you exchange them for fiat currency. To mitigate these complications, many Bitcoin payment processors and service providers offer an instant exchange service.

Essentially, this means that Bitcoin payments you receive are instantly exchanged into a currency of your choice. Of course, it is advisable to get a tax specialist to help navigate the specific the taxation laws and other details that may be unique to your jurisdiction.

Some accountancy firms that even specialize in Bitcoin such as Bitcountantand are emerging as well. 

What to watch out for 

While accepting Bitcoin payments does not carry the typical risks of credit cards or other payment processors, there are some things that you should watch out for in order to avoid fraud. The possibility of people attempting to scam your customers by sending them counterfeit invoices does exist.

It involves them finding out your customers’ identities and delivering invoices to accept a payment to a Bitcoin address that they control, rather than yours. Your business can reduce the risk of this happening by forcing people to get the full Bitcoin address from your website via secure SSL. 

It is also a good idea to print most of the address on the payment stub (perhaps with four or five characters starred out), so that there is a paper trail to settle any potential disputes. 

Automated solutions such as FraudLabs Pro can screen Bitcoin transactions to determine risk level, and businesses can also understand the proximity of their users by using IP address geolocation. 

Pros and Cons

There are significant benefits to incorporating a Bitcoin payment processor into your business. While the infrastructure to accept credit and debit card payments means that businesses have to pay a two to five percent fee on each transaction, Bitcoin’s lack of any central intermediary drastically reduces the fees that merchants have to pay. 

Another big problem of any money transfer system, including standard bank cards, is ‘double-spending.’ Oftentimes, a fraudster is able to spend an amount of money again by calling to reverse a transaction.

Thanks to blockchain technology, Bitcoin offers protection from such fraudulent schemes. Once the transaction is confirmed, it is recorded in the public ledger and after that it becomes irreversible and unchangeable. In this respect, accepting Bitcoin is pretty much like accepting cash.

The volatility of Bitcoin is probably the biggest disadvantage of using Bitcoin in business transactions. If you are not constantly adjusting your prices to reflect the fluctuating value of the cryptocurrency, you may suffer losses.

However, the many Bitcoin exchanges offer instant exchange services, meaning Bitcoin payments are immediately exchanged into the fiat currency of your choice. Along with that, the regulatory grey area of Bitcoin worldwide presents unique challenges.

As cryptocurrency becomes more mainstream and policies are updated to adapt to it, businesses may struggle to keep up with ever-changing legislation.