What does a Bitcoin payment provider do?

This post is also available in: German

What is a Bitcoin payment provider?

When a merchant decides to accept Bitcoin and crypto currencies in his shop, he wants to attract new customers.

As a dealer, you want to take care of your own core competence. This is due to the sale of goods and services via the Internet. The core competence of a payment provider lies in the payment processing between the customer and the merchant.

Abandonment of a Bitcoin payment provider

For technical payment processing, the Bitcoin payment method is integrated into the payment method selection page.

The Bitcoin payment provider receives the purchase amount in Euros from the shop software and asks for the current exchange rate between Euro and Bitcoin at a Bitcoin exchange.

At the same time, a new Bitcoin address is generated, which is used exclusively for this order. Together with the determined Bitcoin amount, this address, in the form of a QR code, is presented to the buyer on the website of the shop.

The page displayed with the QR code is called a payment page or checkout page. This payment page can be held in the design of the Bitcoin payment provider, as well as in the design of the shop.

The payment page usually also displays an expiring clock indicating how long this transaction is valid. This takes into account the volatility of the Bitcoin price. As a rule, the validity is limited to 15 minutes. Within this period, the conversion rate is guaranteed to the customer. After this time, the exchange rate is recalculated.

To determine whether the customer has made the payment, the Bitcoin payment provider monitors the mempool or Blockchain.

If the transaction is detected in the mempool, the display of the payment page changes and the buyer is notified that the payment is on its way:

Bitcoin Payment Provider
Confirmation of successful payment by the Bitcoin payment provider

The Bitcoin payment provider takes over the assignment of the payment receipt with the order in the online shop. After successful payment, the feedback is sent to the shop or to the ERP system in order to provide the delivery of the goods or the services.

Technical integration and shop modules

The technical integration of the payment method Bitcoin and other crypto currencies is just as easy as the integration of other payment methods.

Bitcoin payment providers provide appropriate API interfaces and shop modules for the most common shop software solutions.

Those who have already technically integrated payment systems into their online shop will have no problems whatsoever with the integration of Bitcoin.

Accounting and Volatility

The high volatility of the Bitcoin price and how to integrate Bitcoin into your accounting will act as a deterrent for some traders at the beginning.

However, this problem is solved by numerous Bitcoin payment providers in the form of a settlement and payment guarantee in euros.

If the product purchased in a shop costs €50,- for the end customer, the shop operator receives this amount, after deduction of a service fee, paid out in Euros.

Due to the payment guarantee, any price changes are borne by the Bitcoin payment provider.

As with billing for credit card and PayPal, the merchant receives a settlement of the Bitcoin payment provider via the Bitcoin sales including withdrawal to the bank account. Thus, accounting for the transactions made is not a problem and there is no risk of volatility.

Accept additional cryptocurrencies

Bitcoin is the largest, best known and most widely used crypto currency. If you have decided to accept crypto-currencies in your shop, there is no getting around Bitcoin.

But there are numerous other crypto currencies, which are also specialized in payment processing.

The most important coins can be named: Bitcoin, Bitcoin Cash, Dash, Litecoin, Lightning and Ethereum. The individual differences are mainly of a technical nature and have individual advantages and disadvantages for individual business models.

In the post “Which Cryptocurrency Accept” you will learn what you need to pay attention to when selecting cryptocurrencies for your business model.

In the article “Cryptocurrency as a Means of Payment” the individual cryptocurrencies are presented in more detail and the special features for payment are looked at more closely.

At this point it can be said that it can be an advantage for a merchant to offer a few more crypto currencies for its customers in addition to Bitcoin. However, the selection should also not be too extensive so as not to confuse customers.

If you offer a special product that is specifically aimed at a target group with an affinity for technology, you can offer a wider selection. If the products are primarily aimed at the mass market, a reduced and simplified selection is recommended.


Bitcoin payment providers typically charge two types of fees. The one fee is for the provision of technical payment processing and is between 0.5 and 1 of the sales volume (clearing volume).

A second fee is a settlement fee. The payout fee consists of the fee for the payout method and the conversion fee.

The merchant’s balance with the Bitcoin payment provider is held in the respective cryptocurrency. You can withdraw this balance as a cryptocurrency or in euros (fiat currency) to your own bank account.

A conversion fee is then charged for the conversion of the crypto credit into euros.

Depending on the desired withdrawal method, different fees may also be charged. Bitcoin and bank transfer are usually offered as a withdrawal method. However, some Bitcoin payment providers also offer withdrawals to a PayPal account or debit card.

The conversion fee and the fee for the withdrawal method are usually referred to together as the withdrawal fee.

The payout fee in crypto currencies is free with all providers. A fee of 1% to 2% is charged for withdrawals to a bank account. Payouts to PayPal or to a debit card are slightly higher.

Legitimacy check

To accept payments in his shop, the merchant must provide documentation about his company. This so-called legitimacy check and KYC check includes not only the business documents but also the examination of the business model. A procedure that every merchant already knows from the acceptance procedure for credit cards or PayPal.

The same verification requirements are also made by bitcoin payment providers to the merchants. If a merchant wishes to receive a payment in Fiat to his bank account, this check is required by law.

In the past, the check was limited to merchant who wanted a payout in fiat currencies and was waived for payouts in crypto currencies.

In the meantime, it has become clear that an audit is being carried out on all merchants. Only BTCPay Server does not require a check.

All other payment providers carry out the checks, whereby the scope of the submitted documents is linked to turnover and payout limits.

Provider comparison

Before you go in search of the right Bitcoin payment provider, you as a trader should think about the requirements a few.

What requirements should the Bitcoin payment provider meet?

  • Which cryptocurrencies do I want to accept?
  • Is there a shop module for my online shop?
  • Do I want a payout in Bitcoin or in Euro to my bank account?
  • What are the costs for me as a merchant?

There are now a variety of Bitcoin payment providers that support the payment processing of cryptocurrencies. There are global vendors and niche vendors that have focused on specialized applications.

The main Bitcoin payment providers for European traders are briefly presented in the following list.


Bitpay is one of the largest and best known Bitcoin payment providers and is used by most merchants worldwide. Bitpay supports the cryptocurrencies Bitcoin and Bitcoin Cash and pays out the sales in either Bitcoin or Euros.

The fees at Bitpay are 1% of the turnover and no further fee is charged for the payout.

BitPay only accepts payments that support the BIP70 protocol. Since not all Bitcoin wallets support this protocol, there are payment interruptions for payers using these wallets.

BitPay has also announced that it will withdraw from the German market from 2020. From this point on, no merchant from Germany will be accepted. This is justified by the unclear legal situation in Germany regarding the custody of Bitcoin for its merchants.

Merchants who have already used BitPay as a payment provider can easily switch to the BTCPay Server solution (see below) as it is based on the same technical API interface.


Coinpayments is the provider with the most extensive selection of accepted crypto currencies. If you want to offer your customers an almost complete selection of all available crypto currencies, you will find it at Coinpayments.

The payment is also made exclusively in crypto currencies. A payment to a bank account in Euros is not possible.

You can have incoming payments from different currencies converted to Bitcoin, for example, and then have your sales paid out in Bitcoin.


Coingate also convinces with an extensive selection of over 50 different crypto currencies. All crypto currencies relevant for payment processing are supported. It is particularly noteworthy that Coingate Lightning supports payments.


OpenNode specialises in payment processing for Bitcoin and Lightning payments. Especially in the area of Lightning Payments OpenNode has gained a good reputation and convinces with industry-specific solutions.

BTCPay Server / Coincharge

With the BTCPay server you are your own payment provider. It is a free open source software that you can install and use on your own server. Accordingly, a legitimation check is not required and no fees are incurred.

The BTCPay server supports the payment methods Bitcoin and Lightning. Additional payment methods can be added as an option.

Coincharge realises its projects based on the open source technology of the BTCPay server. A short summary, which applications can be implemented with the help of the BTCPay Server and how you can receive the payout amount in Euro if required, can be found in the article: Bitcoin Payment Provider vs. BTCPay Server


For a complete list and a detailed description of other Bitcoin payment providers, see Coinpages Payment Provider

In summary, a Bitcoin payment provider provides the following services to a merchant:

  • technical interface and shop modules
  • technical processing of Bitcoin payment
  • automatic conversion of the euro price into the respective Bitcoin price based on the current Bitcoin price
  • Bitcoin payment sites for customer-friendly payment processing
  • the payment page incl. an individual Bitcoin address per payment process and in QR format
  • Monitoring the receipt of Bitcoin at the Bitcoin transaction address
  • Settlement and payment to the merchant’s bank account in his desired currency e.g. Euro, CHF, USD or bitcoin

This post is also available in: German

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