Why you should accept Bitcoin as a merchant

This post is also available in: German

Why should merchant accept Bitcoin?

What are the advantages of accepting Bitcoin as a merchant? This post explains the benefits Bitcoin can offer and how you can use Bitcoin for your own internet shop.

The main reason why shop operators offer Bitcoin in their own shop is the personal interest in the topic. Because the easiest way to get Bitcoin is to offer goods and services against Bitcoin.

Already the Bitcoin expert Andreas Antonopoulos recommends that one should not buy Bitcoin, but earn:

“Don’t buy Bitcoin – Earn it”


As a Bitcoin enthusiast, you may have simply integrated the payment method Bitcoin into your shop. In the meantime, however, there are many other arguments that suggest that you should accept Bitcoin as a merchant.

Accept Bitcoin vs. other payment methods

Whoever runs an online shop usually already offers payment methods such as PayPal, credit card or online transfers. In addition to these standard payment methods, there are a large number of other payment methods that are either widespread in some countries and regions or have focused on specific business models.

But all these payment methods have in common that you have to have a lengthy registration, legitimation and verification process about your company and the business model in advance.

Once this process has been successfully completed, the payment option is technically integrated into your own online shop.

Those who have successfully processed their first payments afterwards will be confronted with the problem that the end customer has paid, but as a merchant the purchase amount is not immediately made available.

As a merchant, you are aware of the requirements, rules, conditions and conditions of credit card acquirers, banks or providers of payment methods such as PayPal and online transfers.

These payment processors always stand between the merchant and the customer and set the rules.

The provider of the respective payment method acts as an intermediary between the payer (end customer) and the payee (merchant).

The payee is informed electronically that the end customer has successfully paid and that he can provide the goods or services, but the amount of money is credited with a time offset.

The final credit note on the merchant’s bank account can take between one week (PayPal) and up to one month (credit card) depending on the payment method.

Furthermore, the merchant bears a chargeback risk on the part of the buyer. If the end customer subsequently refuses to pay with the provider of the payment method, the amount will be refunded to the merchant and credited back to the end customer.

The merchant may continue to claim payment from the end customer, which entails additional costs and risks. The merchant does not receive a payment guarantee for any of the usual payment methods. Although there is such a thing as PayPal buyer protection, there are numerous exceptions that one cannot speak of a 100 payment guarantee for the merchant.

Costs for payment processing

For the payment processing service, the payment method providers charge a fee consisting of a fixed transaction fee and a percentage component (discount).

Merchants who accept PayPal pay 35 cents per transaction plus 2.49% on the purchase amount. For a credit card payment, the merchant must pay a discount rate of 2% to 4% plus a transaction amount of approximately 20 cents. These amounts vary depending on turnover and business model.

In summary, an online merchant has to calculate the cost of processing payments of approximately 2.5 of the turnover, plus about 20 cents per transaction.

In addition, the turnover must be pre-financed for up to one month, as the credit is made by the payment method in a time-shifted manner. Similarly, there is no guarantee of payment for the purchase made and there is a risk of chargeback.

If you accept Bitcoin, the following benefits will result:

The cost of processing bitcoin payments for most payment providers is between 0.5 and 1 of the revenue. Bitcoin payment processing via a BTCPay server does not even incur any fees for payment processing.

The credit of Bitcoin sales will be credited immediately on the Bitcoin Wallet and are therefore immediately and unrestrictedly available.

No other entity dictates which business models are allowed or where you are based with your company or business.

No chargeback risk

Traders who accept Bitcoin have no chargeback risk.

The world’s leading payment methods in internet retailing are payments by credit card and PayPal. Both payment methods are so-called “pull transactions”. The merchant makes the payment to the credit card company or PayPal, which then makes the charge with the end customer.

In contrast, there are “push transactions”, which are initiated by the payer. These are for example SEPA transfers, online transfers like Sofortüberweisung and Giropay, as well as the purchase on account.

With all these payment methods, the end customer has to give his personal data to the merchant when ordering, so that the merchant can then make the payment to the credit card company or PayPal.

This transfer of the data to the merchant poses a data protection risk, as this data can be stolen by hacker attacks, as has been the case more often in the past.

But why do merchant demand such extensive data? The merchant collect this data to protect themselves from Chargebacks from end customers.

An example for better illustration:

A merchant sells a picture in his shop and payment is made by credit card.

The next day the customer claims that the picture is not an original but a copy and initiates a chargeback with his credit card company without returning the picture.

The credit card company will not concern itself with the legality of the underlying transaction and will refund the amount to the customer without difficulty.

On the damage remains the merchant, who receives no money and can try to get the painting back.

The merchant can never be sure whether a supposedly honest customer will subsequently initiate a chargeback or perhaps pay with stolen credit card data.

There are essentially two types of chargeback for the merchant. Once a chargeback because a fraudster made a fraudulent order with stolen credit card data and customer data.

In the second form of a chargeback, this is initiated by the customer himself, because for whatever reason he no longer agrees with the purchase.

With a purchase an exchange of goods for money takes place. When buying in a retail shop, the customer pays and receives the goods directly from the seller.

In online trading, the buyer and seller are separated in space and time.

To bridge the gap, banks, credit card companies or PayPal act as intermediaries.

For payment processing, these intermediaries require the merchant to provide customer data in order to prove that payment has been suspended.

If the end customer raises an objection to the purchase and subsequently refuses payment, the end customer contacts the intermediary and demands that the payment be reversed.

This operation is called chargeback. The banks do not check whether the repayment of the payment is justified or whether the end customer has returned the goods.

In the case of a pull transaction, the amount will be reimbursed to the end customer without contradiction by the banks, credit card institutions and also PayPal.

In return, this amount is recovered from the merchant, regardless of whether the service has been provided.

The merchant must decide whether to write off the loss or take legal action to recover the money or goods.

In any case, it is the merchant who suffers the loss, since the intermediaries always credit the customer with the amount of money and debit it to the merchant.

In order to protect yourself as a merchant against chargebacks or fraudulent orders, it is necessary to minimize risks in advance.

Accordingly, extensive data is collected about the end customer, on the basis of which a risk analysis is performed.

In addition to the risk analysis, the data may also be necessary to document any legal claims and to carry out successful debt collection.

Essentially, the merchant must protect itself against customers who fraudulently try to order from it with illegally obtained data and stolen identities.

A payment by credit card or PayPal is a pull transaction in which a merchant is always exposed to a very high chargeback risk.

Only through a comprehensive analysis of customer data is it possible to minimize the risk of fraudulent ordering.

Thus, the merchant must necessarily develop into a data breach and is thus in turn exposed to the risk that fraudsters will want to steal this data from him in order to use the stolen data elsewhere for fraudulent orders.

This creates a cycle of data collection and hacker attacks to the detriment of traders.

These risks can only be eliminated for the merchant through push payment procedures. This includes not only bank transfer but also payment by Bitcoin.

With a Bitcoin payment there is no risk for the merchant that there is a fraudulent order from the Customer. The payment is 100% guaranteed for the merchant and cannot be objected to.

When paying by Bitcoin, the merchant thus has a payment guarantee.

It is therefore not necessary for the merchant to take any precautions for possible fraudulent orders.

Merchant who accept Bitcoin do not need to collect any data about the customers or their order, which is not only necessary for the pure ordering and delivery process.

Anyone can accept Bitcoin

Bitcoin differs from the other payment methods that any merchant can accept Bitcoin.

The use of Bitcoin is freely available to any merchant worldwide. No one needs to be asked for permission, no business records and business models are checked and it doesn’t matter if you’re a big corporation or a small online shop that wants to build an existence.

If you are technically savvy and do it yourself, then the cost of processing payments is zero. If you use the service of a payment provider,you may incur fees up to 1 of the turnover.

The cost of sending a payment shall be borne by the end customer in the form of a transaction fee, which depends on the speed of the transmission.

Another advantage is that a Bitcoin payment made is final. A payment by Bitcoin cannot be retrieved by the Buyer. There is therefore no chargeback risk for the merchant.

Bitcoin is a worldwide payment method. With Bitcoin, a shop operator can offer its goods and services worldwide. As a restriction for the merchant, the logistics remain in the dispatch of physical goods. Otherwise, any potential customer in the world can be served.

A merchant can track the successful payment in the Blockchain after just a few seconds. The credit on the merchant’s wallet will usually be made within the next hour.

Depending on the product and business model, the merchant is free to provide the service immediately or to wait until the credit has been made final.

Who owns Bitcoin and is it my target group?

What’s the best way to pay if no one owns Bitcoin? So it doesn’t make sense if you want to accept Bitcoin as a merchant, but the target group is not interested in Bitcoin at all.

The integration of the payment method Bitcoin into your own shop is associated with costs and effort.
This effort can only be justified if the target group of my shop overlaps with the owners of Bitcoin.

According to a survey by Coindesk in the 3rd quarter of 2018, the owners of Bitcoin are distributed as follows:

Accept Bitcoin for the target group

It is therefore primarily a payment option for young, male and technology-oriented customers.

However, it should not be concealed that the owners of Bitcoin find it difficult to part with his Bitcoin. He tends to keep the Bitcoin (hodl) and prefers to say goodbye to his euros and dollars.

Bitcoin as marketing to increase awareness

If you offer Bitcoin in the shop, you convey the message that you are technically innovative and go with the times. If the target group of the shop belongs to the same group of people who own Bitcoin or are interested in it, one is sure to pay attention accordingly.

Merchant who accept Bitcoin should prominently point this out on the website. Be it on the home page or at least under the accepted payment methods. Similarly, in the context of other marketing activities (flyers, social media), one should point out that one accepts Bitcoin.

It is also recommended that you enter your shop in Bitcoin directories. With Coinpages.io you will find all merchant who accept Bitcoin. There you will also find all other Bitcoin directories where a merchant can register.

Benefits for the merchant

The Bitcoin payment method offers the following advantages:

  • Suitable for all business areas (digital and physical goods)
  • Predestined for digital products and services such as memberships, software, services and content.
  • Payment for micro and nano amounts as for newspaper articles and videos (Pay per View)
  • Products for anonymous payment for which the customer does not have to disclose his personal data
  • No chargeback risk for the merchant
  • Low cost
  • Faster availability of the purchase amount

Benefits for the customer

Especially owners of Bitcoin appreciate the payment method via Bitcoin and prefer this payment method to other methods.

Especially when transferring personal and sensitive data to an unknown merchant, many customers are deterred from buying by credit card.

To watch a video, read a newspaper article or pay for a paid membership, you are reluctant to disclose personal address, bank or credit card information to the merchant.
The customer asks himself the question, What does the merchant do with my data or is the offer perhaps an Subscription trap?

For the tech-savvy target group, fast, uncomplicated and anonymous payment via Bitcoin is a very popular payment method.

So there are a lot of good reasons to accept Bitcoin or at least consider the issue. Learn how to accept Bitcoin, integrate it into an online store as a payment method or accept it in the retail store in the various posts and instructions at Coincharge.

Also read the article, Which business models are particularly suitable for Bitcoin and how the process of a Bitcoin payment takes place from a merchant’s point of view.

This post is also available in: German

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