Using Cryptocurrency and E-commerce to Expand Your Business

Cryptocurrency is being accepted by an increasing number of small businesses. Getting started may be daunting at first, but COINQVEST is here to help you along the way.

You may have considered accepting Bitcoin (BTC) as payment for your e-commerce store at some point, whether you are a crypto king or still learning the ropes. With all of the buzz surrounding cryptocurrency, blockchain, and NFTs, all e-commerce store owners should at the very least understand how cryptocurrency can be used for online purchases.

Despite the recent volatility in cryptocurrency prices, major e-commerce platforms such as BigCommerce, WooCommerce, and even Shopify now accept cryptocurrency payments through crypto payment processors like COINQVEST.

In this blog, we’ll go over some of the basics of what cryptocurrency is, which companies accept it, the benefits and drawbacks of accepting cryptocurrency, and how to accept cryptocurrency safely in your e-commerce store.

 What Exactly is Cryptocurrency?

A cryptocurrency is a digital form of currency (lines of computer code) that allows users to transfer money anonymously and is not issued or controlled by a bank or government. Bitcoin is the most popular currency to date, and these virtual coins can be purchased, sold, and stored on popular exchanges such as Coindesk, as well as used to buy online goods wherever they are accepted.

To make a purchase, you must first store Bitcoin in a digital wallet, then transfer Bitcoin from your virtual wallet to the vendor’s. 

Some of the Major Cryptocurrencies to be Aware of.

These are some of the most important coins to know, according to the major cryptocurrency exchanges:

1. Bitcoin — the original cryptocurrency.

2. Ethereum — is more energy-efficient than Bitcoin.

3. Stellar Lumens — faster with lower transaction costs with a native stablecoin network.

4. Litecoin — a derivative of Bitcoin with slightly lower transaction costs.

Stores That Accept Bitcoin and Cryptocurrency

Today, Bitcoin and other cryptocurrencies are accepted across the internet. Conveniently, they are also welcomed by major e-commerce platforms:

1. Shopify

2. WooCommerce

3. BigCommerce

4. Magento

Sure, large e-commerce platforms and retailers accept cryptocurrencies for purchases, as we’ve seen, but should they? Is it a viable option for online retailers? Let’s weigh the advantages and disadvantages and talk about taxes.

Cryptocurrencies’ Advantages in E-commerce

1. Transaction fees are reduced.

Credit card companies and payment apps such as Stripe and Square charge transaction fees ranging from 3% to 5% on each transaction. Many e-commerce companies include these charges in the prices of their online stores. Cryptocurrency transactions frequently have no fees or fees as low as 1%. When transferring cryptocurrencies to national fiat currencies like the US dollar, however, there are cryptocurrency conversion fees.

2. Cryptocurrency allows for anonymous purchases by using encrypted wallet addresses. 

It’s essentially the same as using unmarked cash for anonymous transactions and the bank averse. This allows your customers to purchase items without revealing their personal information, and it allows you to conduct business without fear of violating any privacy laws.

3. Reduce chargebacks and fraud.

Contrary to popular belief, the blockchain technology that underpins cryptocurrency was created with the goal of reducing fraud. Accepting cryptocurrency reduces the ability for fraudulent chargebacks or returns because money is exchanged instantly, it cannot be rescinded, transactions are often immediately verifiable, and it cannot be forged.

Cryptocurrencies’ Drawbacks in E-commerce

1. Volatility

While the value of national currencies (such as the USD) fluctuates relatively slightly, the value of cryptocurrencies fluctuates dramatically. Massive upward swings have recently occurred, but a significant drop could pose a significant risk to e-commerce retailers who rely on cash flow for inventory replenishment and other daily operations.

2. There is no buyer protection.

When it comes to fraudulent chargebacks and purchases, consumers have had credit card companies protect them from unauthorized charges. When it comes to crypto payments, there are no safeguards, insurance, or recourse; once it’s gone, it’s gone. As a result, before using cryptocurrency as a payment method, consumers may need to have greater understanding of the tools they are using and do more research in the retailer or brand they are interacting with.

3. Energy-intensive networks.

Bitcoin mining (which is essentially what drives Bitcoin’s network security and functionality) uses more electricity each year than Argentina and has a carbon footprint comparable to that of New Zealand. Elon Musk recently caused a drop in the price of Bitcoin by announcing that Tesla would no longer accept Bitcoin due to environmental concerns.

4. Taxes on Cryptocurrencies

Despite the fact that Bitcoin is unregulated, the government requires you to report bitcoin transactions as well as the revenue/loss from holding the “property” – as defined by the IRS.

“A taxpayer who receives virtual currency as payment for goods or services must include the fair market value of the virtual currency, measured in US dollars, as of the date the virtual currency was received,” according to the IRS.

So as a US citizen, you must consider the implications of reporting (or neglecting to report) cryptocurrency profit or income in regards to the financial well-being of your business. 

How to Accept Cryptocurrency On Your Site

Fortunately for online businesses, there are options these days. You can simply integrate an e-commerce cryptocurrency payment processor like COINQVEST into your store to start accepting Bitcoin on your e-commerce site. 

Most e-commerce platforms (such as Shopify, Magento, WooCommerce, and BigCommerce) already have integrations, so search their app stores for COINQVEST’s integrations.

As always in this space, we recommend you do your due diligence. Make sure to compare various cryptocurrency payment gateway options. Take into account the following:

• Transaction fees
• The frequency of payouts
• Supported currencies
• Countries that have received assistance
• Customer service.

Once you’ve decided to accept cryptocurrency as a payment method, make sure to promote your progressiveness and tech-savviness to your clientele. Displaying banners or signs that say “Cryptocurrency Accepted Here!” on your website could boost sales or loyalty.

If a direct integration isn’t possible, think about the following alternatives:

Hosted Checkouts – One of the most common ways to accept payments for an online business is through a hosted checkout page, which is essentially a checkout web form that is developed, maintained, and hosted by a payment facilitator. Using a hosted checkout page is simple, quick, and secure. COINQVEST offers a hosted checkout solution for your business.

If you have a web developer at your disposal, you can work with COINQVEST’s SDKs and APIs to weave cryptocurrency payments into your site. This bespoke option would allow your site to fully utilize COINQVEST’s functionality and tools.

To Sum Up

If you decide to accept Bitcoin and other cryptocurrencies in your online store, make sure your system, transactions, and funds are all as secure as possible. For your crypto exchanges and wallets, use strong passwords and multi-factor authentication (MFA). Also, make sure to update, backup, and encrypt your systems and crypto wallet on a regular basis.

If these funds are critical to your business, consider cold storage, which involves keeping an offline cryptocurrency wallet, such as a flash drive, and not keeping large amounts of Bitcoin in your hot wallet for long periods of time.