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Sep 20, 2021

Using Cryptocurrency and eCommerce to Expand Your Business

Cryptocurrency is being accepted by an increasing number of small businesses. However, if you want to try it with your company, there's a lot to learn.

You may have considered accepting Bitcoin as payment for your e-commerce store at some point in the past, 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 wallets such as COINQVEST.

In this blog, we'll go over what cryptocurrency is and which companies accept it, as well as the benefits and drawbacks of accepting cryptocurrency, and how to accept cryptocurrency safely on your e-commerce store.

What exactly is cryptocurrency?

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

To make a purchase, you must first store Bitcoins in a digital wallet, which can be found on a hard drive using secure software or on online exchanges (such as Coinbase), and then transfer Bitcoin from your virtual wallet to the vendor's.

The top four cryptocurrencies to be aware of

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

  1. Bitcoin — the original cryptocurrency
  2. Ethereum — more energy efficient than Bitcoin
  3. Stellar Lumens — faster and lower transaction costs with stablecoin network
  4. Litecoin — derivative of Bitcoin with slightly lower transaction costs

Stores that accept Bitcoin and cryptocurrency

Today, Bitcoin and other cryptocurrencies are accepted by ecommerce stores that use the following platforms:

  1. Shopify

  2. WooCommerce

  3. BigCommerce

  4. Magento

Is cryptocurrency a viable option for online retailers?

Large e-commerce platforms and retailers accept cryptocurrencies for purchases, as we've seen, but should they? Should you do it? Let's weigh the advantages and disadvantages and talk about taxes.

Cryptocurrency's 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.

  1. 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.

  1. 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, and it cannot be forged.

Cryptocurrency's Drawbacks in E-Commerce

  1. Volatility

While the value of national currencies (such as the US dollar) fluctuates only 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.

  1. 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 or recourse; once it's gone, it's gone. As a result, before using cryptocurrency as a payment method, consumers may need to have more faith in the retailer or brand.

  1. Using a lot of energy

Bitcoin mining (which is essentially what powers the cryptocurrency system) 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.

  1. Taxes on Cryptocurrencies

Despite the fact that Bitcoin is unregulated, the government requires you to report your 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.

How to Accept Cryptocurrency On Your Site

Simply integrate an ecommerce cryptocurrency payment processor like COINQVEST into your store to start accepting Bitcoin on your ecommerce site. Most ecommerce platforms (such as Shopify, Magento, WooCommerce, and BigCommerce) already have integrations, so look through their app stores.

Make sure to compare various payment gateway options. Take into account the following:

  • Fees for transactions,

  • The frequency of payouts,

  • currencies that are supported,

  • Countries that have received assistance,

  • And there's customer service.

Once you've accepted cryptocurrency as payment, make sure to promote your progressiveness and tech-savvy to your clientele. You can put up signs that say "Cryptocurrency accepted here" on your website.

Are you unable to integrate your store directly?

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. It is thought that using a hosted checkout page is simple, quick, and secure.

To Sum It Up

If you decide to accept Bitcoin and cryptocurrency 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 Bitcoin wallet, such as a flash drive, and not keeping large amounts of Bitcoin in your wallet for long periods of time.

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Martin Dominic Banguis Head of Marketing