Should Your Small Business Accept Bitcoin? What You Need to Consider

It’s pretty fair to say that 2017 was the year that Bitcoin really hit the mainstream. Near the end of the year, you could hardly turn on the TV or check the news without seeing headlines about cryptocurrencies, leading many to take notice and attempt to learn all about them. Similarly, small business owners may be asking themselves if they might be missing out by not accepting Bitcoin alongside cash and credit.

On that note, if you are thinking about making Bitcoin a payment option for your customers, there are a few things you’ll need to consider — including some emerging issues:

How to accept Bitcoin payments

Before you can accept Bitcoin payments at your business you’ll need what’s known as a Bitcoin wallet. Each wallet has its own address, which is typically 34 characters in length. Therefore, in a brick-and-mortar scenario, businesses will likely want to generate a QR code with their wallet address and the price of the goods that customers can then scan with their smartphones in order to send payment. A similar setup can also be arranged for e-commerce.

If this sounds confusing, there are thankfully services that can help. For one, the popular credit card processing service Stripe offers support for Bitcoin. Additionally companies like BitPay have built platforms intended to help merchants accept Bitcoin and deposit their payments in local currency (if they wish).

Transaction fees

One of the major advantages of accepting Bitcoin was that transaction fees were very low. While your typical credit card transaction might cost you 2% to 3% to process, a crypto payment might only cost a cent (although third-party services like those mentioned above might take a small cut). Unfortunately, due to the explosion that Bitcoin has experienced in recent months, it’s becoming much more expensive to complete transactions and verify transfers in a timely manner.

These increasing transaction fees have led some Bitcoin business service providers to make changes to their policies. For example BitPay was recently forced to raise their minimum invoice amount to $100 in order to make transactions economically feasible. Obviously this could prove to be a major problem if things don’t “calm down.”


Another big concern small business owners might have (and should have) about accepting cryptocurrencies is their level of volatility. After all, while it’s extremely unlikely that a dollar will lose 10% of its value overnight, that scenario is quite possible with Bitcoin. This is problematic for two reasons: first, it may make it difficult to set prices for your products when the exchange rate for Bitcoin is constantly fluctuating. Secondly (and likely more importantly), if you’re retaining the Bitcoins you’ve received as payments and the coin price dips, you could effectively be losing money. Then again, if you have long-term hopes for the currency, accepting them as payment could actually serve as an investment strategy. That said it’s probably not a good idea to keep too much of your profits in Bitcoin if it affects your business’s capital and cash flow.

Publicity and practicality

Perhaps the biggest reason entrepreneurs might be considering accepting Bitcoin these days is for publicity. Beyond the media opportunities that could come from reaching out to local journalists about your big step into the future, putting up that Bitcoin sticker in your window is sure to draw attention from passersbys. However the real question is, will that attention really turn into sales? More specifically, will it make customers want to spend their Bitcoins at your establishment?

While Bitcoin’s popularity is undoubtedly booming, it’s unclear how many people are spending it like cash on a regular basis. Aside from a few true believers, anecdotes would suggest most crypto buyers are using coins to hold onto, not to spend. Of course that can always change and there could be benefits for businesses that are ahead of the curve.

There’s no doubt that Bitcoin has been a hot topic in the world of commerce as of late. As a result there are surely several business owners wondering if their business should be accepting the cryptocurrency. Unfortunately, due to the volatility of the Bitcoin and a recent spike in transaction fees, the answer to that question isn’t so simple. Furthermore it’s unclear if the apparent popularity of buying Bitcoins will translate to a significant uptick in spending them. That said, as long as you understand the risks associated with cryptocurrencies and are able to implement acceptance affordably, there may be value in giving your guests another payment option — and perhaps joining the wave of the future in the process.

Also published on Medium.


Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded in 2015 to focus on personal finance and the emerging FinTech markets.

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