The first sentence of The Bitcoin White Paper:
A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. - Satoshi Nakamoto
Payments is what crypto was built for. Sadly, people working in crypto are more excited about other use cases these days leaving focus on payments wavering. That doesn’t mean it’s not worth doing. In fact, getting paid in bitcoin is how I built my initial stack and is one of the best ways to dollar-cost-average into your bitcoin position over time.
If you consult or own your own business there are lots of reasons to get excited about accepting crypto as payment.
Reasons To Accept Crypto Payments
- No Middlemen - Middlemen add unnecessary bloat and delays, not to mention they charge fees for doing virtually nothing.
- No Fees - Bitcoin is electronic cash. Just like there's no fee for using cash there's no fee for accepting crypto payments when done correctly. (the customer still pays a network fee, but not the merchant)
- No Chargebacks - The blockchain is immutable. Transactions can't be reversed without you explicitly refunding the transaction yourself.
- Redundancies - If your payment processor (or Visa themselves) have issues, crypto payments can be used as a backup.
- New Markets - Accepting crypto payments online opens your business up to an entirely new consumer base who prefers using crypto.
- Investing - One of the best ways to build a long term position in any investment is to Dollar Cost Average (DCA). By accepting payments bitcoin and other cryptocurrencies, you're essentially DCA'ing into your position without even trying.
Custodial vs Non-Custodial Payment Processors
Just like there are multiple ways to store your crypto, there are multiple options for accepting crypto payments. If you’re just getting started with crypto, and you won’t be working with large amounts of money, a Custodian might make sense. If you’re comfortable custodying your own crypto, you’ll probably prefer to get paid directly to a wallet where you control the private keys.
Custodial Crypto Payment Processors
Custodians make accepting payments a bit easier, however like traditional payment processor or bank, they skim fees and can freeze your account in rare occassions. We got into crypto to avoid using these guys! However they still play an important role in the ecosystem as a bridge between the legacy financial system and the cryptoverse.
- Coinbase - previously had a payments product which enabled subscriptions, however it was discontinued in favor of their non-custodial service Coinbase Commerce
- BitPay - The biggest and most despised crypto payments processor.
- CoinPayments - Accept tons of altcoins as well as bitcoin.
- OpenNode - For lightning. Recently announced integration with SubStack.
Non-Custodial Crypto Payment Processors
Bitcoin payments are initially designed and intended to work non-custodially, meaning no other party should ever hodl onto your crypto. Payments should go directly from your customer's wallet to yours with no middle-men.
- Coinbase Commerce - Our top pick for accepting crypto payments and invoice clients non-custodially.
- BTCPay Server - An open-source Bitcoin community fan favorite. Lots of plugins/integrations however a bit more technical to setup and manage your own server.
- DePay - Haven’t used this yet, but apparently DePay a non-custodial crypto payment gateway which can convert payments on the fly - worth looking into.
- Mycelium Gear - Bitcoin only non-custodial payment processing tool which charges fees. I’ve used them in the past, but they haven’t tweeted since 2015…
A bit of crypto payment history to wrap things up. We’ve all had issues with our banks and payment processors…. In 2017, Nicolas Dorier became so fed up with BitPay that he decided to build BTCPay Server. Now it’s the most popular self hosted payment system for bitcoin.
Written by: @gerbz Gerbz is the founder of BitLift and has been journeying down the crypto rabbit hole since 2013.