Accepting bitcoin as payment

How to accept Bitcoin, for small businesses

It has been suggested that this article is merged with Merchant Howto.

This guide is intended for small business owners who wish to help promote Bitcoin by accepting it as payment for goods and services. It’s written with the assumption that you operate a regular business that sells goods or services for regular national currency such as dollars, and that you wish to accept Bitcoin as another legal way to pay, and that you intend to pay taxes on your Bitcoin income just like any other income.

With Bitcoin being touted as a way to conduct anonymous transactions and as way to compete with government currency, many small business owners wonder what’s the right way to accept and account Bitcoin, or if it’s legal or ethical, or whether and how they should pay taxes on income received through Bitcoin.

Bitcoin has been formally recognized by some governments and authorities as a «currency», but in practice, Bitcoin is no different than accepting payment in other forms such as cash or gold or scrip or gift cards or foreign currency. We think that it is pretty much the same as the local businesses of Great Barrington, Massachusetts choosing to accept their locally-printed «Berkshire Bucks» to support their local economy.

Contents

Starting to accept Bitcoin for transactions

Accepting Bitcoin at a small business is best started in whichever manner keeps the accounting simple for you. This will vary by the type of business you are operating.

Start with a sign

If you expect that the number of people interested in using Bitcoin is small, you might simply start by posting a sign or a note: «We Accept Bitcoin», and ask people to contact you directly in order to make a payment. Even if hardly anybody uses Bitcoin as a payment method, you’re helping Bitcoin in two ways: one, by increasing awareness, and two, by making your customers more willing to accept Bitcoin as payment from others in the future, because now they know somewhere they can spend it.

Accepting Payment

If you sell things in a brick and mortar shop, customers can pay using hardware terminals, touch screen apps or simple wallet addresses through QR Codes.

For an online website, accepting Bitcoin should be implemented by a competent programmer and you should run a full node, especially if you sell larger-ticket items.

Smart Phone or Tablet

You can use a dedicated app or webapp that generates a QR code on the fly including the amount. Many wallets directly support QR code scanning for payment.

Accounting

When a customer makes a payment, you might simply issue a credit to their account. Ideally, you want to enter it in a way that suggests you received a payment. If on the other hand, you’re giving «discounts» for Bitcoins, but then you are selling the Bitcoins for currency and then counting that as income, then chances are good that your calculation of income is making up for it. Ask your accountant.

Businesses that offer gift cards

If your business sells gift cards or gift certificates, you may find that the easiest way to accept Bitcoin is to accept it only for the purchase of gift cards, and then require the gift cards to be used for actual purchases of goods or services. This way, the accounting practices you already have in place for processing gift cards can be put to use. The accounting for Bitcoins would then be minimized to tracking sales of a single SKU.

This method is also ideal for retail food establishments and convenience stores, where the payment of Bitcoins through a mobile phone for a small daily food purchase might be cumbersome or disruptive, especially in front of a line of other customers. Bitcoins in this case would be best used to reload prepaid cards that can then be swiped at point-of-sale.

If you don’t accept gift cards, but you already accept credit cards through a swipe terminal, consider the possibility that you could add a retail gift card system through the swipe terminal you already own. Many point-of-sale terminals, including ones from VeriFone®, are designed around the ability to support multiple applications on the same terminal. Gift cards are also highly profitable because of «breakage», or in other words, the fact that a significant percentage of them never get redeemed.

You could consider adding a private label gift card program from a provider who specializes in this, not just as a jumpstart to accepting Bitcoins, but as an extra boost to income. A private label gift card service provider necessarily have to handle your funds — they can simply provide a solution that keeps track of the balance on the cards on your behalf, including features that allow users to check their balances by phone or by web. Such a solution, of course, is also what makes the cards swipeable through the card reader.

Businesses that mail invoices

Does your business send out invoices to customers? Adding one line may make a huge impact for the Bitcoin economy. Perhaps you list it as a payment option just after Visa, MasterCard, and American Express, even if that means your customer must call or e-mail to make a payment.

If you have access to the programming expertise such that you can generate Bitcoin addresses programmatically, consider generating a brand new Bitcoin address for each invoice, and print it on the invoice. When a Bitcoin payment arrives, you’ll automatically know where it should arrive.

Customers might wonder how much BTC they should pay in order to satisfy an invoice in full. Your invoice should suggest an amount.

You might be able to anticipate the possibility that even though a Bitcoin address can be printed on an invoice or payment stub, that they are very cumbersome for most people to type, especially being a mix of uppercase and lowercase letters. However, you should probably still do it anyway. The customer is probably going to want some paper trail for his payment. Giving him a pre-printed payment stub with a pre-printed address will satisfy that, because the customer can independently and publicly prove through Block Explorer that the payment took place.

Does your business have a website? On your invoice, consider allowing them to go to a special URL to get the address to make a Bitcoin payment just by typing in their invoice number. This way, they can see the Bitcoin address, copy and paste it directly into their Bitcoin client.

Use a brand new address for each invoice whenever possible, and use it only once. This benefits the customer as it removes any ambiguity as to which customer is making which payment and for which invoice.

Avoiding fraud

You should also consider the possible risk that fraudsters could send counterfeit invoices to your customers, and entice them to make a payment to a Bitcoin address they control, instead of you. While that isn’t likely in general — it depends on how well a fraudster could find out who your customers are in the first place — it would certainly be an unpleasant situation if it ever happened. One way you could control that is, whenever possible, never let people try to type Bitcoin addresses off payment stubs — instead, force people to get the full Bitcoin address from your website via secure SSL. But, still print most of the address on the payment stub (perhaps with four or five characters starred out), so that the customer’s need for a paper trail can be satisfied, so they can prove they paid if there is ever a dispute. Merchants can also use the IP address geolocation to understand the close proximity of users. There is automated solution such as FraudLabs Pro that automates the screening of Bitcoin transactions to determine risk level.

Setting Prices

When a business accepts bitcoins for payment, there generally is the need to convert them to the currencies used for paying suppliers, employees and shareholders. Some merchants set prices based on the current market rate at the time the price quote is presented to the customer

Bitcoin Prices lists the exchange rate for many currencies on multiple exchanges.

When prices are determined using an automated process, the current market rate can be based on either a current price or on a weighted average basis.

When bitcoin funds for purchases are received, some merchants instantly exchange those proceeds into the preferred currency used. Hedging for each transaction can nearly entirely eliminate exchange rate risk that the business is exposed to when accepting bitcoins for payment.

Contract

A sales contract might be used to ensure that specific terms are met to lessen the chances of a misunderstanding. For instance, the party sending payment is responsible for paying any transaction fee that might be necessary. A contract might specify that a transaction fee must be paid and what amount, so as to prevent the situation where the transaction is considered a low priority transaction and thus isn’t confirmed quickly.

Other items that might be addressed in a contract:

• Requirement and handling of escrow through an escrow service.
• Jurisdiction for disputes.
• Refund policy (particularly with the exchange rate being volatile)

Paying taxes on Bitcoin income

Tax compliance is a topic of concern for small businesses. We aren’t accountants or lawyers, and can’t give legal or accounting advice.

But in many respects, Bitcoin transactions work very much like cash. Just like Bitcoin, cash is anonymous and doesn’t leave a paper trail, yet is widely used in commerce every day.

Ask yourself how you would handle a cash transaction. Do you accept cash transactions? Do you normally pay taxes on cash transactions? The answer for Bitcoin should probably be the same.

As for how to decide what a Bitcoin transaction is worth: the IRS, as far as we know, has never issued a guide mentioning how to value Bitcoin transactions. But they have rules and guidelines on how to value transactions made in foreign currency or «cash equivalents». We imagine the accounting would be similar.

With Bitcoins, there’s likely to be some difference between the value of BTC when you received them as payment, versus when you go to exchange them for another currency like USD, should you decide to do so. This scenario, likewise, would be no different if you accepted foreign currency or gold as payment. Under some scenarios, it might make sense to book the dollar value of BTC income as it is received, and then to book any difference incurred when it is exchanged for fiat currency. Under others, it might make sense to book the whole thing at the time of exchange.

Perhaps you might talk to your accountant. You don’t need to get into a discussion with your accountant about block chains and private keys or the philosophy behind a decentralized currency. By comparing the fundamentals of Bitcoins to accounting concepts already well understood by the public, you can probably get all the answers you need. What would you ask your accountant if you decided that you wanted to accept Berkshire Bucks or 1-ounce gold coins as payment?

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Who Accepts Bitcoin? 11 Major Companies

In 2021, your company is a status symbol if they are daring enough to test the status quo and accept Bitcoin. Whether it is for marketing purposes or to stay up with the times many companies have benefitted by being early adopters. Here are a few major companies that are currently accepting Bitcoin, as credit cards become less and less used online.

Note: You can also use Spendabit to find places to buy most items with Bitcoin.

Major Retailers

Microsoft

Microsoft has been accepting Bitcoin for use in its online Xbox Store since 2014. They temporarily took a pause from accepting it due to the volatility and now again are accepting it strictly for the Xbox store credits.

Bill Gates has commented on Bitcoin many times saying things such as “Bitcoin is better than currency”.

Overstock

Overstock is currently leading the way in the shopping and cryptocurrency field. Overstock goes as far to accept multiple kinds of cryptocurrency, not just bitcoins.

Not only is Overstock accepting bitcoin but they are holding it too! Theses are the types of vendors that serve the bitcoin community in the best possible way! They are clearly in it for the long haul and not simply using Bitcoin as a marketing ploy.

Just make sure to choose Bitcoin as your payment method during the checkout process. Here is what that will look like:

The next time you need household goods or furniture, make sure to go support overstock.

Home Depot

Home Depot is the largest Hardware Store Chain in the United States.

Home Depot’s acceptance is huge because it means you can essentially build you entire house by purchasing materials using Bitcoin.

Home depot accepts Bitcoin payments via Flexa’s checkout systems installed in their stores. This makes it super simple to checkout using Bitcoin since Geminis partnership with Flexa has taken out all of the friction traditionally involved with Bitcoin payments.

Namecheap

They are a pro internet freedom company used to purchase domain names and is a favorite in the cryptocurrency community for their willingness to accept bitcoin and fight for freedom.

You can receive a credit on your Namecheap account by easily sending in Bitcoin.

Starbucks

Starbucks initially disappointed the Bitcoin world when it was prematurely reported that Starbucks would begin accepting Bitcoin payments directly in stores in 2019. However, Starbucks later clarified that the reports were wrong on a couple of fronts. First, they would not be accepting Bitcoin payments directly. Instead, they would be partnering with future’s exchange Bakkt and second, no Bitcoin payments would be accepted until mid-2020 when the Bakkt app launches

Thankfully that app has finally launched, which means you can make Bitcoin payments in Starbucks right now!

Whole Foods

Whole foods is partnered with Winklevoss Flexa spending app ‘Spedn’. Using the Spedn app, you can buy all your whole food groceries using Bitcoin, Litecoin, or the Gemini dollar with no problems. The Spedn app doesn’t just limit you to whole foods though. Regal Cinemas, Gamestop, Jamba Juice, and Baskin Robbins are among the many other merchants now willing to take the jump into Bitcoin.

NewEgg

Newegg is a company well known in the cryptocurrency community for purchasing cryptocurrency mining hardware. They sell all sorts of computer hardware on all ends of the spectrum.

Recognizing their popularity in the cryptocurrency community, NewEgg started accepting bitcoin for their hardware.

Lolli

Lolli lets you get free Bitcoin just by spending money at the store you use everyday!

You use your credit card, and get paid Bitcoin for free.

These stores include major brands like Walmart, Jet, Groupon, Overstock, Godaddy, Macy’s, CVS, and nearly any other websites.

Fold App

Fold is similar to Lolli in that it lets you earn Bitcoin by spending money at your favorite stores.

You can link up your credit cards to the app and it will award your free Bitcoin whenever you made a purchase at a participating store or restaurant.

Try Purse.io

Purse.io is sort of the opposite of lolli. You spend Bitcoin to buy from places like Amazon and various other online retailers AND you get 5-15% off the price advertised. Purse works like this:

1. You select a product on a site that you want to buy from.
2. Purse finds someone with points or a gift card to that store.
3. That person buys the product for you.
4. You send purse the bitcoin to pay for it.
5. Purse gives the Bitcoin to the person who bought the product for you.

And that’s it — everyone wins!

For while, new users could not sign up because Purse was shutting down operations, but they have since decided to keep the company going.

If you want to buy from Amazon using Bitcoin, purse is the best way, so keep your eyes out for sign ups to reopen!

Gift Card Services

Many stores have yet to add support for Bitcoin directly, which is why a few services have stepped in to fill in the gap while we wait for wider adoption. These services essentially take your Bitcoin and turn it into credit with the store of your choice. Coincards and Bitrefill are the biggest.

CoinCards

With Coincards, you can buy gift cards from over 140 merchants using Bitcoin. You can also use CoinCards to pay up your phone cards as well.

CoinCards is really handy if the store you want to buy from does not support Bitcoin. With gift card services like CoinCards, nearly everyone accepts Bitcoin. And since CoinCards is the one buying the gift cards, your identity stays hidden, so you can purchase from any of their supported merchants (even in store) without exposing your identity.

CoinCards has both an USA site (for US brands) and a Canadian site (for Canadian brands).

Bitrefill

Bitrefill is a service very similar to CoinCards. With Bitrefill, you can buy gift cards from over 750 merchants.

Like CoinCards, it’s handy to use Bitrefill to remain private when shopping online or in person.

Bitrefill also accepts lightning payments if you want to experiment with Bitcoin’s latest technology.

Specific Needs

For full coverage of most of your Bitcoin shopping needs, try the websites listed below.

Green Energy

Massachusetts Solar announced in February it would be accepting Bitcoin as payment for its off-grid solar panel systems.

Electronics

Purse.io and Overstock rule this category due to the sheer number of electronics you can find on their sites.

Newegg.com is a runner up in this category. They carry most of your electronic needs.

Household Items and Kitchen

Overstock.com is the best place to find items for household items and the kitchen.

KFC Canada — They are one of the newest additions to the food companies that are accepting Bitcoin. They strategically have taken it upon themselves to join the twitter Bitcoin community by memeing their way to many cryptocurrency followers.

KFC Canada presents The #Bitcoin Bucket. Sure, we don’t know exactly what Bitcoins are, or how they work, but that shouldn’t come between you and some finger lickin’ good chicken. https://t.co/2OKuCHk5Hb pic.twitter.com/UwaduB8toi

Whether this is just a marketing ploy, or they are actually in it for the long haul hasn’t been clear yet.

Why order anything else when you can just buy steaks with Bitcoin? This is all the you need to survive the cryptocurrency jungle.

Pex Peppers offers some super spicy hot sauces for Bitcoin!

Bees Bros have a great selection of honey, lip balm and soap.

If you are in France, Just Eat now accepts Bitcoin when you order food through their service.

Sports Teams

Lots of sports teams are waking up to the Bitcoin revolution and are trying to beat the rest to adoption as a way to stand out from the competition. Support these teams!

• Dallas Mavericks

Mark Cuban, famed Shark Tank investor and owner of the Dallas Mavericks Basketball team is also a staunch Bitcoin Bull. Anyone who attends a game at the Dallas Mavericks stadium can buy anything using Bitcoin as well as tickets to future games on their website.

The Dallas Mavericks have been an outspoken advocate for Bitcoin, opening up opportunities for the team as it starts to accept Bitcoin for ticket sales and merchandise.

The Mavericks aren’t the only sports team supporting a cryptocurrency. The Miami Dolphins have also decided to jump in the crypto waters and allow its patrons to buy tickets and food using Bitcoin clone, Litecoin.

This collaboration propels Litecoin in front of an audience of millions of people around the world at a time where adoption of cryptocurrencies continues to gain momentum and the ecosystem is able to support real world use cases in ways previously not possible. We see this as a powerful way to raise awareness and educate people about Litecoin and cryptocurrencies on a tremendous scale.

Sleep, Bed and Bath

Overstock.com has the largest selections for bed and bath. There are also many ways to buy furniture.

Mattresses are something many bitcoiners have used their earnings on. Purse.io is a good option since major mattresses like the Purple, Tuft and Needle, and Casper are available on Amazon.

Ghostbed apparently accepts Bitcoin directly for its mattresses.

Cell Phone Carriers

Of the major US & UK cellular network providers, AT&T is the first one to accept Bitcoin. Shortly after, Virgin Mobile also started supporting Bitcoin payments.

Travel

Expedia.com — Expedia is currently the easiest way to purchase flights and forms of travel with Bitcoin.

cheapair.com — Cheap Air accepts Bitcoin for flight purchases.

ScubaOtter has tips on how to buy scuba gear with bitcoin.

Alternativeairlines.com is a flight-search website that offers ways to book flights from over 600 global airlines.

Education

You can actually now use Bitcoin to buy your PhD from Curtain University, Western Australia’s largest University.

Banks

Blockfi accepts Bitcoin, which can then be used to earn interest like a savings account.

Beauty and Health

Overstock.com and Purse.io is your best bet when it comes to beauty and health. You can also get cleaning services with Bitcoin.

If you need cosmetics, Bitrefill offers gift cards for Ulta and Coincards offers cards for Sephora.

Twitch

There is a wide overlap between people are are into Bitcoin and people who enjoy playing video games.

Twitch is an online streaming platform for all sorts of activities, but mostly it is used for gamers to stream their play sessions to other enthusiasts.

Using Bitcoin to pay for your subscriptions is a great way to support your favorite streamers while staying private.

Does Amazon Accept Bitcoin?

Amazon does not accept Bitcoin. But you can buy Amazon gift cards at Bitrefill with bitcoin and then spend on Amazon.

You are also able to buy from Amazon using purse.io and you get from 5-15% off your purchase if you do.

Does Walmart Accept Bitcoin?

Walmart does not accept Bitcoin. But you can buy Amazon gift cards at Bitrefill with bitcoin and then spend at Walmart.

Non-Profits

Wikipedia

The worlds largest collaborative encyclopedia now accepts Bitcoin for donations. This amazing organization relies on all of us to support their efforts, and Bitcoiners around the world can contribute by sending them some Bitcoin every month.

Wikileaks

Slightly more controversial, Wikileaks (EU) also accepts Bitcoin. In fact, they are famous for being one of the first organizations of any kind to accept Bitcoin ever.

As an organization who’s sole purpose is to leak state secrets, such as Edward Snowden’s revelations about PRISM and the NSA’s spying on its own citizens, its no wonder that all of Wikileaks traditional banking was shut down, forcing him to lean on Bitcoin.

Julian Assange even mentioned how he made 50,000% return on Bitcoin thanks to the US government.

My deepest thanks to the US government, Senator McCain and Senator Lieberman for pushing Visa, MasterCard, Payal, AmEx, Mooneybookers, et al, into erecting an illegal banking blockade against @WikiLeaks starting in 2010. It caused us to invest in Bitcoin — with > 50000% return. pic.twitter.com/9i8D69yxLC

— Defend Assange Campaign (@DefendAssange) October 14, 2017

In July of 2020, Wikileaks also announced that they are now not only accepting Bitcoin payments but also lightning network payments for their store.

Whether you support Wikileaks or not, we had to add it to this list, considering it such a famous example, not only of an organization that accepts Bitcoin but also as one that proves Bitcoin is capable of doing what it claims to be able to do: be a permissionless, censorship-resistant medium of exchange.

What can you buy with ethereum

You can use Ethereum and other altcoins at a few of the merchants mentioned on this page, such as Overstock.com and JM Bullion. However, there is no doubt that Ethereum is accepted at far fewer merchants than Bitcoin, so it’s really not a good use case for ethereum and using Bitcoin will be much easier.

Restaurants that Accept Bitcoin

Wondering where you can find a meal in exchange for a few of your sats?

We’ve got you covered in this in-depth guide.

Find out the top spots to spend Bitcoin at restaurants below!

Subway

Subway was the first major food chain to accept Bitcoin.

The first Bitcoin purchase at a Subway happened all the way back in 2013 in Moscow, Russia.

This purchase actually marked the second time ever food had been purchased with Bitcoin (the first being at a Papa Johns in Jacksonville, Florida).

Not all or even most Subways accept Bitcoin today, but keep your eyes peeled and you may spot one.

Coffee Shops

Starbucks was the first big restaurant chain to began accepting Bitcoin via payments app SPEDN by Flexa.

Flexa is a subsidiary of Gemini, and they have since added other coffee shops to the Spedn app, such as Caribou Coffee, Jamba Juice, and Baskin Robbins.

Starbucks has also partnered with Bakkt to support BTC payments at the register, allowing users to forgo the Flexa app and pay directly to Starbucks.

Burger King

In 2016, some Netherlands Burger King locations began to accept Bitcoin, but the adoption didn’t stop there.

In 2019, Burger King Germany and Burger King Venezuela began accepting bitcoin payments through orders on its website. Not long after that, some locations in the Netherlands

Conclusion

If you are willing to look hard enough, these days you can basically spend your Bitcoin anywhere (although you will pay a tax); if not directly with the merchant then through a third party gift card purchaser. While some of these methods are little unconventional, they do help make Bitcoin more useful today and easier to adopt for tomorrow.

Let us know if you find any other merchants that should add to this list!

About the Author: Jordan Tuwiner

Jordan Tuwiner is the founder of BuyBitcoinWorldwide.com. His work has been featured in The Guardian, International Business Times, Forbes, VentureBeat, CoinDesk and many other top Bitcoin media outlets. His articles are read by millions of people each year looking for the best way to buy Bitcoin and crypto in their country.

He has also written extensively about the history, technology, and business of the crypto world. Jordan is also the creator of some of the internet’s most famous Bitcoin pages, including The Quotable Satoshi and Bitcoin Obituaries.

To learn more about Jordan, see his full bio.

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