Bitcoin accepted 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 as Payment?

By: Ofir Beigel | Last updated: 1/7/21

Bitcoin has taken over the cryptocurrency market. It’s the largest and most well-known digital currency today. Many large companies are accepting Bitcoin as a legitimate source of funds. This post will cover them all.

Who Accepts Bitcoin Summary

A 2020 survey by HSB reveals that 36% of small-medium businesses in the US accept Bitcoin. The most popular companies accepting Bitcoin payments worldwide today are:

Or, you can use this search engine that allows you to search for vendors by products.

If you want a detailed list of companies who accept Bitcoin keep on reading. Here’s what I’ll cover:

1. Major Companies Who Accepts Bitcoin as Payment

Wikipedia

Wikimedia, the company that operates the world’s largest open-source encyclopedia, Wikipedia, accepts donations in Bitcoin. Payment is done through BitPay.

Microsoft

The company allows the use of Bitcoin to top up your Microsoft account. In the past, the company halted its acceptance of cryptocurrency but shortly after resumed their service.

AT&T is the first major U.S. mobile carrier to provide a cryptocurrency payment option to customers through BitPay.

Burger King

According to local news reports, Burger King outlets in Venezuela announced a partnership with Cryptobuyer to accept cryptocurrencies as a mode of payment. Customers can pay in Bitcoin, Dash, Litecoin, Ethereum, and Tether.

Additionally, the German branch of Burger King has begun accepting Bitcoin on its website and mobile app on September 3, 2019. However, this was more of a marketing gimmick that doesn’t enable you to buy at an actual brick and mortar store.

You can only pay with Bitcoins and Bitcoin Cash by ordering delivery online through the Lieferservice delivery service, which works with restaurants throughout the country.

KFC

KFC Canada decided to accept Bitcoin for a limited time in exchange for the “Bitcoin Bucket”. The company processed payment through BitPay and the bucket was to be delivered straight to the customer’s home address.

Overstock

Overstock, a famous American online retailer that sells big-ticket items at lower prices due to overstocking, partnered with Coinbase in order to allow Bitcoin payments for their online orders.

Subway

Several Subway branches accept (or used to accept, the current status is unknown) Bitcoin as payment for their sandwiches. You can see an example in this video:

Twitch

Amazon owned leading game streaming platform accepts Bitcoin and Bitcoin Cash as payment for its services. The company removed this option on March 2019 but then re-enabled it in June.

Pizza Hut

As of November 2020, the giant pizza franchise Pizza Hut can be now purchased and paid for with Bitcoin in Venezuela. This is following the economic sanctions imposed on the country that drove cryptocurrency acceptance to new heights. While this step is far from being global, it could be an indication of things to come.

Miami Dolphins

The Miami Dolphins intend to give home game attendees the ability to pay with Litecoin and Bitcoin when purchasing tickets for the team’s 50/50 raffle, where half of the proceeds benefit the Miami Dolphins Foundation and its charitable causes.

Dalls Mavericks

The Dallas Mavericks now accept Bitcoin as a method of payment for both game tickets and merchandise. BitPay will process all Bitcoin payments through the team’s website.

Virgin Galactic

Richard Branson company that includes Virgin Mobile and Virgin Airlines allows you to pay for space travel with Bitcoins.

Norwegian Air

Norwegian Air Shuttle (Norwegian), Scandinavia’s largest airline and Europe’s third-largest budget airline, plans to provide a payment solution enabling customers to pay for tickets with cryptocurrency.

Namecheap

One of the leading domain name registrants start accepting Bitcoin back in 2013 since it has been requested by the company’s tech audience.

CheapAir

An American online travel agency, established in 1989 has started accepting Bitcoin through Coinbase and later on changed their payment processor to BTCPayServer.

Buy & send gift cards online for retailers like Amazon, Starbucks, and iTunes. The company accepts Bitcoin as payment without any additional fees.

NewEgg

An online retailer of items including computer hardware and consumer electronics. The company is one of the first to accept Bitcoin payment.

The Internet Archive

A San Francisco–based nonprofit digital library with the stated mission of “universal access to all knowledge” accepts Bitcoin donations. Its web archive, the Wayback Machine, contains hundreds of billions of web captures.

The Pirate Bay

An online index of digital content of entertainment media and software. The site accepts Bitcoin and cryptocurrency donations since 2013.

4Chan

A beloved site among crypto users, 4Chan is an imageboard website. Users generally post anonymously, with the most recent posts appearing above the rest.

4chan is split into various boards with their own specific content and guidelines. Registration is not possible. The site accepts Bitcoin, Bitcoin Cash, Ethereum, and Litecoin as payment for a 4Chan pass.

Mega.nz

A cloud storage and file hosting service launched on January 19, 2013, by Kim Dotcom, who had previously founded Megaupload. The site accepts Bitcoin for account upgrades.

Amazon (not directly)

While Amazon, the biggest online retailer today, doesn’t accept Bitcoin directly you can use Purse.io to shop for anything on the site and pay with Bitcoin. The site connects people who have Bitcoin and want to buy on Amazon with people who want to get Bitcoin in return for fulfilling an order.

ExpressVPN

One of the largest virtual private network service that allows you to surf online securely and privately. ExpressVPN is a subscription-based service that accepts Bitcoin.

Benfica

Sport Lisboa e Benfica, commonly known as Benfica is an extremely popular sports club based in Lisbon Portugal. The company accepts Bitcoin for game tickets and merchandise.

1. Stores that Accept Bitcoin as Payment

Aside from the big companies I’ve mentioned in the previous chapter, there are many small and medium businesses (SMBs) that accept Bitcoin as well.

• Alza – Largest Czech online retailer
• Alternative Airlines – A flight-search website that offers ways to book flights using a range of cryptocurrencies.
• Bitcoin.Travel – a travel site that provides accommodation, apartments, attractions, etc.
• Pembury Tavern – A pub in London, England
• Old Fitzroy – A pub in Sydney, Australia
• The Pink Cow – A diner in Tokyo, Japan
• Zynga – Mobile gaming
• EZTV – Torrents TV shows provider
• Lumfile – Free cloud base file server – pay for premium services
• Etsy Vendors – 93 of them
• PizzaForCoins.com – Domino’s Pizza signed up – pay for their pizza with bitcoins
• Bitcoincoffee.com – Buy your favorite coffee online
• Grass Hill Alpacas – A local farm in Haydenville, MA
• Jeffersons Store – A streetwear clothing store in Bergenfield, N.J
• Helen’s Pizza – Jersey City, N.J., you can get a slice of pizza for bitcoin.
• A Class Limousine – Pick you up and drop you off at Newark (N.J.) Airport
• Seoclerks.com – Get SEO work done on your site cheap
• Fancy.com – Discover amazing stuff, collect the things you love, buy it all in one place
• Humblebundle.com – Indie game site
• BigFishGames.com – Games for PC, Mac, and Smartphones (iPhone, Android, Windows)
• Suntimes.com – Chicago based online newspaper
• San Jose Earthquakes – San Jose California Professional Soccer Team (MLS)
• Crowdtilt.com – The fastest and easiest way to pool funds with family and friends
• Lumfile – Server company that offers free cloud-based servers
• Museum of the Coastal Bend – 2200 East Red River Street, Victoria, Texas 77901, USA
• Gap, GameStop and JC Penney – have to use eGifter.com
• Fight for the Future – Leading organization finding for Internet freedom
• i-Pmart (ipmart.com.my) – A Malaysian online mobile phone and electronic parts retailer
• Curryupnow.com – A total of 12 restaurants on the list of restaurants accept bitcoins in San Francisco
• Dish Network – An American direct-broadcast satellite service provider
• The Libertarian Party – United States political party
• Yacht-base.com – Croatian yacht charter company
• Euro Pacific – A major precious metal dealer
• CEX – The trade-in chain has a shop in Glasgow, Scotland that accepts bitcoin
• Straub Auto Repairs – 477 Warburton Ave, Hastings-on-Hudson, NY 10706 – (914) 478-1177
• PSP Mollie – Dutch Payment Service
• Intuit – an American software company that develops financial and tax preparation software.
• ShopJoy – An Australian online retailer that sells novelty and unique gifts
• Lv.net – Las Vegas high-speed internet services
• Grooveshark – Online music streaming service based in the United States
• MIT Coop Store – Massachusetts Institute of Technology student bookstore
• SimplePay – Nigeria’s most popular web and mobile-based wallet service
• SFU bookstore – Simon Fraser University in Vancouver, Canada
• State Republican Party – First State Republican Party to accept bitcoin donations
• mspinc.com – Respiratory medical equipment supplies store
• Shopify.com – An online store that allows anyone to sell their products
• Famsa – Mexico’s biggest retailer
• Naughty America – Adult entertainment provider
• Mexico’s Universidad de las Américas Puebla – A major university in Mexico
• MovieTickets.com – Online movie ticket exchange/retailer
• Dream Lover – Online relationship service
• Rakuten – A Japanese e-commerce giant
• Badoo – Online dating network
• RE/MAX London – UK-based franchisee of the global real estate network
• T-Mobile Poland – T-Mobile’s Poland-based mobile phone top-up company
• Stripe – San Francisco-based payments company
• WebJet – Online travel agency
• Green Man Gaming – Popular digital game reseller
• Save the Children – Global charity organization
• NCR Silver – Point of sales systems
• One Shot Hotels – Spanish hotel chain
• Coupa Caféin Palo Alto
• PureVPN – VPN provider
• That’s my face – create action figures
• Foodler – North American restaurant delivery company
• Amagi Metals – Precious metal furnisher

While many companies are very excited to let us know when they start accepting Bitcoin they don’t bother to update if they stop. Therefore this list can be somewhat outdated, so take it with a grain of salt.

Additional SMBs that accept Bitcoin can be found here and here. Also, many people have started advertising their SMBs in the comment section of this page.

3. Frequently Asked Questions

Can Bitcoin be Converted to Cash?

Yes, you can convert Bitcoin to cash at a Bitcoin ATM or through a Bitcoin exchange.

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