E-commerce: how to accept bitcoin payments
E-commerce: how to accept bitcoin payments
Bitcoin

E-commerce: how to accept bitcoin payments

By Marco Cavicchioli - 23 Mar 2020

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How to accept bitcoin payments on an e-commerce website? There are basically two ways: 

  • direct payments,
  • compatible gateways.

The system with direct collections

The first system requires the operator of the website to activate their own bitcoin wallet and provide the customer with the public address to which to send the BTC payment. 

In this case, it is best to use a different public address for each order, so that the payment can be verified. 

In fact, since all the data concerning bitcoin on-chain payments are public, after the payment is made it is possible for everyone, including the customer, to verify that the transaction has been made, including the date, time and amount. 

Since the manual management of such an organization is not at all easy, plugins already exist for the most popular e-commerce platforms which allow the operator to connect their own bitcoin wallet to their website, in order to automatically provide the customer with a different public address to which to make the payment, for every single order. 

Bitpay or Gourl, for example, offer the possibility to integrate a payment system in e-commerce websites to collect direct payments in various cryptocurrencies, but there are also others. It is sufficient to search for “bitcoin wallet” on websites where you can download the plugins of the various platforms to have a variety of choices. 

A wallet with a seed can have many different public addresses, hence even with a single wallet, it is possible to generate a new address for each new order. 

This system has some advantages and some disadvantages. 

The main advantage is that it does not require intermediaries and therefore does not involve any commission costs for the website operator. In fact, the cost of the transaction is borne exclusively by the paying customer. 

The main disadvantage is that bitcoin is collected and not fiat currency, and if the merchandise sold by the website is purchased in fiat currency, this could generate the need to convert BTC into fiat currency once received. In this case, the website operator will require a second, manual step to move the BTC to an exchange, sell them, collect fiat currency and then move the funds to a bank account, for example.

Third-party gateways 

The second system, on the other hand, involves relying on a third-party payment gateway that takes care of the collection on behalf of the website operator and which can often also allow the operator to collect fiat currency directly. 

In this case too, it is better to use a plugin suitable for the platform in use on the website since manual management is likely to be unfeasible. 

These gateways require the operator itself, and not the operator of the e-commerce website, to manage the collection of BTC. The payment process for the end customer will remain the same, but the bitcoin will be sent to the payment gateway, and not to the operator of the website. 

Coingate or Coinbase Commerce offer this kind of service, though it is sufficient to search for “bitcoin gateways” on websites where you can download plugins from the various platforms in order to have a large range of choice. 

The main advantage for the website operator is that they do not have to manage the collection of BTC, in part because these gateways often allow the automatic exchange of BTC into fiat currency and therefore the direct revenue in fiat currency. In this case, the operator does not have to change anything compared to other fiat currency payment gateways, and can also completely avoid handling bitcoin. 

The main disadvantage is the cost, as the use of these gateways involves costs for the operator of the site, as well as collection fees or an exchange rate spread. 

In other words, part of the collection is somehow transferred to the gateway operator to pay the cost of the service, while with the first solution, i.e. the direct collection of BTC, the operator of the website does not pay any fee. However, it should be borne in mind that the exchange of BTC into fiat currency on an exchange usually involves costs, either as a percentage of the exchange, or in terms of deposits and withdrawals on the exchange. 

As expected, it is not at all difficult to enable payments in bitcoin, or other cryptocurrencies, on an e-commerce website. 

It is enough to use the appropriate tool (usually a plug-in) and it is also possible for the website manager not to change the operation in any way. In addition, the fees involved in using the second solution (the crypto payment gateway) are often lower than using the world’s leading fiat currency payment gateways. ù

Marco Cavicchioli

Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".

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