Since Bitcoin's debut in 2009, cryptocurrency ownership, usage, and valuation have continued to soar, gradually making it one of the mainstream payment methods.
About 46 million consumers, or 18% of the adult population in the US, would consider making retail purchases using crypto, representing roughly 1% of retail sales.
With such numbers, you should consider accepting crypto payments for your business to reel in such potential buyers while also keeping up with current trends.
If you run a Shopify eCommerce store, the platform accepts this payment method. Not sure how to integrate it into your store? Here's all you need to know about Shopify cryptocurrency payments and how to set up the system.
Why Accept Cryptocurrency Payments
Crypto payments not only give you an alternative payment method, but they afford you the following benefits.
Broader Market Access
Unlike the traditional payment methods, no jurisdiction or borders confine cryptocurrencies, which means lesser restrictions.
Therefore, you can receive payments from anyone, anywhere globally. Even citizens from sanctioned countries can purchase from your store because you don't require a financial intermediary.
This access opens up your business to a broader market, leading to higher sales volumes and more cash flow.
Quick Transactions
Some traditional online payment methods can take up to five working days for the money to hit your bank account.
It can be frustrating if the week has many holidays because this will cause delays and affect your business's cash flow.
However, crypto payment processing is instant, eliminating the cash flow issues that severely affect small businesses.
Zero Chargebacks
Reversed transactions are possible when using credit cards. The cardholder can initiate the process, leading to losses in revenue.
But with crypto payments, only you as the merchant can reverse the transaction, eliminating the online fraud associated with credit cards.
Low Processing Fees
Crypto payment processing is not free but is cheaper than traditional payment methods because there are no intermediary financial institutions to verify the transactions.
You will only incur a gas fee charged by the blockchain and payment processor you use to finalize the transaction.
The lower processing fees leave you with more profit to invest back into your business.
Payment Conversion to Fiat Currency
If you need fiat currency to pay your suppliers, employees, etc., it is easy to convert cryptocurrencies into USD, GBP, CAD, etc.
Cryptocurrency Payment Providers
Shopify payments currently do not accept crypto payments, so you need to use third-party providers, which include the following.
Coinbase Commerce
Coinbase is the largest crypto exchange company in the US by trading volume. It is available in over 100 countries and accepts various cryptocurrencies, such as Bitcoin, Litecoin, Bitcoin Cash, Ethereum, Ethereum Classic, and Stablecoins (DAI & USDC).
The provider charges a 1% transaction fee on all payments, but conversion & settlement to fiat currencies is free. Conversion of Stablecoin into Coinbase wallets or any other crypto wallet is also free.
Other advantages of Coinbase include custom checkout design and invoice/bill generation.
BitPay
Like Coinbase, BitPay charges a 1% transaction fee, and there are no hidden charges or monthly limits.
The platform supports most major crypto wallets, including Trust Wallet, Metamask, Exodus, etc. Additionally, it allows direct bank deposits in fiat currency with no price volatility.
BitPay accepts Bitcoin, Ethereum, BUSD, XRP, GUSD, etc.
CoinPayments.net
CoinPayments accepts payments from over 2000 cryptocurrencies, covering almost every major one in the market. Another advantage is that it charges half the transaction fees of the other two (0.5%), leaving you with higher profits.
The platform provides a multicurrency wallet to keep all the crypto payments in one place, and you can settle in Stablecoin directly using the auto-conversion and auto-forward features.
As a merchant, you will benefit from the invoice builder, POS interface, donation buttons, and custom payment buttons when using CoinPayments.
Others
Apart from the three primary providers, you can also use the following:
OpenNode
OpenNode is a Bitcoin-only payment provider that enables your eCommerce store to accept the crypto via APIs, plugins, payment buttons, and hosted checkouts.
It is the best platform if you want Bitcoin payments only because it operates through the Lighting Network, which delivers faster, low-cost, scalable Bitcoin transactions.
OpenNode only charges a 1% transaction fee. There are no conversion fees, and you can convert your Bitcoins into fiat currencies, settling them instantly into your bank account or Bitcoin wallet.
NOWPayments
NOWPayments is one of the cheapest crypto payment providers because their transaction fees start from as low as 0.4%. It accepts over 100 cryptocurrencies, including the most popular ones like Bitcoin and Ethereum.
The platform also accepts two-way conversion, where you can charge customers in fiat then get pain in crypto and the other way around.
Couple this with a premium account manager providing 24/7 support, and you can expect a positive user experience, especially when setting up and getting accustomed to the platform.
Binance Pay
Binance Pay is a product of Binance, the largest crypto exchange company in the world by daily trading volume.
The company has two native cryptocurrencies, BNB (Binance Coin) and BSC (Binance Smart Chain), plus the Stablecoin BUSD.
You can integrate the platform with your online store via APIs or accept payments using the checkout pages, payment links, QR code, and the Binance Pay ID.
Setting Up Shopify Cryptocurrency Payments
Setting up crypto payments requires almost similar steps for all the providers, and here's how to include the three primary ones in your store.
How To Accept Crypto Payments Using Coinbase Commerce
The process involves three steps.
Step 1: Sign Up
Follow the sign-up instructions to create a Coinbase account. After that, verify your email address and add a 2-step verification process. There are two sign-up options, so pick the one that works for you.
Step 2: Create an API Key
Next, create the API key to connect your Shopify store to the Coinbase account you just created. To do this, go to settings on the navigation menu.
Click on the API keys section to create a new API key.
Remember to keep this key secret because it gives programmatic access to your account and can be dangerous in the wrong hands.
Step 3: Link Coinbase to your Shopify Store
The last step is to add Coinbase to your Shopify store and activate it as an alternative payment method.
Doing so will redirect your customers to the platform at checkout to pay in the respective cryptocurrency.
Begin by going to settings > payments in your Shopify account, and click on Add Payment Methods under Supported Payment Methods. You can search by the payment methods or provider.
Enter the email address you used to create the Coinbase account and paste the API key in the section below to activate the payment method.
Integration complete! Your customers can check out and pay with the cryptocurrencies that Coinbase supports.
How To Accept Crypto Payments Using BitPay
BitPay also uses an API token to create a link between the platform and your account.
Step 1: Create API Token
Create a business account on BitPay, enter the required details, and follow the steps to complete the process.
Step 2: Link the Two Accounts
Log in to your Shopify account and go to settings > payments > supported payment methods > add payment methods. Search for BitPay.
Step 3: Activate BitPay
Click on activate and enter the API key ID you got after creating your BitPay account.
Activate BitPay, and that's it!
How To Accept Crypto Payments Using CoinPayments.net
CoinPayments is a bit different. Instead of using an API key, the platform integrates with your Shopify account using your merchant ID and IPN secret.
Step 1: Create a CoinPayments Account
Start by creating a business account on the payment provider.
Step 2: Get the Required Details
After creating the account, go to account > account settings > basic settings. The first setting will show you your merchant ID. Save this key.
Next, go to account > account settings > merchant settings, and you'll get your IPN secret in the first menu setting. Create the IPN secret key and save it.
Step 3: Link with Shopify
Log into your Shopify store and go to settings > payments > supported payment methods > add payment methods.
Search for CoinPayments and click on activate.
Enter the merchant ID and IPN secret key that you had saved earlier.
Activate the payment method, and that's it!
Which Cryptocurrencies Do These Payment Providers Support?
Even though these cryptocurrency payment providers handle multiple currencies, some even in the thousands, they only accept a few of them in Shopify.
It is important to note that at the time of writing this article, Coinbase Commerce was not available in Shopify.
Therefore, considering BitPay and CoinPayments.net, you can accept four cryptocurrency payments. BitPay accepts Bitcoin only.
But CoinPayments.net accepts Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.
What To Consider When Deciding Which Cryptocurrency to Use to Accept Payments
As of March 2022, there are over 18,000 cryptocurrencies, but not all of them compete at the same level. Therefore, when choosing which one to use for accepting payments, you need to consider the following factors.
The Popularity of the Cryptocurrency
You can only accept specific crypto payments if your customers own and transact with them. Therefore, you need to pick a payment provider that handles all the commonly used cryptocurrencies to target more customers.
Transaction Speed
Each cryptocurrency has a specific TPS (Transaction Processing Speed), and the faster it is, the faster the order processing will occur.
Always go for fast processing cryptocurrencies so that your customers experience quick checkout times.
Transaction Fees
Merchants always transfer the costs to the customers, including the transaction fees.
Even if you choose to bear these fees, they will eat into your profits, and you will increase prices at some point.
Therefore, you should pick cryptocurrencies and providers that charge low gas fees to keep your operational costs as low as possible to remain competitive.
Compatibility with your Wallet
You'll need a place to store the cryptocurrencies after receiving them as payment. Thus, only accept currencies that are compatible with your crypto wallet.
Volatility
Some cryptocurrencies are highly volatile and can lose a lot of value overnight.
This phenomenon is common with small market cap cryptocurrencies and can lead to massive losses in your business.
Therefore, you should always pick those with the largest market capitalization.
Popularly Used and Accepted Cryptocurrencies
After going through the considerations above, you should accept at least one of these currencies as payment for merchandise in your Shopify store.
Bitcoin (BTC)
Bitcoin is the godfather of cryptocurrencies because it is the pioneer digital currency. It is the most popular and has the highest market capitalization of slightly above $865 billion.
However, the currency has one main disadvantage. It provides slow transaction processing times of about 4.6 per second. To put it into perspective, Visa processes 1,700 transactions per second.
Crypto TPS is usually low, but Bitcoin is right at the bottom, although the lightning network makes it a bit efficient (about seven TPS).
Regardless, it is still the most popular digital currency, and most crypto owners will have some of it in their wallets.
Ethereum (ETH)
The first Bitcoin alternative is usually Ethereum because it has the second-highest market capitalization (slightly over $403 billion).
It came into existence in 2013, and the blockchain has a faster transaction processing time of about 10 per second (double).
Dogecoin (DOGE)
Dogecoin also came into existence in 2013 and is known as the first dog or meme coin because it bases its origins on a popular Shiba Inu dog meme.
It has a market cap of over $18 billion and processes about 33 transactions per second, making it significantly faster than Bitcoin.
If you follow billionaire Elon Musk's Twitter handle, you will realize that Dogecoin is one of his favorite cryptocurrencies.
Litecoin (LTC)
Once referred to as the silver to Bitcoin's gold, this peer-to-peer cryptocurrency is a lite version of Bitcoin and was an early spinoff that started transacting in Oct 2011.
Its original intention was to provide a higher TPS to deliver better performance, and it reduced the block time to 2.5 minutes. Therefore, it is capable of processing 56 transactions each second.
Currently, the cryptocurrency has a market cap of over $8.6 billion.
Bitcoin Cash (BCH)
Bitcoin Cash is one of the most successful hard forks of Bitcoin, and it began operating in 2017.
The main issue behind its split from Bitcoin was scalability. BCH increased the block size from one to eight megabytes, then later to 32MB.
Larger block sizes can hold more transactions, which allows the network to process more per second.
As a result, the blockchain can handle up to 300 transactions per second, which is quite impressive compared to the rest.
However, the currency has a relatively low market capitalization, hitting slightly over $7 billion.
Conclusion
In summary, cryptocurrency payments might be relatively new, but they are picking up as the world demands less controlled currencies by states and governments.
Cryptocurrency offers decentralized, borderless transactions, enabling merchants to reach a global audience without currency conversion issues.
Crypto transactions often have lower fees than traditional gateways, increasing business profits. On top of that, blockchain technology reduces fraud and eliminates the chargeback risk factor.
For Shopify store owners, third-party crypto payment providers offer easy-to-use plugins, facilitating quick setup and access to the expanding crypto market.
By leveraging Shopify cryptocurrency payments, merchants can efficiently tap into a rapidly growing market segment and ride the wave.
Follow the steps described above, and you will be good to go.
