5 Reasons Businesses Need a Bitcoin Merchant Account
In the last few years, the popularity of bitcoin has soared with companies and businesses all over the world as an emerging form of payment for goods and services. Accept Cryptocurrency payments at competitive rates and convert your cryptocurrency funds into fiat currency with a bitcoin merchant account.
A major reason why the number of people turning to this digital currency has steadily grown is that bitcoin transactions are safe and super-fast.
This secure payments trend has not gone unnoticed, with popular companies like Microsoft, PayPal, Amazon, Overstock, Namecheap, Wikipedia, BMW, AT&T, and Etsy accepting that this universal cryptocurrency has come to stay.
Microsoft was one of the first companies in the tech industry to accept cryptocurrency accounts and endorse bitcoin as an authorized payment method.
As far back as 2014, it was possible to add bitcoins to a Microsoft account and buy anything from games in Xbox stores to Windows licenses.
According to a 2020 Fundera research, many businesses across the world have officially accepted bitcoin as a means of payment.
The same research reports that thousands of U.S. businesses have followed suit with accepting cryptocurrency payments after initially showing skepticism that cryptocurrency, in general, would not be around for long.
In February 2021, Tesla invested $1.5 billion in bitcoin which signified a roaring stamp of approval from CEO Elon Musk that digital currency was the future.
Bitcoin is the most expensive cryptocurrency with over 18.6 million bitcoins in circulation.
It stands as the most popular virtual currency too, because it can be accessed via 14,915 bitcoin ATMs available worldwide.
If you own a business and don’t think you need to accept cryptocurrency or have a bitcoin merchant account, here are 5 reasons why you should change your mind right now.
5 Reasons You Should Open a Cryptocurrency Merchant Account
Very Low Transaction Fees: Bitcoin merchant account transaction fees are significantly lower than debit and credit card transaction fees.
The ugly truth is that small businesses pay higher card fees for their merchant services than big enterprise-level businesses like Walmart and Best Buy.
These big businesses, with ever-increasing sales, generate enormous amounts of dollar volume and can afford to negotiate lower card transaction fees.
Small businesses cannot afford this luxury and are usually charged anywhere from 2-4% when accepting credit cards and debit cards.
This does not include factoring in the additional “hidden fees” that might not be disclosed until business owners get to see their first credit card processing statement.
Cryptocurrency exchanges like Coinbase, offering bitcoin merchant accounts charge just 1% for every transaction. This means if a customer makes a purchase of $1 in bitcoin, you are only billed a penny for payment processing.
Other payment processors go a different route and do not charge transaction fees. Instead, their customers pay for a monthly subscription to utilize all their cryptocurrency merchant account services.
In addition, unlike most credit card companies, exchanges do not charge fees to set up or terminate accounts.
Zero Chargebacks: Another reason why you need a cryptocurrency is that transactions are conclusive. This reason alone makes it very attractive to merchants seeking a high-risk merchant account and a secure payment gateway.
Unlike card payments that are ridden through disputes and chargebacks, there are no forced returns to worry about with this virtual currency unless a bitcoin merchant decides to reverse the transaction.
With credit card chargebacks, a merchant does not only pay for the reversed transaction, the merchant is also slapped with a penalty fee usually between $5 and $25.
While chargebacks give an advantage to cardholders, bitcoin transactions put power in the hands of merchants.
Fraud Prevention: People who pay merchants in bitcoin enjoy a level of identity theft protection that credit cards do not offer.
Bitcoin is a virtual currency. The people that use it cannot be traced because they do not reveal personal information about themselves like names, home addresses, or billing addresses.
In most cases, there is no personal information that can be connected to this cryptocurrency.
However, it is important to note that some bitcoin exchanges collect the personal information of customers in accordance with state and federal laws.
Speed: Small businesses need quick and easy access to cash in order to run their operations effectively.
Bitcoin payments are done instantly. While credit card payments can be locked for over 2 weeks or held indefinitely because a customer disputes a transaction.
Bitcoin transactions travel at the speed of sending a simple email. When a customer pays in bitcoin, the merchant can receive and convert it to a physical currency with an exchanger immediately.
When the money is sent to the merchant’s bank account, it is usually available within 2 business days.
Service More Customers: Bitcoin transactions use blockchain technology. These transactions cannot be controlled by geographical borders, financial institutions, or governments.
A shopper in Nigeria can pay for something in Italy, without having to convert the naira to the Euro.
The transaction is lighting up quickly without the need to share any personal information for it to scale through.
A bitcoin merchant account allows small business owners and online retailers to sell their products and services internationally without having to worry about costly cross-border transaction fees.
Applying for Crypto Merchant Services
A big challenge processing companies, acquiring banks, and payment solutions providers have when trying to open cryptocurrency merchant accounts for merchants is money laundering.
If you are thinking of opening a bitcoin merchant account, be prepared to prove your good intentions. You also need to be patient with the lengthy verification process.
For the application to scale through quickly, you need to provide a detailed explanation of how you plan to prevent money laundering and other illegal activities.
Documents Occasionally Required for a Bitcoin Merchant Account
- Payment processing transaction history
- Certificate of incorporation
- Valid ID copies of owners and company directors
- Documents displaying company jurisdiction of owners and company directors
- Rental Agreement/Bank Statements/Utility Bills confirming company location
Website Requirements for a Cryptocurrency Merchant Account
- Terms and Conditions Page
- Company name in the footer
- Refund and deposit policy page
- Payment method logos (e.g., Visa, MasterCard, etc.)
- Contact button displaying phone number and email
How Long Does it Take to Open a Bitcoin Merchant Account?
Approvals for bitcoin merchant accounts take at least 5 business days to sort out.
Some cryptocurrency merchant accounts take longer to open because approvals hinge on several key factors, including:
- Type of industry (low or high risk)
- Acquiring and/or deposit bank matched to the business
- Merchant’s transaction processing history
- Projected sales volume
Threats to the Credit Card Industry
Bitcoin continues to be hounded by regulatory and monetary authorities across the world.
Countries like Japan and the EU have embraced bitcoin and other cryptocurrencies and allowed exchanges to operate legally.
Other countries like China are making it difficult for cryptocurrencies to thrive in their nations.
Bitcoin was launched in 2009 and continues to grow in profit and popularity. This is proof that it is universally accepted by a growing number of people willing to use it for day-to-day transactions. Apply below for a bitcoin merchant account or give us a call at 800-419-1772 to answer any additional questions you may have regarding Cryptocurrency payments in general.