Businesses Accepting Crypto Payments: 8 Mistakes to Avoid

Given how much you hear about cryptocurrencies in the news, it can be a little surprising to discover that only around 30% of businesses actually accept cryptocurrencies as a form of payment. 

That percentage is growing, however, and with good reason. Crypto payments can offer a wide range of benefits, and even if it doesn’t become a business's primary payment method, there can be a lot of value in integrating crypto into your operations.

The problem? Unlike taking fiat currency payments, which can be set up within a matter of minutes and, due to regulations, are generally secure and stable, cryptocurrency payments can be a little more challenging. In this post, we’ll run through a few common errors that businesses wishing to accept crypto payments must avoid, which will go a long way towards ensuring that this strategy has a positive impact on your business operations. 

Diving Straight In 

As we said above, it can be extremely straightforward for businesses to begin accepting fiat currency payments, in large part because business owners are already familiar with how they work. It’s easy to begin accepting payments via a credit card when you’ve been making payments with a credit card for all of your adult life.

Before accepting cryptocurrency payments, it’s important to take the time to educate yourself on crypto, how it works, and what you need. It’s not about becoming an expert — you don’t need to be — but about being mostly familiar with how this payment method works. 

Accepting Only One Crypto

Businesses can greatly increase the likelihood that their customers will make payments with cryptocurrencies by allowing them to make payments with multiple coins. All too often, businesses only accept Bitcoin, and while that is recommended — it’s the most popular on the planet — it’s also somewhat limiting if you only accept Bitcoin. If you’re going to go through the process of accepting cryptocurrency, then it’s best to make a few available.

As well as Bitcoin, look at accepting Ethereum, Litecoin, and stablecoins such as Tether and USD Coin. In doing so, you’ll make cryptocurrency payments more appealing to a wider range of customers. 

Using the First Crypto Payment Processor You Come Across

You don’t technically need a crypto payment processor to begin accepting crypto payments at your business, but it’s highly recommended. While you can accept payments yourself, having a good payment processor will just make everything easier. It’s only recommended to take the DIY approach if you’re tech-savvy and have enough employees to maintain your system.

So in effect, for most businesses, crypto payment processors are essential. Keep in mind, however, that not all crypto payment processors are created equal. Some charge high fees, others only allow for payments in a couple of cryptocurrencies. Choose one that offers reasonable fees; 0.4% - 0.8% fees are considered excellent; 0.8% - 1.5% is considered good. You’ll also want to check that the processor integrates with the current payment systems you use. 

Failing to Verify Payment

It’s unlikely that a customer would intentionally try to defraud your business, but still, it’s worthwhile making sure that they don’t. All too often, businesses fail to protect themselves by failing to check that not only has the customer’s payment gone through, but that the payment was for the right amount — and it is, of course, much easier to have this information before you send a product or the customer walks out of the store with it in their hands. There are companies that offer a block explorer as a service, which makes it easy to check the status of payments in real-time. Checking a payment is quick and efficient, so be sure to do so every time you receive a crypto payment. 

Accounting Errors

You’ll need to keep a detailed record of any cryptocurrency payments you accept. This is something that catches many business owners out, since they accept the payment, fail to account for it at the time, and then, when it comes to doing admin, find that the coin’s value is different from what it was when they accepted it. While it’s recommended to work with an accountant who has experience with cryptocurrencies, in general, it’s best to record the monetary value of the crypto (as in, it’s equivalent in your local currency) at the time that you accept it. 

Assuming Customers Know How to Pay 

Even people who hold cryptocurrency can be a little confused about how to make payments using the currency. As such, it’s recommended to educate your staff on the simple step-by-step procedure of how to take payments from customers, as well as on common problems that people have when making crypto payments. 

Holding Onto Crypto 

It’s recommended to convert cryptocurrency payments into fiat currency automatically; otherwise, you’ll run the risk of losing out on profit if the cryptocurrency drops in value. The only exception to this is if you’re holding onto crypto for investment purposes, though even in that case, it’s best not to hold all the crypto that you accept. 

Not Figuring Out Refund Policies Beforehand 

Consumers are protected when they make payments with their credit cards. When they make a crypto payment? Not so much. These payments are irreversible, so it’s not a simple process of refunding the customer their cryptocurrency if they decide that they no longer want the product they bought from you.

As such, it’s important to figure out your refund policies before you begin accepting payments, and make sure that your customers are fully aware of what those policies are. There are multiple ways to provide refunds for crypto-payments, including:

• Giving them the value of the refund in fiat currency (such as dollars).

• Paying in crypto, but converting the amount to its current value (avoids risk of losing due to fluctuating costs).

• Giving a straight crypto refund (not recommended, since there’s a high chance that either the business or customer loses out on money).

Whatever you choose, decide before you accept payments. It’ll go a long way towards preventing complications that can damage customer trust in your business.