Bitcoin Payments for Merchants: Complete 2024 Guide
Bitcoin Payments for Merchants: Complete 2024 Guide
Accepting Bitcoin payments can reduce fees, eliminate chargebacks, and open your business to a global customer base. Here’s everything you need to know to start accepting Bitcoin in 2024.
Why Accept Bitcoin Payments?
Lower Fees
Credit card processors charge 2-3% plus fixed fees. Bitcoin payments, especially on Lightning, cost a fraction of a penny.
Example:
- $100 credit card payment: $3 fee
- $100 Lightning payment: <$0.01 fee
- Savings: $2.99+ per transaction
No Chargebacks
Bitcoin transactions are final. No more dealing with fraudulent chargebacks eating into your profits.
Global Reach
Accept payments from anywhere in the world instantly, without international payment processors or currency conversion fees.
Fast Settlement
Lightning payments settle in seconds. On-chain payments confirm in minutes to hours. Compare that to 2-3 business days for credit cards.
On-Chain vs Lightning: Which Should You Use?
On-Chain Payments
Bitcoin’s base layer - transactions recorded directly on the blockchain.
Best for:
- Large purchases ($100+)
- When settlement time isn’t critical
- Maximum security requirements
Pros:
- Settled directly on Bitcoin blockchain
- No additional infrastructure needed
- Works for any amount
Cons:
- 10-60 minute confirmation times
- Higher fees during network congestion
- Not ideal for small purchases
Lightning Payments
Layer 2 protocol for instant, cheap payments.
Best for:
- Small to medium purchases
- Point-of-sale transactions
- Online shopping
- Recurring payments
Pros:
- Near-near-instant settlement (seconds)
- Negligible fees (< 1 sat)
- Perfect for micropayments
- Scales to millions of transactions
Cons:
- Requires Lightning-capable wallet
- Needs online connection
- Emerging technology (but stable)
How to Accept Bitcoin Payments
Option 1: Direct Payments (Best for Self-Custody)
Accept payments directly to your wallet without intermediaries.
Setup:
- Get a Bitcoin wallet (like Bolt21)
- Generate payment addresses or BOLT12 offers
- Display QR codes at checkout
- Receive payments directly
Pros:
- No middleman
- No additional fees
- Complete control
- Maximum privacy
Cons:
- Manual payment verification
- Need to handle Bitcoin-to-fiat conversion yourself
- Requires some technical knowledge
Option 2: Payment Processors
Use a service that handles Bitcoin payments and converts to fiat.
Popular Options:
- BTCPay Server (self-hosted, free, open-source)
- OpenNode
- Strike
- Speed
Pros:
- Automatic conversion to fiat (if desired)
- E-commerce integrations
- Payment verification handled for you
- Support for multiple cryptocurrencies
Cons:
- Processing fees (typically 1%)
- Third-party custody (unless self-hosted)
- May require KYC verification
Option 3: Hybrid Approach
Use BTCPay Server (self-hosted) for full control with merchant features.
Benefits:
- Free and open-source
- Direct payment to your wallet
- E-commerce plugins (WooCommerce, Shopify, etc.)
- Invoice generation
- Point-of-sale app
BOLT12 Offers: The Future of Bitcoin Payments
BOLT12 offers are reusable Lightning payment addresses that never expire.
For Merchants:
- Create one offer, use it forever
- Print it on business cards, menus, receipts
- No invoice management needed
- Customers can pay any amount
Example Use Cases:
- Coffee shop: QR code at register
- Freelancer: Include in email signature
- Online store: Static “Pay with Bitcoin” button
Bolt21 supports BOLT12 offers natively, making it perfect for merchants.
Setting Up Your First Bitcoin Payment
Let’s walk through a simple setup:
Step 1: Get a Wallet
Download Bolt21 (or another Lightning-enabled wallet).
Step 2: Generate a Payment Request
- For on-chain: Generate a new address for each payment
- For Lightning: Create a BOLT12 offer (reusable) or invoice (single-use)
Step 3: Display to Customer
Show a QR code on your:
- Website
- Point-of-sale system
- Invoice/receipt
- Physical signage
Step 4: Wait for Payment
- Lightning: Confirms in seconds
- On-chain: Wait for 1-6 confirmations (10-60 minutes)
Step 5: Fulfill Order
Once payment confirms, complete the transaction.
Best Practices for Bitcoin Merchants
Pricing Strategy
Fixed Bitcoin Amount
- Price items in BTC (e.g., 0.001 BTC)
- Simple for customers
- You bear exchange rate risk
Dynamic Pricing
- Lock in USD/fiat price
- Calculate BTC amount at checkout
- Customer pays exact fiat equivalent
Most merchants use dynamic pricing with a payment processor.
Tax and Accounting
Bitcoin is taxable in most jurisdictions.
Key Points:
- Track the USD value at time of receipt
- Record each transaction for taxes
- Consider automatic accounting integration
- Consult a tax professional familiar with crypto
Security Considerations
- Use a new address for each on-chain payment (privacy & security)
- Keep bulk of funds in cold storage
- Only keep working capital in hot wallet
- Regularly sweep payments to secure storage
Customer Education
Many customers are new to Bitcoin. Help them:
- Display simple instructions at checkout
- Accept both on-chain and Lightning
- Offer customer support for payment issues
- Consider providing a small discount for Bitcoin payments
Common Pitfalls to Avoid
Accepting Unconfirmed Transactions
For on-chain payments, wait for at least 1 confirmation before releasing goods/services. Unconfirmed transactions can be reversed.
Not Accounting for Volatility
If you need to convert to fiat, do it quickly or use automatic conversion to avoid price risk.
Neglecting Privacy
Reusing addresses links all payments together. Use HD wallets that generate new addresses automatically.
Overcomplicating It
Start simple: wallet + QR code. Add sophistication as you grow.
Real-World Success Stories
Coffee Shops
Several Bitcoin-friendly coffee shops report:
- 5-10% of customers pay with Bitcoin
- Average transaction time: <30 seconds with Lightning
- Customer appreciation for the option
Online Businesses
E-commerce sites accepting Bitcoin see:
- Access to international customers without payment processor restrictions
- Reduced payment fraud
- Enthusiastic Bitcoin community support
Service Providers
Freelancers and contractors benefit from:
- No cross-border payment delays
- Lower fees than PayPal/Wire transfers
- Immediate payment settlement
Getting Started Today
Ready to accept Bitcoin payments?
- Download Bolt21 - Simple, self-custodial wallet
- Generate a BOLT12 offer - Works for unlimited payments
- Display the QR code - At checkout or on your website
- Start accepting payments - Instant, low-fee Lightning payments
The future of payments is here. Don’t get left behind.
Related Articles:
Ready to Try Bolt21?
Experience fast, secure Bitcoin payments with our self-custodial Lightning wallet.
iOS Coming Soon
