BitCoin system is gradually making its way into the world of E-Commerce recruiting more and more merchants all over the world for using its digital currency. Some e-commerce websites already accept bitcoins as a payment for goods and services and admit that dealing with decentralized digital money has much more benefits if compared to standard payment methods. Although there is a limited amount of bitcoins (about 12,3 million units) and the currency stability and acceptance depends on this amount, BitCoin is likely to become mainstream due to the increased use by consumers. This is a great opportunity for e-commerce merchants to adapt new payment technologies for boosting their performance on the market. Here you’ll find out more about BitCoin and its exclusive currency and investigate how to successfully integrate your e-commerce website into bitcoin payment technology with the help of useful bitcoin payment processors.
BitCoin is the largest and one of the first global digital payment systems that was first introduced by Satoshi Nakamoto in 2009. The system is primarily famous for its peer-to-peer mechanics, which means that users can transfer their digital money to each other without any secondary interference. All the transactions undergo network nodes verification and then are recorded in a public distributed database which is called the block chain. Another peculiarity of the system is that it has no central repository or administrator, so that it’s basically impossible to have the currency stored in one particular place. Here people deal with a special digital currency (or cryptocurrency) called bitcoin, and it’s considered to be the largest decentralized digital currency. This also means that mining, as well as transaction procedures, can be performed anonymously without any specific identity verification, which makes it even more appealing for global market.
Bitcoins can be earned as a reward for sharing a processing power of your computer with the system. In fact, your computer takes part in verifying and recording payments into the public ledger. The process of earning bitcoins is called mining. All the bitcoins users receive are either newly generated or obtained in result of peer-to-peer transactions as an optional service fee. However, it’s possible to earn bitcoins in exchange for other currencies (real or digital), products and services.
Who owns it
A user can spend his bitcoins by transferring them to a specific address. This operation, though, can only be done once, as all the information about transactions is recorded in the block chain. To complete a transaction, you must digitally sign it by using corresponding private key – this is made to prevent any unapproved transaction from other members of the system. A separate mining network can have its own public key which performs the same function but on the more public level. If the private key is lost, the transaction is said to be cancelled, but bitcoins are lost for both sender and receiver as well.
Online and offline acquisition
It is possible to perform transactions online through BitCoin system itself and in real life. The latter is considered to be more reliable, though, because the risks to fail an exchange are much lower than if using an online bitcoin exchange. Offline, people can exchange bitcoins in person or through bitcoin ATM.
The price of bitcoins
Due to its nature, the price of bitcoins cannot be held fixed artificially, which makes the currency rather unstable. Thus, during 2011, the price for one bitcoin rose from US$0.30 to US$32 and then dropped to US$2 in the same year. The next highest price was reached in the spring of 2013 when it cost US$266 for a bitcoin; then it immediately crashed to US$50 and by the end of the year increased again to US$1,242 – now beating all the possible records. The year 2014 saw a sharp fall again to US$600 until in January 2015 bitcoin ended up with US$224 for a unit. By now there hasn’t been any sharp rise or fall, and the average price is almost the same.
BitCoin on the market
Since BitCoin was first introduced, it has become commonly used for products and services payment. Merchants often prefer to accept bitcoins because of sufficiently lower fees if compared to standard credit card fees. However, although cryptocurrency becomes more and more popular on the market, retail transactions remain pretty rare due to the fact that it is customers, not vendors, who pay the fees now. Nevertheless, by the year 2015 the number of merchants accepting bitcoin payments exceeded 100,000. Among the e-commerce websites participating in the BitCoin system there are Expedia, Microsoft, Time Inc., Overstock.com, Dell, Zynga, and Atomic Mall.
There are cases, however, when customers want to return previously purchased goods. Because bitcoin currency is subject to changing in price in an unpredictable rate, some precautions must be made by retailers to save their revenues. Most retailers offer in-store credit for their customers, which means that if an item was purchased for 1 BTC when it cost $1000, a retailer will refund $1000 even though a bitcoin price can increase to $1500 by that time. Unfortunately, the same scheme is applied to cases, when the price for a bitcoin falls to $500. It’s safer then to provide refunds in US dollars rather than bitcoins because real currency seems to be more stable in its price.
So what bitcoin payment ability gives to e-commerce companies?
No fees for transactions. Unlike credit card payment method, dealing with BitCoin requires no extra fees from a vendor. There is no third party involved in transactions neither, so all the money goes directly to your BitCoin wallet. Finally, you don’t have to worry about customers’ reliability – as long as you received the money, you can instantly ship the goods.
Simple to integrate the system into your website. There are companies like Coinbase and BitPay which specialize in providing ecommerce retailers with BitCoin related services. For instance, they can easily transfer bitcoins you receive from the customers to US dollars for quite a decent fee.
BitCoin covers the whole world, which makes this unified currency handy when dealing with international customers.
The profits of anonymity. In the years of widespread digital theft it becomes more and more reasonable to keep your identity away from the Internet. BitCoin allows users to keep their privacy, which makes the system even more valuable.
Because BitCoin currency has become popular just recently, it wasn’t clear till this very moment whether this system is worth of dealing with on serious bases.
At first, retailers could not let themselves take a risk of introducing a new payment technology because they knew too little about its mechanics and implementation. There was also no evident proof of the system being successful throughout the long period. Only after such giants as PayPal and Microsoft made a first step towards the system did other companies become more confident of this issue.
Merchants also had enough time to think of the cons and pros of BitCoin to consider the best way to introduce the system with their e-commerce websites. Moreover, with appearance of experienced experts in the sphere of digital currency, it’s now much safer to get involved with the trend.
Another important issue is that the more competitors there are in BitCoin payment technology, the more reasonable it is to do the same. It’s also worth mentioning that last year’s Black Friday and Cyber Monday showed that around $300 million bitcoins were spent by consumers all over the world. Taking into account this number, you can easily predict the possible boost in revenues you can gain after starting BitCoin paymenttechnology on your website.
Finally, let’s try to predict the farther future of E-Commerce and its cooperation with BitCoin. It’s highly probable that Bitcoin growing acceptance will soon convert it into standard and primary payment method. This will also lead to the currency stabilization, as its price becomes more and more connected to the costs of goods. As for the governments, still not all of them approve of BitCoin, but Bitcoin processors such as Bitnet are always ready for negations to legalize the currency for being fully accepted on the global market.
ThisWP plugin (GoUrl WP eCommerce) allows you to accept bitcoins on your e-commerce website. The plugin requires WP e-Commerce 3.7.7 or greater and WordPress 3.0 or greater. The main limitation of the plugin is that Bitcoin is supposed to be the only currency being accepted by the website.
GoUrl WP eCommerce
Main features of the plugin:
Creates a unique bitcoin address for each order
Has a configurable timeout after which an unpaid transaction is cancelled automatically
Has a configurable number of BitCoin confirmations after which an order is considered paid
Provides customers with a unique order payment address which is sent to them at every checkout and by e-mail
Log into your WordPress installation as an administrator
Install WP E-Commerce via WordPress dashboard: Plugins > Add New
Transfer the distribution archive contents to the wp-content/plugins/wp-e-commerce directory of your WordPress installation
BitCoin WooCommerce plugin was created on the basis of a bigger WooCommerce plugin, which means that it’s not intergrated into WordPress directly. The plugin combines easily manageable settings and functional flexibility.
Bitcoin Payments for WooCommerce
Provides automatic calculations of BitCoin exchange rate by using major BitCoin exchanges
Provides secure transactions as it’s powered by official BitCoin wallet service blockchain.info
Supports 16 other popular currencies which can be set up as main store currency
The main purpose of BitCoin payment services is to make it easy for both a merchant and a customer to implement payments by using BitCoin payment method. There is a range of BitCoin services each of them having its pros and cons.
BitPay is a famous BitCoin payment processor which allows merchants to accept BitCoins as an alternative payment method from their customers. If your website has a shopping cart, then customers will be able to check out their order right away. If you don’t have an online shopping cart, you can create one on BitPay, which means that during a check-out a customer will be redirected to BitPay page where the chosen item will be stored.
The processor provides customers with an invoice which can be used for 15 minutes afterwards to complete the payment; otherwise, the invoice will be expired. The payment time is only 15 minutes, because BitCoin currency is subject to significant changes in its exchange rate which can take place during hours and even minutes. That’s why if the payment is fulfilled after the time has expired, a customer can be asked for an additional payment to cover the possible differences in the exchange rate.
The service requires a 0.99% fee of the value of the order. If you want to instantly convert bitcoins into dollars, BitPay can exchange it and send it right to your deposit bank account.
CryptoPay is a UK version BitCoin gateway which aims at helping British and European enterprises to find their way into integrating with BitCoin system. With the help of CryptoPay it’s possible to convert all the incoming payments to more stable currencies to prevent the potential drop of bitcoin exchange rate. The company charges retailers a 1% fee for their services, but this is still more appealing due to the fact that with CryptoPay you can withdraw any sum of money beginning with £10 while in BitPay the minimal amount for withdrawal is £1000.
The company allows buying, sending, and keeping users’ bitcoins online with a possibility of connecting a wallet to U.S. based bank account. You can purchase bitcoins by transferring money from the bank deposit to your wallet. The earned bitcoins are usually delivered to the user’s account in 2-3 business days after placing an order. Coinbase has also a feature pretty similar to that of Paypal in a way that bitcoins can be sent either to existing Coinbase account or to an e-mail address. The main agvantage of thу gateway is that it has no fees forether sending, receiving or keeping bitcoins. However, if you want to transfer bitcoins to your bank account, the fee amout is fixed: 1% of a sum + $0.15.
GoCoin is an open-source service which is written in Golang language. Originally it was created for private purposes, but in 2014 the public release was announced. This online service is very different from other BitCoin gateways in terms of its architecture. Thus, the core of the system is a library which provides the block chain protocol parser. In addition, the online client exists separately from the wallet application which is meant to run only by the user’s inquiry. There is also a set of useful applications in GoCoin that can verify the validity of a Bitcoin signature or calculate type-2 bitcoin addresses without actual access to a wallet.
This is a quite new BitCoin processor headquarterd in the Isle of Man. The company attempts to keep itself competitive by claiming only 1% fees from their clients’ transactions. It also offers exchange rates based on such major exchange platforms as Bitstamp and Kraken.
It is another BitCoin payment processor which is fully open-source to promote further improvement of the system by initiative developers. As well as BitPay, Gourl allows to sell online goods (music, images etc.) with the help of their system by using Gourl Monetizer Online service. However, this service is more popular among average users that would like to boost their bitcoin income. Thus, users can create their own URL inside of the platform and set up bitcoin price for the items they offer to buy. There is no monthly fee for this membership, but each transaction is worth 3.5% fee.
As for the merchants, there is a range of handy tools to simplify the payment procedures on their websites.
It’s a payment processing system that actively uses so called multisignature technology which is considered to be the safest type of BitCoin currency keeping. All the valuable information that’s been created during the transaction fulfillment is instantly removed from the database as soon as it’s proved successful. The platform is created in such a way that in case of the system’s failure all the users’ finds are going to be safe.
One more important BitCoin payment system with small transaction fees and flexible intrerface. The system supports multiple currencies apart from bitcoins and allows users to send money on the basis of their location and local currency. Asmoney requires no fees for bitcoin transactions and only 0.5% fee for transactions with other currencies.
Shopify BitCoin payments
If your website is based on Shopify, you can manage BitCoin payment method right through ShopifyPayment settings. On the Payments Settings page you can add all the desired payment options for your store including BitCoinpayment method. After enabling the method, the BitCoin button will appear on your website page each time a customer chooses to check out the order.
Shopify supports two main BitCoin gateways:
The Shopify official manual page provides a quick guide for integrating with bitcoin payment methods by enabling Coinbase and BitPay gateways in your Shopify Payment settings.
Accepting BitCoin payments with Magento
Here’s a list of useful solutions for those who are working with Magento platform and still want to start accepting BitCoin payment method.
Coinzone Magento plugin – a plugin developed exclusively for Magento users to have an opportunity to provide their websites with bitcoin payment options supported by Coinzonebitcoin payment processor.
BitPay extension for Magento – this extension allows Magento users to join the biggest Bitcoin payment system to get the best from digital money experience.
BitCoin gateways also provide their instant electronic payment services for businesses involved into BigCommerce, as this platform contains over 40,000 participants all over the world.
BitCoin Payment Solutions support for BigCommerce
With the growing expansion of cryptocurrency on the market, e-commerce merchants try to find the best sources of introducing acceptance of bitcoins on their websites. Thus, BIPSgateway is ready to support BigCommerce members hoping for the further rise of BTC economy. Merchants can use BIPS for accepting bitcoins from their customers byentering an API key into their BigCommerce configuration settings. As always, it’s possible to customize the elements of the bitcoin payment method by configuring transaction management, invoice activation etc.
Chainpay bitcoin gateway also offers its services for BigCommerce entrepreneurs managing all BitCoin related procedures and requiring no specific knowledge of cryptocurrency from their clients. Chainpay only demands 1% fee from each transaction, which makes it possible for businesses to concentrate more on advertising campaign and their retails’ expansion.
The detailed manual for activating bitcoin payment method with ChainPay can be found here.