My Experience with Adding Bitcoin Payment to My Website
A few months ago, while redesigning my online store, I decided the timing was good to add bitcoin payment option. Cryptocurrency has long been a hype and I was attracted by its promise of low transaction fees and marketing potential. New to the crypto world, I saw it as an opportunity to learn and become an active member of the community. My website is an online store for curated wall art and designer lighting and a segment of its target is likely a subset of the cryptocurrency crowd.
Adding Bitcoin payment to the online store
This has been a straightforward process. I weighed in the pros and cons of adding direct payment with cryptocurrency vs. using a 3rd party service like BitPay or CryptoPay. The service provider does all the processing and sends funds directly to my bank account or Bitcoin address. Furthermore, they protect my business against that volatility of the cryptocurrencies by exchanging the bitcoins for the cash value of the order as it happens. I decided I didn’t want to deal with the accounting complications that can potentially arise from accepting direct payment with cryptocurrency, so I went for the payment provider and I chose bitpay mostly because of a friend’s recommendation. They have an out-of-the-box integration with many eCommerce solutions and integrating it with WordPress eCommerce was smooth and easy.
First payment with bitcoins
We did a live test and while the process worked fine, the customer was charged 15€ for payment and mining fees, for a product that might have costed 20€ or even less. A few days later I paid 5$ in fees for a 6$ subscription for spendabit — a search engine for things you can buy with bitcoin. Small businesses will often have small deals size and transaction fees can be critical for the buyers’ decision to use bitcoin for payment or not.
Why are Bitcoin payment fees so high today?
The high transaction costs today are due to the high price volatility of bitcoin and the high volume of transactions which compete with each other to be processed within a limited size block. Тhe block size in bitcoin is currently 1 MB and there are many transactions which fight to get in the next block. Moreover, a software upgrade that is supposed to alleviate the situation — SegWit — has not been implemented widely yet.
Today one of the major cryptocurrency promises — low transaction fees, doesn’t exactly hold true. Bitcoins currently perform the function of “store of value” than “means of exchange”. The Bitcoin network currently mainly provides an unique asset — digital gold, and is not so much a “payment network”. Off-chain solutions are going to improve this situation in the future. For now, Bitcoin Cash could prove to be a viable alternative for small-sized payments.
How is this controversy resolved?
When an innovative technology is making its way, the early adopters are more likely to experience its imperfections than the users of the technology after it has hit mainstream. It’s fixing the imperfections that makes the technology better and helping it carve its way to mass adoption. Yes, transaction costs for Bitcoin payments can be high for small deals’ size and revenue from this channel can be slow. Yet, I see no reasons for my small business not to accept cryptocurrency payments.
