Bitcoin (BTC), is the original and most popular cryptocurrency. In 2024, it’s market cap reached a total of $2.9 trillion, with individual coins worth more than £60,000 each.
As the popularity of this digital currency has grown, more businesses are starting to accept it as a form of payment. In this article, we’ll look at how to accept Bitcoin payments, and how the BTC price may affect UK businesses.
What Are Bitcoin Payments?
Bitcoin is a type of digital currency known as cryptocurrency. Since it first launched in 2009, it’s become one of the most popular digital assets, with millions of people around the world now using it. Unlike conventional currencies, Bitcoin isn’t controlled by a single organisation or bank, meaning it’s fully decentralised.
The power of Bitcoin lies in its peer-to-peer network. All devices using the Bitcoin network are used to verify transactions, receiving rewards for ensuring the security and validity of the network. There are no middlemen involved in keeping the network running, so costs are less than equivalent money transfer services. This means users can send money anywhere in the world with little hassle and at low cost.
Although Bitcoin and other cryptocurrencies are now seen as an investment and store of value, they’re also used for transferring funds. To send and receive funds, users simply use a wallet address, and the money typically arrives within a few minutes. Businesses are beginning to utilise Bitcoin for receiving payments as it grows in popularity.
Advantages and Disadvantages of Bitcoin Payments
Advantages
- Fewer transaction fees and much lower processing fees
- No risk of chargebacks that can cause considerable issues to small businesses
- Makes international payments simpler allowing businesses to sell to more markets
- Some consumers prefer to use Bitcoin
- Holding Bitcoin can be an investment opportunity
Disadvantages
- Not widely used in the UK yet
- Network congestion can lead to longer transaction times
- There’s no protection against fraud
- Business owners need to keep up with regulations
- There’s no merchant support to provide advice
- Some accountants may not be familiar with the rules on crypto payments
How UK Businesses Can Accept Bitcoin
The latest estimates say there are around 2.3 million cryptocurrency users in the UK, and this number is growing every year. While it’s still a relatively small percentage of the total population, many companies are keen to get in on the Bitcoin payment revolution. Some now accept payments made using cryptocurrency both online and in person.
Many companies offer Bitcoin payment processing services, which make sending and receiving payments in cryptocurrency simple for businesses. These include trusted exchanges such as Coinbase and BitPay, as well as the world’s most popular e-wallet, PayPal.
Before businesses can accept Bitcoin, it’s important to understand the local regulations and ensure they keep up to date with any changes. The FCA currently warns that crypto investments are risky, but purchasing and using crypto is completely legal in the UK. Make sure you consider the fact that exchanging cryptocurrency for fiat is a taxable event.
After familiarising themselves with local regulations and taxation laws, business owners simply need to set up a business wallet or gateway before integrating this with the checkout process. Consumers making a purchase and paying using Bitcoin will be sent a QR code, which they can then use to send coins from their wallets.
Many crypto payment gateways can be integrated with accounting software too, ensuring that every sale is recorded for tax purposes. Accountants are receiving more education on cryptocurrency and the tax implications, but if a business is heavily involved in crypto it might be better to hire a specialised accountant.
