How to Accept Bitcoin Payments for a Business in Australia
Merchants around the world are beginning to accept cryptocurrencies as a payment method. While major cryptocurrencies are not yet a fully mainstream method of value transfer, a growing number of retailers, ecommerce platforms, and businesses are choosing to accept various cryptocurrencies in exchange for goods and services.
Microsoft, Tesla, Wordpress, and many more major international business now accept cryptocurrency, taking advantage of the wide range of benefits offered by alternative payment methods. The recent stabilization of cryptocurrency values has made cryptocurrency acceptance viable to businesses, allowing them to access an entirely new and growing demographic — cryptocurrency holders and investors.
Getting started with accepting cryptocurrency as a business in Australia, however, can be complicated. There are a number of factors to consider, such as when and how to convert generated cryptocurrency into fiat currency, and the tax implications of cryptocurrency acceptance. In this article, we’ll outline the benefits and methodology of accepting Bitcoin as a business in Australia, and highlight a number of platforms that offer cryptocurrency merchant services.
Why Accept Cryptocurrencies?
The immutable and decentralized nature of cryptocurrencies hold a number of advantages over fiat currency for business operators. Accepting cryptocurrencies as a payment method delivers five key benefits:
- Eliminate Chargeback Fraud Risks: Chargeback fraud is a serious issue in the ecommerce industry, resulting in the loss of over $25 billion annually. Recent statistics show that chargeback fraud increases at a rate of 41% every two years — cryptocurrency transactions, however, are immutable, and immune to chargeback fraud.
- Low Transaction Costs: Complex credit card payment fees can cost merchants between 2% and 10% per transaction. Cryptocurrencies such as Ethereum or Bitcoin typically offer far lower transaction fees in a single flat fee, saving retailers and merchants thousands in transaction costs.
- Immediate availability: Unlike credit or debit card purchases, cryptocurrency payments don’t required arbitrage by a third party. Traditional banking system operated payment gateways often hold funds for a predetermined waiting period. Cryptocurrency payments, in contrast, are available almost instantaneously.
- New Customers: As adoption rates grow, so too do the amount of consumers seeking to exchange cryptocurrency for goods and services. Accepting Bitcoin or other cryptocurrencies as a payment method places a business ahead of the pack, exposing businesses to clientele that were previously unavailable.
- Integrate Blockchain Technology: Accepting cryptocurrency as a payment method is the first step toward potentially integrating blockchain technology and the benefits it offers into your business.
How to Accept Cryptocurrency Payments as a Business
Accepting cryptocurrency payments as a retailer can be performed with varying levels of complexity. At the most basic level, all that a business needs in order to accept cryptocurrency in exchange for goods and services is a cryptocurrency wallet for the cryptocurrency of their choice. For major cryptocurrencies such as Bitcoin and Ethereum, wallets are extremely easy to set up.
Some businesses choose to hold their cryptocurrency on a dedicated hardware wallet, while others choose to use software wallets or hot wallets. Wallet addresses can be presented to customers as a simple QR code that is scanned via smartphone, streamlining the transaction process.
While it is possible to simply present a wallet address and charge customers a specific amount of cryptocurrency for goods and services, the relatively volatile nature of the cryptocurrency market causes many businesses to prefer to charge customers in fiat currency with the option of paying in crypto at converted rates. This practice can be performed in-house, but there are a number of platforms that offer dedicated cryptocurrency merchant services that streamline the conversion and storage process.
CoinJar is one of the most popular cryptocurrency brokerage platforms in Australia, and provides a wide range of services that make it ideal for businesses considering getting started with cryptocurrency payment acceptance.
Based in Melbourne, CoinJar offers Bitcoin brokerage and wallet services that streamline the process of accepting Bitcoin in exchange for goods and services. Using CoinJar to accept Bitcoin payments is simple — after establishing an account, users are provided with a “hot” wallet that can be used to store Bitcoin.
Bitcoin collected via the CoinJar platform can then be sold for AUD or even spent on business expenses via the CoinJar Swipe Bitcoin EFTPOS card. Importantly, CoinJare recently rolled out new features that allow users to register as an individual, a trust, or as a company, which can streamline the tax reporting process.
CoinJar supports both both BPAY and POLi payments in order to send fiat currency generated from the sale of Bitcoin to Australian bank accounts. Transactions to bank accounts are subject to a processing fee of of 2.5%. CoinJar also requires KYC information such as proof of residence and photo ID documents.
Coinbase is one of the largest and most popular cryptocurrency trading platforms in the world and, in early 2018, launched a wide range of services aimed at businesses and enterprise organizations. Coinbase Commerce is specifically designed to streamline the process of accepting cryptocurrency as a business, allowing users to set up business cryptocurrency accounts in minutes.
The Coinbase Commerce solution integrates with Presashop, WooCommerce, Shopify, Magneto, and Opencard, and is thus ideal for individuals operating ecommerce platforms in addition to retails stores. Notably, accepting cryptocurrencies via Coinbase Commerce is absolutely free, with no fees for incoming cryptocurrency transactions.
Like all major cryptocurrency exchanges, Coinbase requires that new users provide extensive photo identification documents. Businesses seeking to open business accounts with Coinbase will also need to provide taxation documents and articles of incorporation or equivalents.
Coinbase does not currently allow Australian users to sell Bitcoin and receive cryptocurrency, so in order to convert cryptocurrency into fiat currency collected via Coinbase Commerce Australian businesses will need to transfer any crypto earned to an Australian exchange that supports transfers to Australian bank accounts, and sell it there
TravelbyBit is a relatively new platform focused on making it possible for cryptocurrency holders to use crypto to pay for flights, accommodation, tours, restaurant experiences, and more. While the TravelbyBit platform is focused specifically on the tourism industry, it maintains a curated list of participating businesses that are all provided with streamlined point of sale software that makes accepting cryptocurrency for goods and services simple.
The TravelbyBit platform currently makes it possible for merchants to accept Bitcoin, Ethereum, Litecoin, Dash, or Bitcoin Cash, and generates a simple QR code that can be displayed on a smartphone or tablet for customers to view. The TravelbyBit POS software also makes the payment confirmation process simple and easy to understand.
Notably, the TravelbyBit platform provides automated tax reports and a number of additional accounting functions, and ensures that merchants are able to receive the full price of goods or services regardless of fluctuating cryptocurrency prices through a smart auto-updating pricing mechanism.
BitPay is a comprehensive payment platform designed specifically for businesses and merchants interested in adopting cryptocurrency payments. Based in the US, BitPay delivers Bitcoin and Bitcoin Cash payment acceptance functionality as well as secure storage services with a powerful suite of retail, ecommerce, billing, and donation tools.
The BitPay platform integrates with over 40 existing POS and ecommerce systems, and allows users to access a broad range of POS and merchant dashboard tools. Ecommerce features offered by BitPay include custom checkout forms, payment buttons and shopping cart plugins, as well as embeddable invoices.
Bitpay’s retail services include a mobile POS app, web-based checkout systems, and direct POS integrations with existing POS software. The BitPay platform also offers one of the simplest settlement procedures — BitPay is able to remit in AUD to Australian bank accounts, and does to automatically every business day.
In order to set up a verified account with BitPay, users must provide name, address, email, website, tax information, photo ID, and proof of business entity. BitPay offers a simple 1% flat rate fee for all transactions.
Brainblocks, unlike the other payment platforms outlined above, doesn’t support Bitcoin. Instead, Brainblocks is dedicated to promoting the adoption of Nano, one of the most popular alternative cryptocurrencies.
The Brainblocks solution is extremely simple. Merchants are able to present customers both in store and online with a simple customizable payment form that facilitates the instantaneous transfer for Nano for goods and services. In addition to offering a free, easy to use, and customizable Nano payment button, Brainblocks also offers Shopify and Woocommerce plugins.
Brainblocks doesn’t provide tax reports, fiat currency payments, multiple cryptocurrency support, or complete POS systems, but it’s the simplest way to set up instant cryptocurrency payments for Nano, which is a highly promising and extremely fast micropayment crypto currency.
The Tax Implications of Cryptocurrency Payments
Business considering accepting cryptocurrency as a payment method should be aware of the tax implications of cryptocurrency acceptance. Business transactions with cryptocurrencies made in Australia are subject to the same barter and countertrade transactions tax rulings as non-cash consideration. For detailed information on the tax implications of accepting cryptocurrency, take a look at our “Australian Bitcoin & Cryptocurrency Tax Laws 101” article.