Cryptocurrency Point of Sale (PoS) systems are becoming popular as more businesses and people start using digital money. They let stores take cryptocurrency, giving customers a cool, new way to pay. Skipping old-school credit cards saves money on fees, speeds up payment time, and adds security. Learn about the key parts, features, and how both shops and buyers gain from using these PoS systems.
What is Crypto Point of Sale?
Crypto Point-of-Sale (PoS) is a solution for setting up a cryptocurrency payment gateway. It allows customers to pay for products and services with cryptocurrency quickly and effortlessly using their mobile devices and crypto wallet. The primary benefit of the Point-of-Sale system is its convenience, as it only takes a few seconds to generate an invoice that customers can use to pay. Additionally, the PoS gateway is user-friendly and doesn’t require any complicated setup.
Payment of Service is a secure way for both the seller and the buyer when using cryptocurrencies. It also gives merchants the ability to personalize their invoices and generate new ones for each customer, making PoS an ideal choice for small physical stores that don’t need to handle dozens of transactions per second.
Cryptocurrency Point of Sales can be either web-based (software) or a hardware/device, similar to the standard PoS terminals that we use every day.
How does a crypto Point of Sale system work?
Regardless if it is a web-based app or a hardware device, Point of Sale systems works very similarly.
Crypto POS terminals are easy to use. All you need to do is enter the amount your customer needs to pay in any fiat currency, select the cryptocurrency they want to pay with, and the system will automatically generate a QR code.
Your client can use their phone to scan the QR code and pay the amount you previously mentioned with their crypto wallet.
Benefits of using cryptocurrency PoS at your physical store
Better security than standard payment methods
All digital assets are supported by a blockchain system that utilizes cryptography. Cryptography is an area of mathematics focused on providing secure end-to-end encryption. Therefore, your transaction is securely transmitted through highly encrypted cryptocurrency mining servers to form a series of blocks that cannot be changed. This reduces the risk of scams, transaction breakdowns, or power outages in your Point Of Sale system.
Low transaction fees
When utilizing standard POS systems for transactions, you are entrusting third-party vendors with the responsibility of security. However, when it comes to cryptocurrency, blockchain networks enable peer-to-peer exchanges without any outside vendor. Using a crypto payment gateway eliminates the need for third-party vendors, which in turn reduces transaction fees to around 1%. On the other hand, standard credit or debit card transactions are subject to 3% fee.
Better for marketing
You already know that enabling crypto payments is an increasing trend when it comes to payment method forward thinking. An effective marketing campaign can be built around a simple slogan “We embrace the future of digital payments”.
Staying ahead of the competition
Not matter how big or small your business is, you always face direct competitors. You can reach a new loyal client base by implementing a quick and secure way of making transactions.
A new wealthier demographic group
According to an article by Triple-A, in 2021, 46 million people or 13.7% of the United States’ total population, currently own cryptocurrency. When we have a closer look at the statistic, we can see that 44% of the cryptocurrency owners in the USA have an annual income of over $100.000.
No refunds
Bitcoin transactions are irreversible and can only be refunded by the receiving side – a significant contrast to credit card transactions that can be canceled. This means that if you accept bitcoin, there is no charge-back.
Read more on How to accept cryptocurrency payments in your brick-and-mortar store.
Important aspects to consider before using a cryptocurrency PoS system
All rewards come with some risks. There are a few factors that you need to look upon before implementing a PoS system.
Volatility
It is a well-known fact that cryptocurrencies can be volatile. It’s crucial to have a planned strategy for what to do with the coins you receive if you intend to hold them for a longer period of time. You have to decide in advance if you plan to cash out at some point and how often or if you decide to hold them.
Compliance
Cryptocurrency regulations and laws are constantly evolving based on the increasing usage throughout the world. Data protection regulations, anti-money laundering and know-your-customer requirements are a few factors to pay attention to. It’s important to keep track of the changes in compliance or to consult a legal expert if needed.
Security
When using a crypto PoS there isn’t a third party involved and the transaction takes place directly between the client and the merchant. You are able to access the history of the transactions you made instantly and can remain anonymous in a world where privacy is an expensive commodity.
Taxes and accounting
In many countries, the tax laws on cryptocurrencies constantly change as their stance is not yet clear. For example, in the US, IRS classifies cryptocurrency as property or a digital asset. Any time you buy, sell or exchange crypto, it’s a taxable event. Take taxes into consideration before starting to accept cryptocurrency payments.
Which digital currency do you want to accept
If you want to accept cryptocurrencies, you have to research which ones to onboard in your business carefully. The popular cryptocurrencies are bitcoin and Ethereum, which are safe bet among users. If you still have doubts, don’t hesitate to talk to an expert.
What are the different types of cryptocurrency Point of Sale systems?
Let’s explore the two main types of crypto PoS systems in more detail. They are web-based applications and hardware devices.
Web-based cryptocurrency Point of Sale applications
These apps are accessed through a web browser and do not require any additional hardware. Merchants can simply sign up for the service, connect their digital wallets, and start accepting cryptocurrency payments from customers. These web-based systems offer a simple and convenient solution for merchants who want to accept cryptocurrency payments without investing in expensive hardware.
Usually, such apps can be installed also on Android or iOS, which makes it even more convenient.
Here are a few examples of such crypto PoS applications:
Nowpayments
Nowpayments is one of the leading crypto payment gateway providers. They also offer a solution to accept payments through a PoS link.
In order to set up a crypto POS link with Nowpayments, you need to follow these steps:
1) Create an account with Nowpayments
2) Add your wallet address
3) Go to Settings -> Coins settings and select the cryptocurrencies you would like to be paid in. Make sure to select coins or tokens that are supported by your wallet! There are more than 100 cryptocurrencies to choose from: