Set up a digital wallet and link it to the PoS app
This is a procedure that requires confirmation to guarantee that the wallet belongs to you. Your cryptocurrency wallet is where your customer’s digital currency payments will be sent.
Create a payment order
When the customer is ready to pay for your products or services, you can enter the precise amount into the point-of-sale application.
Generally, Point of Sale applications provide two methods for completing transactions:
1) Send the Payment Manually: Once you place the order, a deposit address will be generated. The customer can then finish up the payment by entering their deposit wallet address into their crypto wallet and submitting the transaction.
2) Pay by a QR Code: Most Point-of-Sale applications can generate a distinct QR code, which the customer can scan with their wallet app. After scanning it, the transaction is finished.
Please bear in mind that the exact steps my differ depending on the PoS app you use.
Receive your payment
The final stage is when your coin lands in your wallet. Nothing else needs to be done. Cryptocurrency transactions are quick but require block confirmations, so you can see it arrive in your wallet shortly after that. You can choose to have your coins sent directly to either your wallet or your bank account in the form of cash, depending on what you’ve set up.
Some PoS apps like Bitpay can automatically convert the crypto that is transferred to you into a fiat currency of your choice directly to your bank, while others (like Nowpayments) will transfer cryptocurrency to your wallet address.
Accept cryptocurrency payments in your retail store directly to your wallet
This is the classic way to get crypto payments. Here’s a short guide for taking any type of cryptocurrency in your shop. It may change slightly depending on the currency, but this is basically how it works.
Setup a wallet – You have two choices when it comes to getting a crypto-currency receiving address: sign up for a custodial wallet like CoinBase or manage one yourself, where you control the private keys. If you’re dealing with a large amount of cryptocurrency, it’s recommended that you get a hardware wallet. It’s impossible to breach them if you adhere to their instructions.
Print a QR code with your wallet address – This is the simplest method to give your customers your wallet address. All they have to do is to scan the code with their wallet or exchange app and then transfer the needed amount of crypto.
What to consider if you choose this method of accepting crypto payments
There are some noteworthy decisions you would have to make before choosing this method.
Which cryptocurrency should you accept in your brick-and-mortar store?
Once you’ve made up your mind to incorporate cryptocurrencies in your business, the next question is, which one should you go for? Bitcoin is a safe bet since it is the most popular cryptocurrency, with the biggest market share and most adoption.
Despite its popularity, Bitcoin has some issues that other cryptocurrencies don’t have to deal with, like higher transaction fees and extended wait times for confirmations. Ethereum and Ripple are two good examples of alternatives that don’t face such problems.
You have to consider factors such as the liquidity of the coin, security, transaction speed and fees, and more. We recommend you get familiar with the market and consult a financial advisor or other experts if needed.
How and when to cash out?
As a business owner, you should be familiar with the process of exchanging your crypto-currencies for your local currency. You can register on exchanges such as CoinBase or Kraken and sell your coins to receive deposits in your bank balance. You can also consider selling your Bitcoins directly on a peer-to-peer marketplace like LocalBitcoins, which is available in almost all countries.
You can also buy gift cards, a topic we discussed in detail in another article, or directly shop with crypto.
What to consider before accepting cryptocurrencies at your retail store at all?
While accepting cryptocurrency payments in a brick-and-mortar store can offer several benefits, it is important for you to carefully consider a few factors before implementing this payment method.
Knowledge
First and foremost, you must have a clear understanding of how crypto transactions work, as well as the potential risks and benefits associated with accepting cryptocurrency payments. This includes knowledge of topics such as cryptocurrency price volatility, security measures, and regulatory compliance requirements.
Fees, including the installation fee of the PoS terminal
You should also be aware of any fees associated with accepting cryptocurrency payments, such as transaction fees or conversion fees, even though they are much lower compared to the standard payment methods.
A standard PoS terminal hardware (if you choose this option) typically costs roughly $200-$300 more
Payment gateway provider или PoS provider
In addition, you should carefully research and select a trustworthy cryptocurrency PoS app (if you decide to go with this option) and ensure that they have proper security measures in place to protect against potential fraud or theft.
Regulations
Make sure that you comply with all legal or regulatory requirements related to accepting cryptocurrency payments in your jurisdiction, and consult with legal and financial advisors if needed.
Taxes and accounting
Even though cryptocurrencies were designed to be decentralized and free from government oversight, in some countries, you still have to pay taxes on crypto. For example, in the USA, short-term crypto gains on purchases held for less than a year are subject to the same tax rates you pay on all other income: 10% to 37% for the 2022-2023 tax filing season, depending on your federal income tax bracket. If you hold onto your coins for at least a year, the range is from 0% to 20%, depending on your income level.
By carefully considering these factors before implementing cryptocurrency payments in your brick-and-mortar store, you can ensure a smooth and secure transition to this payment method and reap the benefits of increased security, lower transaction fees, and a wider customer base.
Conclusion
From setting up your digital wallet to receiving the payment, you have to know how crypto payments work, follow compliance rules and keep an eye on the regulations, as they are constantly evolving. A wide variety of cryptocurrency PoS terminals and crypto wallets are now available for your business but take into careful consideration your needs and goals.
If your brick-and-mortar store starts to accept cryptocurrencies, it will benefit from lower transaction fees, a quick and secure payment process, and will be able to diversify your client pool. In a market that is constantly trying new payment methods, crypto payments are here to stay.