Dear Business Owners
Don’t you love giving away 3% or more of every sale to Visa and Mastercard? And isn’t it even better when people whip out their Amex? Who doesn’t like those fees? Oh, that’s right. Business owners don’t.
Would you offer your customers a payment method which eliminates those transaction fees? If so, keep reading.
Hopefully by now you’ve heard of Bitcoin, if not this article isn’t for you. But if you have, let’s walk through using Bitcoin’s Layer 2 payment solution known as the Lightning Network for your business. The Lightning Network will work for you regardless of whether you sell donuts or fix mowers or cut hair. If you can create an invoice, your customer can pay it with their cell phone.
Why Accept Bitcoin?
Your first question is probably, “Why should I add Bitcoin as a payment method?”
Assuming you’ve been accepting credit cards for a while, you’re well aware of the drawbacks to credit cards:
- Those rewards cards that customers love so much are paid for by the 3+% fee that the processor deducts from every one of your sales.
- Then there is the per transaction fee, effectively deciding the minimum amount you can charge. If your base fee is $0.45, don’t you cringe when your customer wants to spend just $1?
- Depending upon your sales volume, your credit card processor probably charges a monthly fee as well.
- And who can forget chargebacks? If you’ve been in business long enough, surely you’ve felt the sting of a customer disputing a charge and losing the appeal with your credit card processor.
Bitcoin reduces or eliminates each of these pains:
- The Bitcoin Lightning Network has significantly lower fees. You can expect to pay around 0.2% or less. That’s more than ten times lower fees. What could you do with 2% to 3% more income?
- And while per-transaction fees are common, they’re usually less than one penny, and it is included in the estimated fee above.
- Regardless of your sales volume, there are no monthly fees.
- Additionally, Bitcoin transactions are final. There are no chargebacks ever.
Converting Bitcoin Into Dollars
Your next question might be: “How am I going to get the money into my bank account so that I can pay bills?”
While some of you might want to keep some or all of the bitcoin collected as bitcoin, most businesses spend a large percentage of their gross income on bills which can only be paid with dollars, so converting between bitcoin and dollars is the most important issue.
The flow will go like this:
- Customer asks for an item.
- On a tablet, you create a Lightning invoice.
- Customer scans a QR code from your tablet.
- You receive bitcoin.
- Later, you transfer that bitcoin to an exchange to convert into dollars.
- You transfer from the exchange to your bank account.
There are several exchanges that support Lightning. What follows is a walk-through using either Strike or River Financial. You’ll only need to work with one of these two companies, but hopefully seeing two options will give you the sense for what is involved.
Strike is included because what they are trying to achieve — hyperbitcoinization — both in El Salvador and world wide, is worth supporting with your business.
River Financial is included because they support Lightning Network and would be simple for you to integrate into your business.
Additionally, this guide is going to describe working with something called an Umbrel. At this point you only need to know that it is an inexpensive computer which you’ll want to purchase to be the center of your new payment system. Umbrel will be described more fully in the section “Set up a node.”
Using Strike As Your Exchange
Step 1: Create an account on Strike
Creating an account starts out lightweight. You only need to give them an email address and a cell phone number, but to transfer higher dollar amounts you’re going to need to prove your identity with them by sending pictures of your government identification.
Once you’re all verified you should be able to connect your bank account. On the “Profile” tab, there is a “Payments Method” button that you use to connect Strike to your bank account.
Step 2: Request payment on Strike
You’ll need to create a Lightning invoice in the Strike mobile app.
- From the “Home” tab, select Request.
- Select the Bitcoin logo in the top right corner.
- Enter a note for the transfer. You might use today’s date or anything unique to help your record keeping.
- Enter the amount you want to move in dollars. Strike will convert this into bitcoin automatically.
- On the following “Request” page, select the QR code icon in the top right.
- Tap the “Share” button at the bottom to reveal the QR code.
- Scan the QR code to get the invoice as text or, if you don’t have a QR code scanner, use the “Share” button to get access to…
Read More: How To Implement Bitcoin At Your Business