Australian Business: Is it easy to set up Bitcoin as a payment option?

In short, the answer is ‘yes’ and it is a relatively simple process to initiate for online trade or even at your point of sale system for face to face transactions.

Over recent months, I have seen more than a few Australian businesses who now accept payment for goods and services via Bitcoin and if you are a believer in the future of cryptocurrency, it is also an easy way to acquire it.

Currently, it does seem to be more of a trendy offering to showcase rather than a burgeoning cash flow channel for a business and just how many sales are facilitated today in Australia via Bitcoin are hard to find doing research for this piece.

Speaking of which, please do not confuse this article in any way as a form of investment or financial advice. So consider this the official ‘disclaimer’ for those still willing to read on. If you are looking for advice on investing in Bitcoin then bounce off this page now and go and talk to a professional investment strategist.

What we are exploring today is the ability to set up a Bitcoin wallet for Australian business and the ability to get paid for the goods and services you sell through that gateway.

So why would you want to do this?

Besides the need to look like an ‘ahead of the curve’ visionary, there is no doubt Bitcoin has now infiltrated more daily conversations around dinner parties, BBQs and water coolers than ever before. The fact that at the time of writing this, Bitcoin has broken through $7280 AUD definitely helps it as a hot topic and it seems as though every second person you talk to about it has their own “I shoulda bought Bitcoin back when it was cheap” sob story.

(Footnote to this screen grab: Between writing the paragraph above this image and taking the screen grab, the price of Bitcoin vs AUD jumped from $7,279.67 to $7,376.31 as pictured…almost $100 in one hour!)

With a solid base of conversation and interest on the rise here locally, this is one reason to set up a Bitcoin payment gateway as all of this talk will eventually lead to action. But are your clients and target market part of where that action will take place?

Globally it is estimated that there are only approximately 3.5 – 5 million active users of cryptocurrency today. Bitcoin makes up about 70 percent of that market capitalisation with other cryptos penetrating the market and gaining traction.

In regards to the size of transactions that take place, the Cambridge Centre for Alternative Finance has data that shows the average transaction between businesses sits at $1878 which is low compared to P2P and C2B segments.

Their report also states “Cryptocurrencies such as Bitcoin have been seen by some as merely a passing fad or insignificant, but that view is increasingly at odds with the data we are observing.” says Dr Garrick Hileman, Research Fellow at the CCAF. Their full report can be found in the link below.

Interestingly, the total cryptocurrency market capitalisation has increased more than 3x since early 2016, reaching nearly $25 billion in March 2017. That tripling in size over 12 months indicates another reason to perhaps get on board the Bitcoin train. See graph below:

Image and graph from CCAF report shows share of Bitcoin vs all others Market Capitalisation in Billions.

Barriers to Entry

One of the reasons a lot of individuals and businesses are reluctant to enter this space is the confusion and mistrust that surrounds it. I have been an avid follower for a few years now and along the journey have encountered many instances where you simply can’t get straight answers when doing research.

There is also a lot of misinformation and spam present because of so many older, unreliable sources of information that make their way up high on search engine results. Because of this, it is easy to become frustrated and give up on doing any thorough due diligence and simply decide to wait until it is mass adopted.

Before we get too far away from our original topic, a basic understanding of a few quick facts to clarify some terminology, allay some confusion and give more confidence to anyone considering Bitcoin as a payment option:

• There are many different types of cryptocurrencies in use and that you can trade with, but Bitcoin is the most popular and was first released back in 2009.
• Bitcoin is often confused with being a technology itself but it is only one of many currencies trading on the technology behind it; the Blockchain.
• Blockchain technology has been around since the 90’s and has been refined to its present form as the underlying ledger that all currencies trade upon. It is decentralised and no one or government, state group can manipulate it.
• During 2015 regulators and big corporations started to get interested in the Blockchain technology and over 1 billion USD was invested into Blockchain startups by the end of 2015.
• Today almost every major corporation and the bank has a team who is researching the possibilities of Blockchain applications.

“ The blockchain is the best thing invented since the internet”
ZIAD TANNOUS, who runs Crypto Fans, one of the largest scam and spam free groups on Facebook.

Most importantly, the Blockchain (in theory) is considered ‘unhackable’ as it runs off many separate nodes worldwide. For a hacker to penetrate any transactions, they would need to locate and find all of the nodes and hack each one at exactly the same time in order to change a previously completed transaction on the ledger.

Ready to Jump In? It’s easier than you think…

After reading this I strongly recommend doing some more of your own research and consulting with partners and advisors. If you’re ready to go to set up phase following that the first thing you will need is a ‘wallet’ to trade, accept payment, make your own purchases and store your cryptocurrency in.

‘Coinbase’ is a popular starting point to get an understanding of soft and hard wallets (and other varieties) and to begin researching fees, charges, etc…and then another is ‘CoinJar’. Do plenty of research before signing up, but note there are free memberships for both.

Once you have created your wallet, you are ready to do the relevant next steps and start advertising on your site or at point of sale that you can accept payments via Bitcoin.

Depending on the financial and/or eCommerce gateway you’re using now, you can usually find an associated plug in for open source websites and WordPress has many of them. The top ones I have located are here:

1. GoUrl WooCommerce Plugin
2. Digital Paybox Plugin
3. GoUrl Bitcoin Payment Gateway Plugin
4. Bitcoin Payments for WooCommerce
5. WordPress Bitcoin
6. Bitcoin Payments
7. Easy Digital Downloads Plugin
8. Stripe Payment Gateway for WooCommerce Plugin
9. Mollie Payments for WooCommerce Plugin

You can also plug in a Bitcoin Price Ticker and a Bitcoin Calculator Widget as displays within site pages if so desired. These would be important for calculating each transaction price and for any purchaser to consider as well.

PayPal and Braintree also offer several ways to connect Bitcoin to your payment gateway and info can be found directly on each site or via your own login portal.

If your site is not open source and restricted in compatible plugins, you will need to develop your own ability to set these up with your web team or find a suitable plugin from your financial institution or online wallet provider.

Final Wrap Up

As a source of reputable local information, here is a link to the Australian Government’s Business website. On this page you can find more info on Bitcoin pertaining to Australian law and requirements, tax implications and even how to pay salary and wages via Bitcoin.

When heading down this path, make sure you are educated and understand what it is you are setting up. Seek advice from your accountant, financial advisers and reputable/reliable sources within your own network.

Bitcoin and any other cryptocurrency offered as a payment option does create an extra ‘enabler’ and gateway for someone to transact financially with you – but these types of currencies are extremely volatile and can be a risk.

You could lose a small or large percentage of the value of your Bitcoins in a very short period of time. However, the same can be said for the upside with them as well as has been the recent trend for Bitcoin owners.

Be smart, be informed and above all else – be sure of the decisions you make.

I can help with any setup or further questions you might have relating to this article and have the support of a highly technical and gifted team behind me here at ITCC. Feel free to email me matt@itconsultingcompany.com.au or comment below.

Written by: Matt Kippin, Online Business, Systems & Product Expert @ ITCC

Link to full Cambridge Centre for Alternative Finance PDF Report Here.