Why your small business should accept Bitcoin: Paypal vs. Google Wallet vs. Coinbase vs. Bitpay

Let’s get real here, small business owner/operators care about one thing: Maximizing profits.

The best way to maximize profit is by increasing revenue while decreasing costs; furthermore, it is likely an affinity towards doing one or both of those two things in your particular field that gravitated you towards running a small business.  Obviously, there are other business strategies that can achieve maximization of profits and they go along the lines of increasing revenue more than increasing costs; likewise, sometimes businesses are faced with decreasing costs more than decreasing revenue.  However, it is clear that increasing revenue while decreasing costs is the simplest most effective way.

I will show you how you can decrease costs and increase revenue in the one part of small business that is ubiquitous: Money.  Very simply, merchants can decrease costs by paying less fees to the intermediaries between customer and business.

While many small businesses still operate on a cash only basis and thus do not have an online presence, even those owner/operators are starting to feel the crunch as more and more customers walk into brick and mortar institutions with a wallet full of plastic and/or a phone full of gift cards.  Traditional services offered directly by the bank and CCs are quickly losing traction both from customer and merchant pressure.  It is this area, especially in the online market, that Paypal has left its mark on the world.  However, I believe that Paypal’s mark has become far too overbearing and imperious as is typical of monopolistic firms in a closed market.


Paypal currently offers merchants three tiers of payment solutions, the most popular of which is the standard payment solution: 2.9% + $0.30 per transaction, for smaller small businesses that typically deal in payments averaging less than $10 they offer 5% + $0.05 per transaction.  For larger monthly volumes, the per transaction fee percentage goes down.  However, even if your small business has over $100,000 in monthly revenue, your fee is still 2.2% + $0.30.

Additionally, Paypal charges an additional 1% currency exchange for international payments.

Monthly fee: $0-$30
Per transaction fee: 2.9% + $0.30
Bank deposit fee: 0
International payments fee: 1%


Google Wallet

In one month, Google Checkout will be phased out and Google Wallet will be Google’s foray into the payment processing world.  Yet another way for users to send money from their plastic cards without letting the business see the card.  While documentation is scarce, Google has priced their fees to be directly competitive with Paypal’s: 2.9% + $0.30 per credit card transaction.

Monthly fee: 0
Per transaction fee: 2.9% + $0.30
Bank deposit fee: unknown
International payments fee: unknown




Coinbase allows merchants to sign up for a merchant account that has slightly better rates than individual accounts.  Merchants can use coinbase to create invoices to be paid in Bitcoin, and then receive the bitcoins and hold them as bitcoins for free.  Bitcoin payments can also be automatically converted to USD for a 1% fee.  However, Coinbase currently is offering 0% fees on your first $1,000,000 in payment processing.  The USD in your Coinbase account can be withdrawn to your bank account whenever you please but requires a one time $0.15 ACH transfer fee.  

Unfortunately Coinbase is only available in the USA.

Monthly fee: 0
Per transaction fee: 0%  for first $1,000,000

Bank deposit fee: $0.15
International payments fee: 0



Bitpay is available in dozens of countries and is continually expanding.  Bitpay also has several tiers of payment processing services like Paypal but the ones of note to small businesses are their Professional package, which will be available starting November 2013, and their Starter package, which is available now.  Bitpay offers settlement to your bank account once a day at no cost.

Bitpay’s Starter package:
Monthly fee: 0
Per transaction fee: 1%
Bank deposit fee: 0
International payments fee: 0

Bitpay’s Professional package:
Monthly fee: $30
Per transaction fee: 0%
Bank deposit fee: 0
International payments fee: 0


Previously, the only economic reason to not accept Bitcoin was to avoid fluctuations in exchange rate during the processing period.  Accepting bitcoins, sending them to an exchange, then waiting for the exchange to wire $ to your bank account is too much hassle for a busy small business owner/operator.  The potential fluctuations in the exchange rate during your processing period was likely to negate the additional revenue generated by the significantly lower transaction fees.  It is important to note that Bitcoin exchange rate stability is on the rise; but more importantly, the Bitcoin payment processing services have developed to a point that exchange rate stability is no longer a factor.

“So what if the fees are lower, I still don’t believe there are any people out there willing to use their bitcoins”

The exact number of the population of Bitcoin users is inherently hard to pinpoint. There have been hundreds of thousands of downloads of the original Bitcoin client, as well as its most popular lightweight version.  The fact of the matter is that Bitcoiners are out there and their numbers are increasing.

By accepting Bitcoin at your small business you will receive free advertising to all the Bitcoin users in the world.

Local Bitcoiners will seek out your business and patronize it.

What do you have to lose?

Current customers that prefer to use Bitcoin to pay will generate you 1.9% + $0.30 more per transaction, and new customers that use Bitcoin will increase revenue.


If your business has decided to accept Bitcoin and would like to take advantage of the free advertising that I have mentioned..
Please email bitbybitbybitcoin@gmail.com and your announcement will be added to a weekly newsletter to be posted in relevant forums.


    • Thanks for mentioning those other competitors! Square offers a 2.75% per transaction fee as their best pricing, which is highly competitive against Paypal. On the other hand LevelUp offers 2% flat transaction fee; however, they require a one time hardware setup fee of at least $50.

      With Bitcoin, there is no one time hardware setup fee, small business owners can use their own smart phones or any existing internet or mobile data enabled device.

      Again, compared with Coinbase and Bitpay, the per transaction fees are higher.

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