Whether you’re a fan of Netflix’s Black Mirror or not, there’s no denying that the future is decentralized and will change how we do things. When it comes to payment methods, we’ve already seen cryptocurrencies gain immense momentum as an alternative to traditional payment methods. This is why we’re showing you how to accept Ethereum payments.
Ethereum has steadily become one of the most popular blockchain platforms for smart contracts, decentralized applications, and cryptocurrencies. As a business owner, the best way to future-proof your business is to jump on the bandwagon of accepting crypto payments.
What Is Ethereum?
Before we show you the steps to start accepting Ethereum payments, let’s introduce you to this popular platform and how it differs from other blockchain technologies.
Ethereum is a blockchain created by Vitalik Buterin in 2015 and allows web3 developers to create and deploy smart contracts and useful decentralized applications (DApps). Put simply; smart contracts are self-executing programs that enact the terms of a contract when specific conditions are met.
Over the years, Ethereum has grown to be one of the most well-known blockchain platforms and uses a cryptocurrency named Ether (ETH), which is widely used as a form of payment. Because of its flexibility and programmability, Ethereum has become a popular choice for investors, developers, and businesses.
Now that we’ve got that covered, let’s look at the steps to follow to accept Ethereum payments on your platform.
How to Accept Ethereum Payments: The Steps to Follow
Step 1: Understand How Ethereum Works
Before you get started with accepting crypto payments, you must understand how cryptocurrency works. And in this case, how Ethereum works. We’ve touched a bit on what Ethereum is above and why it’s a popular blockchain in the business world. Now, let’s get a bit more information.
The major thing to understand as a business owner who wants to accept ETH payments is how Ethereum differs from other cryptocurrencies like Bitcoin.
Ethereum allows web3 developers to create smart contracts, which enable you to automate payment verifications and remove the need for intermediaries when executing transactions. This means that you won’t need to use a bank when receiving Ethereum payments.
You can now see why Ethereum is the second-largest cryptocurrency globally, by market capitalization. Nonetheless, you should still arm yourself with knowledge of how other cryptocurrencies work to allow you to cater to more customers. To start you off, we have a guide on what Bitcoin payment is and how it works.
Step 2: Set up an Ethereum Wallet
The second step to accepting Ethereum payments is to have an Ethereum wallet. This is a digital wallet that allows you to store, receive, and send Ethereum.
There are different types of Ethereum wallets to choose from, and we’ll look at them in brief detail to enable you to choose the right one for you and your business.
a) Web Wallets
The first type of Ethereum wallet is the web wallet. These are online wallets you can access from anywhere in the world using a trusted web browser. The advantages of using web wallets to accept ETH payments are that they are easy to use, and you can access them from anywhere in the world.
On the other hand, the major disadvantage of this Ethereum wallet is that it is less secure than the other types we’ll look at below. Unfortunately, your web wallet has a higher chance of being hacked than a hardware wallet.
b) Mobile Wallets
Mobile wallets are similar to web wallets in that you can access them from anywhere as long as you have an internet connection. The only difference is that mobile wallets come in the form of an app you download and install on your mobile device or computer.
Just like web wallets, mobile wallets can be hacked, which makes them less secure than desktop or hardware wallets.
c) Desktop Wallets
The main advantage of using desktop wallets to accept ETH payments is that they are more secure than web or mobile wallets.
As the name suggests, desktop wallets are software wallets you download and install on your computer. Just like mobile and web wallets, these Ethereum wallets are easy to use. The only difference is that you can only access them from the computer or device you’ve installed them.
d) Hardware Wallets
Hardware wallets are the most secure Ethereum wallets but also the most expensive. These physical wallets allow you to store your ETH offline and away from hackers on the web.
Therefore, if security is of the utmost priority to you, hardware wallets are the way to go. The only price you’ll pay for this security is that you cannot access your Ethereum unless you have the physical wallet at hand.
Some factors to consider when getting the best Ethereum wallet include accessibility, security, and convenience. Therefore, prioritize your needs and set up the wallet that best suits your needs and preferences.
Step 3: Integrate an Ethereum Payment Gateway
You now understand how Ethereum works, and you have your Ethereum wallet. The next step is to integrate an Ethereum payment gateway that will allow you to start accepting crypto payments. A payment gateway is a technology that allows you to accept various payment methods, including credit debit cards, credit cards, and cryptocurrencies.
The good thing about accepting Ethereum payments is that you can use several Ethereum payment gateways. The most popular ones include Rapidz, CoinGate, CoinPayments, BitPay, and NOWPayments.
Another great aspect of using an Ethereum payment gateway is that you can automatically convert the Ethereum from your customers into another cryptocurrency or fiat currency. Therefore, if this is a feature you’d like, ensure the payment gateway you choose allows you to do this. Once the conversion is done, the payment gateway can send the money to your wallet or even your bank account.
Follow these steps to integrate an Ethereum payment gateway:
- Choose the Ethereum payment gateway you prefer and sign up for an account.
- Create a payment button or API key and embed it on your online store or website.
- Test the Ethereum payment gateway to ensure it’s working properly.
- Get ready to accept Ethereum payments with ease.
We recommend getting an expert to handle step 2 if you’re not well-versed in the technical aspects of your website or online store.
Step 4: Inform Your Customers of Your New Payment Option
If you’ve been in business for a while and haven’t previously been accepting Ethereum payments, it’s important to advertise that you now are. This will spread awareness and allow existing customers to use this new payment method.
Advertising your Ethereum payment option will also draw in customers who prefer to pay in Ethereum and couldn’t previously purchase from you. Basically, you’ll be able to access a new customer segment that was previously out of your reach.
Some of the ways you can spread word include adding the Ethereum payment option on your product page and checkout page, posting on your social platforms, emailing existing customers, and even adding a creative piece of copy on your homepage.
You could also add some valuable information, such as the benefits of Ethereum payment and how to go about it. The latter is especially important, and we recommend educating your clients and customers on how to make ETH payments with clear instructions.
For example, you could provide information on setting up an Ethereum wallet, sending ETH, and scanning your QR codes when making payments.
Step 5: Monitor Transactions
Monitoring transactions allows you to track payments and also ensure that you have enough ETH for transaction fees and to process payments.
The good thing about accepting ETH payments is that most Ethereum payment gateways come with a feature for real-time monitoring. This allows you to track incoming customer payments and see the transaction details.
The best way to ensure that you have enough ETH to process payments is to keep track of the balance in your Ethereum wallet.
Step 6: Convert Your Ethereum to Fiat Currency
Using an Ethereum payment gateway with a feature that supports Ethereum to fiat conversion will save you from the hassle of having to use an exchange. Therefore, we recommend getting a payment gateway like CoinPayments or BitPay that automatically converts your ETH to fiat currency.
Nonetheless, some of the exchanges you can use to convert your Ethereum to fiat currency include Binance, Coinbase, and Kraken. Once you do that, you can transfer your funds to your bank.
Converting your ETH to fiat currency will allow you to pay your suppliers and fund other areas of your business with ease.
Step 7: Set up and Maintain Security
We mentioned above that web, and mobile wallets are often susceptible to cyberattacks from hackers. Therefore, if you plan on accepting cryptocurrency payments, you must secure yourself and your business from potential attacks or even fraud from customers.
Some tips you can use to maintain security in your business include:
- Using a secure Ethereum wallet and always keeping your private keys safe and away from prying eyes
- Regularly updating your software to prevent vulnerabilities attackers can leverage
- Using strong passwords and updating them regularly
- Constantly monitoring your Ethereum transactions to ensure no fraudulent activity takes place
Benefits of Accepting Ethereum Payments
Let’s look at some of the advantages of accepting Ethereum as a payment method.
1. Global Accessibility
If you’ve worked with customers paying with another currency, you know how frustrating it can be to convert your prices to their fiat currencies. Luckily, you won’t have to worry about that while accepting Ethereum payments because ETH is a global currency.
Anyone in the world with an internet connection can send and receive ETH. This means that you can sell your goods and services to anyone without the need for fiat currency conversion or international transaction fees.
2. No Need for Intermediaries
In addition to being able to sell to anyone in the world without worrying about currency conversion or international transaction fees, you also won’t need to involve third-party processors like banks when accepting payments.
The advantage of this is that it reduces the risk of fraud and speeds up the payment process. Therefore, if you’ve been wondering how to kick your bank or other third-party processors to the curb, this is your chance.
3. Lower Transaction Fees
Ethereum transaction fees are significantly lower than transaction costs on traditional payment methods. Lower transaction fees will be especially beneficial to you if you have a high volume of transactions because you’ll save a lot on those costs.
This benefit is mostly for your customers, especially those who don’t want to disclose their private information when making purchases.
The advantage that this will bring to you is that you’ll attract these customers and increase your business revenue. We mentioned above that accepting Ethereum payments opens your business up to a customer base to which you previously didn’t have access. This is one of those ways.
5. Future-Proof Payment Method
One of the best ways to future-proof your business is to stay ahead of the curve and adapt. Accepting ETH payments will help you do that because it is a cutting-edge payment method quickly gaining popularity.
Therefore, by accepting Ethereum payments, you are positioning your business as an innovator, which can help you attract more customers now and in the future.
We hope you’ve gained sufficient knowledge to start accepting Ethereum payments immediately.
Some of the advantages of ETH payments are that they are secure, fast, and have low transaction fees. Remember to follow the steps we’ve outlined above to streamline the process of getting started with accepting Ethereum payments.
Read our introduction above to understand Ethereum, set up an Ethereum wallet, integrate an Ethereum payment gateway, inform customers of your new payment method, monitor your transactions, convert your ETH to your desired fiat currency, and secure your system.
If you’d like to accept other crypto payments, check out our guide on how to accept Dogecoin as payment next.