Cryptocurrency is an increasingly popular method among today's shoppers. While common currencies like Bitcoin and Ethereum have gained traction in recent years, there are almost 9,000 different types of cryptocurrencies currently on the market, including PayPal USD (PYUSD), a U.S. dollar-denominated stablecoin.1 These innovative forms of payment continue to attract shoppers because of their potentially fast and cost-effective transactions.
As Insider Intelligence reported, more than 34 million U.S. adults own cryptocurrency, with that number expected to increase by double digits through 2023. Crypto transactions are also predicted to exceed $16 billion this year — a whopping 55% jump from 2022.2
For small businesses, accepting crypto can potentially open a whole new customer base and help increase sales. But first, it's important to have a strong understanding of what crypto are, how they may work, and how to potentially set them up for your business.
Crypto are transactions made using cryptocurrency.
But what is cryptocurrency? In basic terms, it's a form of currency that only exists in the digital space, so it's exclusively transmitted from computer to computer. This currency uses cryptography — or encoded information — to validate and secure each transaction. Each transaction is then recorded in a digital ledger called a blockchain.
Learn more about crypto with our cryptocurrency vocabulary glossary.
Ready to accept crypto for your small business? Take these steps to get started.
Cryptocurrency regulations are constantly changing. While cryptocurrency was created to be unregulated and decentralized — without any overseers or intermediaries — governments around the world are considering ways to monitor and manage crypto.
In the U.S., cryptocurrency regulations can vary by state, so be sure to research any state regulations that may impact how you accept payments.3
There are two common ways to accept crypto as a merchant: through a crypto wallet or gateway.
You can use a crypto wallet to accept directly from a customer's crypto wallet. However, the funds will remain in cryptocurrency form until you transfer them to a crypto exchange. You may be able to use crypto processors or gateways to accept payments and exchange them for U.S. dollars on the same platform.
Cryptocurrency processors often come with fees, but they can also provide certain conveniences and protections for businesses getting started with crypto.
Now it's time to incorporate cryptocurrency as a option in your checkout process and at your point of sale. Some payment processors like PayPal have crypto built into their checkout solution, so accepting crypto from customers can be simple. PayPal even converts the cryptocurrency to fiat currency, like traditional US dollars, to pay the merchant.
You can also work with your e-commerce platform to download a specific plug-in for accepting crypto. If you're using a crypto wallet, you may be able to hardcode this checkout option into your site.
Explore FAQs and references to learn more about accepting crypto for your business.
There are many potential benefits of accepting crypto, including:
Learn how to accept cryptocurrency payments with PayPal.
Accepting cryptocurrency may come with certain risks, including:
Discover the many ways to accept payments with PayPal.
In partnership with three expert business owners, the PayPal Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.
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