With a BTCPay server, you can take over the processing of Bitcoin payments for an online store yourself. In contrast to conventional payment methods such as credit card or PayPal, with your own BTCPay server you take over the role of the payment processor and retain full control over the payment processing. This article presents the advantages of having your own BTCPay server and is part of a series.
The owner of an online store may also use other payment options such as bank transfer, purchase on account, Sofortüberweisung, iDeal, Giropay or Klarna. Normally, one works with a payment service provider that handles the processing of the various payment methods for the merchant. These providers are, for example, Stripe, Payone or Concardis. However, none of them support bitcoin payment processing in addition to the usual payment methods. If you are already working with a payment service provider for other payment methods, ask if they also accept Bitcoin. So far, we don’t know of any traditional payment service provider that accepts bitcoin. If you know of anyone, please let us know in the comments.
Bitcoin Payment Provider
Those who want to accept Bitcoin have to use a payment provider for crypto payments such as Coinbase, Bitpay, Opennode or Coinpayments, as they are specialized on this. However, this seems to contradict the principles of Bitcoin as a “peer-to-peer electronic cash system” where payments can be transferred directly between sender and receiver. No middleman. This raises questions. Why does Bitcoin still require a payment processor and can’t we handle it ourselves? What are the functionalities of classic payment providers for fiat currencies?
Services of a “fiat” payment provider
In order to accept payments by credit card, PayPal, etc. in his store, a merchant must sign a contract with a payment provider. For this purpose, similar to a bank, he must submit a number of documents, including an extract from the commercial register, business registration, tax number, bank statement and consumption bill, as well as IDs of the main shareholders. In addition, the business model must be explained and comply with the specifications of the payment method (can also be rejected). There are often fees starting from 2.5% of the turnover as well as a transaction fee.
If a business model is classified as High Risk or Micro Payment, the fees may be higher. The merchant receives immediate notification if a payment was successful, but the purchase amount is paid out later. In some cases, a security amount may also be withheld in case a chargeback occurs. A payment by credit card, Paypal, etc. is not final and guaranteed for the merchant, as there is a chargeback risk by the customer. The payment provider handles the technical payment processing, creates overviews and tries to reduce fraud.
The payment provider
- offers the merchant secure and fast payment processing,
- relieves the merchant from dealing with multiple banks, as the payment provider itself works with many banks,
- assists the merchant with compliance requirements, such as Know Your Customer (KYC), Anti-Money Laundering (AML) and data protection.
What is the difference between Bitcoin Payment Providers and BTCPay Server?
A BTCPay server allows you to be a Bitcoin payment provider yourself. However, if you want to receive Euros/Dollars instead of Bitcoin, you may prefer a Bitcoin Payment Provider. These can instantly convert Bitcoin funds into Euros/Dollars. This can be especially useful if one relies on fiat payments.
You also have to pay suppliers and employees and for certain reasons not everyone can accept Bitcoin, even if you are a convinced Bitcoiner. But if you assume that for the time being not everyone in the store will pay with Bitcoin, you can use BTCPay servers in most cases. Should it ever make sense for the merchant to sell BTC, he can still transfer it to a platform himself. Of course, a BTCPay server also offers monitoring and documentation of all transactions for accounting purposes.
|Business records, KYC and business model review.
|None or server cost of about $10 per month. No matter how many transactions.
|approx. 1% of the sales.
|Directly to your own Bitcoin wallet.
|Daily basis or when a certain amount is reached.
|No payout in dollars/euros. Forwarding to an exchange and change into fiat.
|Usually payout to your own bank account in fiat.
Do bitcoin payment processing by yourself?
The question arises whether you can do without these circumstances and approach payments via Bitcoin or Lightning yourself. This can be clearly answered with a “yes”. Payment processing can take place directly between the merchant and the customer; no middleman has to be involved. A merchant has the option to handle payment processing independently with the help of a BTCPay server and is thus not dependent on external payment service providers.
Be your own bank! Start accepting Bitcoin payments with 0% fees & no third-party!
With a BTCPay server, you can do your own Bitcoin payment processing and benefit from the following advantages
- No account opening required with verification of business documents.
- No monthly fees, disagio on turnover or transaction fee.
- Instant crediting of every payment to own Bitcoin wallet.
- No withholding of security amounts due to final nature of Bitcoin payments. No chargeback.
- Crediting of sales as Bitcoin to own Wallet with possibility to save or convert to Euro.
BTCPay Server offers security, privacy, independence and is free of charge.
What is the role of a BTCPay server in bitcoin payment processing?
When the customer chooses Bitcoin as a payment method, the checkout process starts, where he has to provide his address information if it is a mail order. The BTCPay server calculates the bitcoin amount the customer has to pay for the 100,- Euro based on the current bitcoin rate and creates a unique bitcoin address based on the merchant’s bitcoin wallet. This address becomes a payment purpose and a QR code is created, which is displayed to the payer in a payment window and contains the bitcoin amount and the bitcoin address.
A user can make the Bitcoin payment by scanning this QR code and using their own Bitcoin wallet. The BTCPay server monitors the payment process on the blockchain and informs the online store once the payment is successful. The received Bitcoins are credited directly to the merchant’s wallet. The merchant can access the Bitcoins immediately, but may have to wait for six confirmations from the blockchain. There are no fees for the merchant and no settlement by a payment service provider is required. After that, the merchant can proceed as usual if a successful purchase has taken place in his store.
How to get a BTCPay server?
What are the requirements for a merchant to run their own BTCPay server and process bitcoin payments themselves? There are several options.
Sharing a BTCPay Server
If you do not want to run your own BTCPay server, you can share an existing BTCPay server. On a BTCPay server you can run an unlimited number of BTCPay stores. There are a few sources that offer sharing on a BTCPay server as a service. BTCPay Server itself offers a directory where the different providers are collected.
If you are running your own Bitcoin/Lightning node on a hardware node like Umbrel or Raspiblitz, you already have a BTCPay server running. These hardware nodes are usually on your own network and are ideal for running as a node. However, in order to use the BTCPay Server, you need to enable external access via the Internet so that your online store can communicate with the BTCPay Server. Although this is technically possible, the implementation is rather demanding and is more suitable for technically experienced node users.
Own hosting (rented server)
If you rent a server from a hosting provider instead, it will usually already be equipped with an operating system and network connections. You will then only need to install and configure the BTCPay server on it. This is usually easier than setting up your own hardware node, but it depends on your technical skills and the hosting provider you choose.
For those who are overwhelmed with the options described above, we recommend using a BTCPay server with the hosting provider Lunanode. Lunanode offers its own BTCPay server for less than $10 per month.
BTCPay Server advantages at a glance
- Third-party independence: you have full control over your cryptocurrency transactions and do not rely on third-party services.
- Cost savings: Since you don’t have to pay fees to payment service providers such as PayPal or credit card companies, you can achieve significant cost savings.
- Privacy: Since you don’t have to share your data with third parties, your privacy remains protected.
- Integration with Lightning Network: BTCPay Server is fully compatible with the Lightning Network, enabling fast and affordable transactions.
- Easy management: With a user-friendly interface, you can easily manage and configure your BTCPay Server.
- Numerous store modules such as Shopware, WooCommerce, Shopify, Drupal, Magento and PrestaShop.
- Numerous applications available
- No Know Your Customer (KYC) / no identity check
BTCPay Server is an open-source, self-hosted payment processor for Bitcoin. It provides businesses and individuals with control over their crypto transactions without relying on third-party services. Using BTCPay Server can provide significant cost savings over traditional payment service providers and protect privacy. It is also easy to manage and integrates with the Lightning Network for fast and low-cost transactions. It is suitable for e-commerce, retail stores and other online merchants.Read More