Key Takeaways
- Crypto payment services may offer lower processing fees than traditional card schemes; although this can vary.
- Blockchain transactions are usually irreversible; which can reduce chargeback disputes but also makes mistakes harder to fix.
- Some payment processors allow businesses to accept crypto but settle instantly in local currency; which can help manage price volatility.
The economic case for crypto payments: Some merchants see crypto payments as a way to improve efficiency and reduce certain costs; however, this is not guaranteed. Fees, settlement times and risks can differ widely depending on the provider, the asset and the network used.
Traditional card payments and bank transfers usually involve several intermediaries; each adding delay, cost and potential points of failure. Crypto payments can reduce the number of intermediaries; although they introduce new risks such as price volatility and regulatory uncertainty.
Reduced transaction fees
Card payments typically cost businesses around 2–3% per transaction; some crypto payment processors claim lower fees, and certain wallet-to-wallet payments may cost pennies depending on the network.
Lower fees are possible; but not guaranteed. Blockchain fees can spike during congestion; some networks are more expensive than cards; and additional charges (FX, withdrawal, conversion) may apply.
Fewer chargebacks, different risks
Card chargebacks can be costly for merchants. Blockchain transactions, once confirmed, are generally irreversible; which can reduce chargeback disputes.
Blockchain transactions are irreversible. However, irreversibility also means mistaken payments are harder to correct; customers may also have fewer protections versus regulated card rails.
Access to international customers
Crypto payments can reduce friction in cross-border commerce by avoiding currency conversion fees and long settlement times.
Merchants must still consider FX costs when converting into GBP; sanctions restrictions; and regulatory obligations in all relevant jurisdictions.
How accepting crypto works in practice
Most businesses use a crypto payment processor rather than holding wallets themselves. These services act like a crypto-equivalent of a card terminal; sitting between the buyer’s wallet and your business bank account.
These processors typically:
- Generate a payment request or QR code for the customer;
- Monitor the network for confirmation; and
- Optionally convert the received crypto to GBP and settle to your bank account.
Using a payment processor reduces technical burden; but you must rely on their security, solvency and operational reliability.
Managing price volatility
Many gateways offer automatic conversion. For example, converting £100 worth of Bitcoin into GBP at the time of payment.
This reduces exposure; but relies on the processor’s timing, exchange spreads and operational reliability. If you opt to hold crypto; be prepared for accounting and tax complexity.
Integration options
Crypto payment processors usually provide:
- E-commerce plugins for common platforms;
- Invoicing tools that generate payment links or QR codes;
- Point-of-sale apps for in-store QR payments.
Test any integration thoroughly; validate reconciliation flows; and ensure staff know how to handle refunds and disputes.
Risks and red flags to consider
Cryptoassets as a payment method are high-risk; and carry regulatory, tax and operational complications.
Regulatory and compliance issues
The regulatory landscape is evolving in the UK. Firms that exchange or custodise crypto may need to register for AML/KYC with the FCA. Merchants should check whether their chosen processor is compliant.
Tax and accounting complexity
If you receive GBP settlement; bookkeeping is easier but still requires transaction-level records. If you hold crypto; each disposal may be a taxable event under HMRC rules.
Technical and operational dependence
Using a third-party processor introduces platform risk, outages; API failures; or insolvency can disrupt payments. Managing wallets directly eliminates that third-party dependency; but requires secure key management; backups; and strict internal controls.
The future direction of business payments
Growing role of stablecoins
Stablecoins are designed to reduce volatility; and may suit cross-border payments; but they are not risk-free. Their stability depends on issuer reserves and governance.
Layer-2 networks and lower-cost payments
Layer-2 solutions (for example, Lightning-style networks) aim to reduce fees; and increase speed for small payments. They can make low-value crypto payments practical; but add technical complexity and counterparty considerations.
Key takeaways for UK businesses
Accepting Bitcoin and other cryptoassets can offer potential advantages: Wider payment choice; possible fee savings; faster cross-border settlement; and fewer chargebacks : but those benefits are not guaranteed.
Before enabling crypto payments, businesses should:
- Assess whether their customer base will meaningfully use crypto;
- Compare total costs (fees; FX; conversion; integration; reconciliation) with current payment rails;
- Understand regulatory; tax; and accounting implications;
- Verify the security; resilience; and regulatory status of any processor;
- Decide whether to hold crypto or convert immediately into GBP; and document that choice -Consider the Travel Rule, which requires processors to collect and share customer information for crypto transactions above certain thresholds.
Cryptoassets are high-risk; complex products. Only accept or hold them if you understand the risks; and they suit your cash flow and risk appetite.
CoinJar
CoinJar is one of the longest-running cryptocurrency exchanges in the world. Since 2013, we’ve helped hundreds of thousands of people worldwide to buy, sell and spend billions of dollars in Bitcoin, Ethereum and dozens of other cryptocurrencies.
Read full bio
