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More Business want to accept bitcoin payments. Lowe fees, no chargebacks, instant settlement, and customers all over the world. On paper it is an easy yes.
In practice, it is not.
I am Prashant Chandrashekar, founder of Bringin, a Bitcoin technology company. I have worked with accountants in the EU and the US. And I have had many conversations with businesses that joined our business pilot. The same five problems come up every time.
It is rarely the bitcoin itself. It is the banking, the tooling, the accounting, the tax treatment, and the custody around it. Whether you want to accept bitcoin at a coffee shop, auto-convert it to Euro, or hold it on your balance sheet, these five problems are what actually get in the way.
Here they are, based on real experience.
1. Banking Breaks
This, of course, is the most common problem, especially for businesses. If you are making transfers to exchanges to buy or sell bitcoin, you can expect a series of questions from your banks, or, worse, they may suspect you of providing crypto exchange services for your clients and may block your account.
This is a nightmare we as a bitcoin company were not spared with. We could not get an account on Revolut since we had bitcoin on our website and could not produce license documents. No way to communicate that we rely on our partners to provide services. Of course, they won't spend time reading your terms and conditions or chatting with you. They are too big to bother about small coffee shop owners or risky crypto apps.
2. Accepting Is Just Unclear
Businesses want to accept bitcoin and have a cleaner accounting trail, with auto-offramp to Euro in some cases.
But they are confronted with setting up a BTCPay instance or dropping an NWC string or a Lightning address into a payment tool.
A Lightning address or NWC string is not as common as a bank's IBAN. Still, they need to get one reliable Lightning setup.
But a business wallet is not a WOS you spin up for your friend to have their first sat. It should support Lightning, have liquidity, support good statement exports, be able to plug into existing account tools, and be either self-custody or compliant.
Even if you have an easy custodial wallet for your business, you are confronted with adding additional details to all the deposits from clients as part of the travel rule, which makes it a nightmare to accept bitcoin in a coffee shop for 10 euros.
3. Accounting Breaks
Even if you manage to accept bitcoin, your accountant finds it incredibly hard to account for this. Accounting for capital gains and losses also comes with rate changes from the time of accepting and using this bitcoin.
Obviously you'll be using tools that will either not give a great export that you could use or plug into accounting software.
You'd need to hire crypto-expert accountants!
4. Taxes
You accept bitcoin, but you are not sure how this is treated from a tax perspective. If you auto-sell this incoming bitcoin to Euro, would the capital gain be 0 as you earned and instantly converted? Or does the first-in, first-out logic apply, where you'd need to worry about when you first bought bitcoin to your wallet ages ago?
It is not the willingness to pay taxes; it is the knowledge of how to declare capital gains that come with bitcoin payments compliantly.
5. Business Custody Is Not Personal Custody
When you have multiple operators in an organization, or a bigger company where people have access to funds to spend on materials and services, you'd need governance and access controls for the funds.
This gets way more complicated with a self-custody wallet for business.
The Bottom Line
Bitcoin works. It's a free network, so you get cheaper payments, instant settlements, and global acceptability.
All of these factors are a win for a business. But the banking, tooling, and process around it doesn't work. It does not make sense with all this friction.
Bringin for Business is coming in August.
If any of these five is your problem: DM me on Linkedin or Twitter
Or fill the form here: Bringin Business
