Merchant FAQ

Common questions for an uncommon industry

Is it legal to accept Bitcoin?
Yes.  Accepting Bitcoin as a method of payment is completely legal in the USA and Canada. However, unlike USD or CAD dollars, there are restrictions on what you can do with your Bitcoin once you receive it. Of course it’s yours to spend anywhere in the world you like and it’s yours to convert to USD or CAD at any time you desire but the government does not want you offering up your bitcoin to the public in exchange for dollars. Any business offering to exchange Bitcoin for CAD/USD dollars requires oversight by various government agencies including FINTRAC (Financial Transactions and Reports Analysis Centre of Canada ) and the USA based FinCEN (Financial Crimes Enforcement Network). Please note that New York State has a complex BitLicense.  Our clients are kept up to date on the latest compliance regulations. Talk to our integration team for more information.
Can I pay my taxes with Bitcoin?
Yes. You would first need to convert your Bitcoin to your local currency.
Can I exchange or sell bitcoin for cash to my customers?


In order to exchange bitcoin for local currency Canadian businesses are required to register as a money service business (MSB) with Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Complete the pre-registration form here.

In the USA you must register with the Financial Crimes Enforcement Network (FinCEN) using the Money Services Business (MSB) registration.  Money Services Business Definition

New York State has the most restrictive set of virtual currency regulations. The BitLicense is a comprehensive set of rules governing all New York State residents and business.

“The regulations are limited to activities involving the state of New York or a New York resident. People residing in, located in, having a place of business in, or conducting business in the State of New York count as New York Residents under these regulations.” 

Section 200.3 of the NYSDFS BitLicense clearly exempts merchants who wish to accept bitcoin and consumers who wish to use it.

Section 200.3 License

(c) Exemption from licensing requirements. The following Persons are exempt from the licensing
requirements otherwise applicable under this Part:

(2) merchants and consumers that utilize Virtual Currency solely for the purchase or sale of goods or
services or for investment purposes.

What do I do if I sell products that are priced less than one Bitcoin?
No problem at all. Each Bitcoin can be divided in the same way a dollar can be divided.

A single Bitcoin can be divided to 8 decimal points. “0 .00000001”  – A dollar can be divided to 2 decimal points “0.01”

This make Bitcoin perfect for micro-payments otherwise known as “Tipping”. Bitcoin can be used to tip bloggers, online forums, Reddit, musicians, Twitter, YouTube and anywhere people want to be shown appreciation. Let us help you get set up to accept bitcoin tips.

Can I pay my staff with Bitcoin?
Yes. There are few companies supporting payroll. Bitwage currently offers payroll integration and payment processor BitPay offers payroll payment services.  Talk to us. We can help you get set up.
In the event of a refund, and if the value of Bitcoin has changed since the original transaction, do I refund the same Bitcoin amount?
So you sold your item for Bitcoin and the value of that item was derived from it’s USD or CAD value. So it would be only smart to establish a Refund Policy that reflects the exchange rate at time of return.  An example would be if you sold a WIDGET for 1.0 Bitcoin. The price for 1.0 bitcoin at time of sale is USD $5,000.00. Your customer wants to return the WIDGET 14 days later and the price of Bitcoin is USD $4,000.00.  Your customer would be entitled to a refund of USD $4,000.00 or the equivalent in (fewer) Bitcoin. We would recommend that you clearly indicate this policy on your sales invoices and in your ToS (Terms of Service). Talk to our integration team about how to best manage these scenarios.
Can I refund Bitcoin the same way I refund cash?
There is no refund mechanism built into Bitcoin. Providing your customers with a refund would be as simple as sending Bitcoin to them from your wallet. It would be the same as refunding a cash purchase.
Do I pay merchant transaction fees?
Yes, and No. When the merchant is paid directly in Bitcoin, there are no transaction fees at all. The payer (your customer) pays the very small network transaction fee when they send you Bitcoin (initiate the transaction). However, if the transaction is facilitated by a payment processor, there will be fees and they will depend on account type and sales volume.  Traditionally the fees at Bitcoin payment processors are considerably lower than conventional credit card fees. Speak with one of our integration specialists for more information.
Do I require a special license to accept or handle Bitcoin?
No. You do not require any special license to accept or handle Bitcoin. Talk to our integration team about best-practices and local compliance.
Can Bitcoin be converted to regular currency like USD or CAD?
Yes. Using a Bitcoin Exchange or other services it can easily be converted. Let our integration team present you with all the available options.
What are key considerations when adding Bitcoin as payment method?
One of the greatest considerations is how your current customers may perceive this decision. Followed closely by your banking partners and vendors.  Bitcoin has a bad reputation and in recent times has been portrayed as the go-to currency for drug dealers and hit-men. Hanging the all-to-recognizable WE ACCEPT BITCOIN sign in your window will not only bring a great deal of attention to your business, it will beg questions from your customers, vendors and financial partners. Promoting your strict AML/KYC (ANit-Money Laundering / Know Your Customer) policy will be confidence building for all concerned.
Is the BITCOIN PUBLIC KEY and PRIVATE KEY like my house key?

No. PUBLIC and PRIVATE KEYS are simply long strings of numbers and letters. The PUBLIC KEY – which you can openly share – is like a bank account number. The PRIVATE KEY is also a long string of numbers and letters and would be akin to a secret password. Anyone who knows the secret passord can access your “bank account”. From anywhere.

Is my bitcoin insured against theft or loss?

No. With bitcoin, your are the bank. Bitcoin is like cash. With cash, if someone pulls it out of your pocket or you forget where you put it, it’s lost. If someone finds your PRIVATE KEY or hacks your computer or you forget where you stored your PRIVATE KEY, your bitcoin is lost.

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