A Bitcoin Payment Gateway Reduces Online Store Transaction Fees by 70%
Wondering how to accept crypto payments as a business? You're not alone. Globally, an estimated 1 billion people use cryptocurrencies , creating a massive potential customer base for forward-thinking merchants. With an average of 378,000 Bitcoin transactions occurring daily , digital currency has evolved from a speculative investment into a legitimate payment method.
Furthermore, the cryptocurrency market now represents approximately $2.41 trillion in total capitalization , demonstrating its significant economic impact. In this article, we'll explore how a new Bitcoin payment gateway is slashing transaction fees by 70% for online retailers, and what this means for your business. Additionally, we'll cover how to accept crypto payments as a business in the UK, where specific regulations apply. Given that cryptocurrency payments are projected to increase at a 17% compound annual growth rate through 2030 , now might be the perfect time to integrate this payment option into your store.
Bitcoin Payment Gateway Slashes Fees by 70% for Online Retailers
A dramatic shift is occurring in online payment processing as new Bitcoin payment gateways slash transaction fees by up to 70% compared to traditional methods. This reduction presents a significant opportunity for merchants seeking to maximize profit margins while tapping into the growing cryptocurrency market.
What the fee reduction means for merchants
Traditional payment processors and credit card companies typically charge businesses between 2% and 4% per transaction [1], while some can reach as high as 5% of the transaction value [1]. In 2024 alone, U.S. companies paid approximately $187.20 billion in credit-card swipe fees [2]. Moreover, card fees for U.S. merchants have increased nearly 70% since the pandemic [2].
In contrast, Bitcoin payment gateways now offer dramatically lower fees:
Some Bitcoin payment gateways charge less than 0.5% [1]
Crypto payment processors can reduce fees to as low as 0.5% or even less [2]
Recent implementations have shown transaction fees plummeting to just 0.1 satoshi per virtual byte [3]
For merchants processing high volumes of transactions, these savings can be substantial [1]. A business switching to crypto payments can potentially reduce payment fees by up to 70% on payment processing alone [2]. This allows businesses to either reinvest in growth or pass savings on to customers.
The benefits extend beyond just cost savings. Crypto transactions settle in minutes rather than days [2], providing e-commerce stores with immediate access to capital. Importantly, Bitcoin transactions are irreversible, eliminating the risk of chargeback fraud [2] – a significant concern for online retailers.
Which platforms are affected by the change
Several major platforms are leading this fee reduction movement:
PayPal recently unveiled its 'Pay with Crypto' feature, which charges just 0.99% per transaction – representing a reduction of up to 90% compared to international credit card processing [4]. The system supports over 100 cryptocurrencies including Bitcoin, Ethereum, USDT, and others [3], connecting merchants to a market worth over $3 trillion [3].
Other platforms implementing similarly reduced fees include:
Bitwage, which charges only 0.50% + $0.50 for a $10,000 invoice – keeping an extra $299.50 in the merchant's pocket compared to traditional payment methods [2]
CoinRemitter, charging less than 0.5% [1]
Various blockchain payment gateways offering fee reductions that can save merchants up to 70% in processing fees [5]
Boston Consulting Group estimates that permissioned-DeFi payment rails can run 60-80% cheaper than correspondent-bank models for cross-border payments [2]. This is particularly beneficial for companies conducting international business.
The impact is especially meaningful for small businesses with thin margins. For these merchants, every percentage point in fee reduction directly improves profitability. Consequently, more than 6,000 businesses now accept bitcoin as a payment method, according to estimates from early 2024 [6], with adoption continuing to grow as merchants recognize the competitive advantage of offering cryptocurrency payment options.
How the New Gateway Works to Reduce Transaction Costs
The technology behind the new Bitcoin payment gateway represents a fundamental shift in how online transactions are processed. Understanding this technology reveals why these systems can drastically cut costs for merchants.
What is a Bitcoin payment gateway?
A Bitcoin payment gateway functions as an online payment processing system that enables merchants to accept cryptocurrency payments for products or services [7]. These specialized platforms serve as intermediaries between customers paying with digital assets and businesses receiving crypto payments [5]. Unlike traditional payment systems, Bitcoin gateways operate on blockchain technology, allowing direct peer-to-peer transactions without relying on centralized financial institutions [8].
Essentially, these gateways act as a bridge between two transacting parties, with the key difference being that crypto transactions require a wallet and ownership of digital assets for processing [5]. When a customer makes a purchase, the gateway facilitates the transfer, verification, and settlement of cryptocurrency payments, often with the option to convert received crypto into traditional currency [5].
How blockchain enables lower fees
Blockchain technology fundamentally transforms the economics of payment processing through several key mechanisms:
First, blockchain eliminates multiple intermediaries typically involved in traditional payment systems. While conventional transactions require banks, card networks, and payment processors—each charging their own fees—blockchain transactions settle directly between parties [9]. This peer-to-peer structure removes costly middlemen from the equation [10].
Second, the validation process differs significantly. In blockchain systems, transaction validators verify blocks and transactions, receiving small increments of cryptocurrency as compensation [11]. This process typically costs just cents, compared to percentage-based fees in traditional systems [9]. For example, transactions on networks like Bitcoin Lightning or Solana can cost under $0.01 [9].
Third, blockchain's decentralized nature provides enhanced security without the overhead costs of traditional security systems. The immutable ledger creates strong audit trails [8], making fraud attempts extremely difficult and expensive [3]. As one document notes, "In Bitcoin's 10-year track record, no security flaw has ever been uncovered" [3].
Comparison with traditional payment processors
The cost difference between traditional and crypto payment systems is substantial:
Transaction fees: Traditional payment processors typically charge between 2% and 3.5% per transaction, plus fixed fees ranging from $0.20 to $0.30 [6]. In contrast, crypto payment gateways generally charge 1% or less [12], with some dropping as low as 0.5% [9].
Settlement speed: Traditional payments often take 2-14 days to settle completely, particularly for cross-border transactions [8]. Crypto payments typically process in real-time and complete in less than 10 seconds [7].
Chargeback costs: Traditional systems impose chargeback fees ranging from $1.50 to $3.00 per dispute [9]. Blockchain's irreversible transactions eliminate these costs entirely [13].
Cross-border efficiency: Traditional international payments incur forex and wire fees of 5-10% [9]. Crypto gateways charge the same low fee globally, regardless of borders [7].
Research indicates that businesses could have saved over $125 billion if they had used blockchain payments instead of credit cards for account settlements [13]. In fact, studies show that permissioned-DeFi payment rails run 60-80% cheaper than correspondent-bank models for cross-border payments [5].
For online merchants specifically, the adoption of crypto payment gateways translates to substantially improved profit margins through lower operational costs, instant settlements, and enhanced security [6]. These benefits ultimately make Bitcoin payment gateways an increasingly attractive option for businesses looking to optimize their payment processing costs.
What Online Stores Must Do to Start Accepting Bitcoin
Implementing Bitcoin payments requires several practical steps for online businesses. Although the technical aspects might seem daunting initially, the process has become increasingly streamlined as the cryptocurrency ecosystem matures.
Set up a crypto wallet or payment processor
The first step in accepting Bitcoin payments is establishing a secure method to receive and manage cryptocurrency. Online stores have two primary options:
Crypto wallets store and manage digital assets directly. Merchants can choose between:
Custodial wallets (hosted by third parties) that offer simplicity but less control [4]
Non-custodial wallets that provide full control but require safeguarding private keys [2]
Hardware wallets for maximum security of large amounts [2]
Payment processors offer a more streamlined approach, especially for beginners. These services handle the technical aspects of cryptocurrency transactions and often provide automatic conversion to traditional currency [4]. Popular options charge between 0.5% and 1% per transaction, significantly lower than traditional payment systems [14].
Integrate Bitcoin into checkout systems
Once you've established a wallet or processor, the next step involves incorporating cryptocurrency options into your existing checkout flow. Most e-commerce platforms now support Bitcoin integration through:
API integration allows businesses not built on e-commerce platforms to facilitate cryptocurrency payments with more flexibility and control [15].
Plugins and extensions offer the simplest path for established e-commerce platforms. Solutions exist for popular systems like WooCommerce, Shopify, OpenCart, and Wix [15].
During implementation, you'll need to decide whether to keep funds as cryptocurrency or automatically convert to traditional currency. Many payment processors offer immediate conversion to eliminate volatility concerns [4].
Ensure compliance with local crypto regulations
Prior to launching cryptocurrency payments, understanding regulatory requirements is essential. Legal considerations vary by jurisdiction and typically include:
KYC/AML compliance requires verifying customer identities and monitoring transactions for suspicious activity [16]. In most regions, businesses must implement "know your customer" procedures with government-issued IDs and address verification [14].
Licensing requirements vary by location and business activity. In the US, operators may need FinCEN MSB registration, state money transmitter licenses, or other specific permits depending on their activities [16].
Tax obligations must be carefully tracked, as cryptocurrency transactions create specific reporting requirements [4].
For UK businesses specifically, working with FCA-compliant payment providers is crucial to ensure regulatory compliance [16]. Meanwhile, staying updated on evolving regulations through credible sources helps businesses remain compliant as rules change [16].
By following these steps methodically, online stores can efficiently begin accepting Bitcoin payments while minimizing risks and technical challenges.
What Are the Pros and Cons of Accepting Bitcoin Payments?
Businesses considering Bitcoin as a payment option face both substantial benefits and significant challenges. Examining these factors helps merchants make informed decisions about cryptocurrency integration.
Pros: Lower fees, global reach, faster settlement
First of all, cost reduction stands as the most compelling advantage. Traditional payment processors typically charge businesses between 2% and 4% per transaction, whereas crypto payment gateways often reduce this to less than 1% [1]. These savings become substantial for high-volume merchants.
Security benefits are equally significant. Cryptocurrency transactions are final, eliminating chargebacks—a problem that costs businesses billions annually in fraudulent disputes [1]. Indeed, this "push" rather than "pull" payment method ensures only necessary transaction details remain with the customer [11].
Cross-border commerce becomes remarkably streamlined as Bitcoin payments enable:
Seamless international transactions without currency exchange fees [1]
Access to global customers without traditional banking restrictions [11]
Elimination of forex and wire fees that typically range from 5-10% [11]
Furthermore, transaction speed provides another compelling advantage. Bitcoin payments process within minutes, whereas traditional payment methods can take days to settle [5]. This improves cash flow for businesses requiring immediate access to funds.
Cons: Volatility, regulatory uncertainty, technical setup
Despite these benefits, price volatility presents a serious concern. In early 2025, Bitcoin's value dropped from USD 109,071 to around USD 80,000—a nearly 25% decline within a short period [1]. Such fluctuations can significantly impact received payments if not promptly converted.
Regulatory complexity creates additional challenges. The IRS classifies cryptocurrencies as property rather than currency [1], requiring businesses to report transactions as gross income based on fair market value when received [17]. Subsequently, this creates complex accounting requirements, as merchants must track each transaction's value on both receipt and conversion dates [5].
Technical barriers remain substantial for many businesses. Establishing digital wallets and navigating cryptocurrency exchanges requires specialized knowledge [1]. As a result, merchants may need to invest in employee training or external expertise [1].
On balance, merchant adoption continues growing as benefits often outweigh challenges. A survey of 2,000 senior executives found businesses are embracing digital currency payments to gain competitive advantages [18]. Nonetheless, successful implementation requires careful planning and risk management strategies.
How UK Businesses Can Accept Crypto Payments Legally
For UK entrepreneurs and business owners, the regulatory landscape around cryptocurrency payments has unique requirements that must be carefully navigated. Understanding these regulations is essential before implementing Bitcoin payment systems for your business.
Understanding UK crypto regulations
In the UK, HMRC does not consider cryptocurrency as money or currency. Instead, cryptoassets are treated as property [19]. This classification creates specific tax obligations for businesses accepting crypto payments:
Firstly, any income received in cryptocurrency must be recorded at its fair market value in GBP on the transaction date [19]. This amount must then be included in your accounts for Income Tax or Corporation Tax purposes.
Secondly, if you later sell or exchange the cryptoasset, you may trigger Capital Gains Tax (CGT) on any increase in value [19]. This creates a two-step taxation process unlike traditional payment methods.
Henceforth, HMRC expects businesses to maintain comprehensive records of each crypto transaction, including:
Date of transaction
Type and amount of cryptoasset
GBP value at transaction time
Transaction fees or costs [19]
Looking ahead, from 1 January 2026, cryptoasset service providers in the UK will need to comply with the OECD's Crypto-Asset Reporting Framework (CARF), which includes collecting and sharing client transaction data with HMRC [19].
Choosing FCA-compliant payment providers
The Financial Conduct Authority (FCA) serves as the principal regulatory body overseeing crypto businesses in the UK [10]. Not all crypto activities require FCA authorization, though.
If you're simply accepting cryptoassets like Bitcoin as payment for goods or services, you are usually not required to register with the FCA - provided you're not facilitating trades, holding crypto on clients' behalf, or operating an exchange [20].
Nevertheless, for businesses that need to work with payment processors, choosing FCA-registered providers is critical. These providers have demonstrated compliance with Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) regulations [21].
At this point, it's worth noting that cryptocurrency marketing is also regulated. The FCA and Advertising Standards Authority (ASA) closely monitor how cryptoassets are advertised [20]. Any promotional materials must include appropriate risk warnings.
Best practices for small businesses in the UK
To implement crypto payments effectively while maintaining compliance, UK small businesses should follow these practical guidelines:
Invoice in GBP, not crypto: Always invoice in pound sterling, not in cryptocurrency. This avoids complications from fluctuating values and ensures clarity [22].
Consistent valuation method: Use reputable sources for crypto exchange rates when recording GBP values [19]. Maintain this approach consistently for all transactions.
VAT considerations: Cryptocurrencies themselves are generally exempt from VAT. However, the underlying goods or services you supply in exchange for crypto are still subject to VAT in GBP [19].
Separate trading vs. holding: HMRC distinguishes between capital gains and trading income. Most businesses fall under capital gains rules unless crypto trading is a core activity [19].
In effect, accepting cryptocurrency payments as a UK business is entirely feasible when these regulatory requirements are properly addressed. With appropriate record-keeping and tax compliance measures in place, British businesses can safely tap into the growing market of crypto-using customers while remaining on the right side of the law.
Conclusion
Bitcoin payment gateways have emerged as game-changers for online retailers, slashing transaction fees by up to 70% compared to traditional payment methods. This dramatic reduction offers businesses a compelling opportunity to improve profit margins while embracing the expanding cryptocurrency market. Additionally, merchants benefit from near-instant settlement times, elimination of chargeback fraud, and seamless cross-border transactions without currency exchange complications.
Nevertheless, businesses must carefully consider certain challenges before implementation. Price volatility remains a concern, though automatic conversion features from many payment processors can mitigate this risk. Regulatory frameworks continue to evolve, particularly for UK businesses where cryptoassets are treated as property rather than currency. Despite these considerations, the technical barriers to entry have significantly decreased as the cryptocurrency ecosystem matures.
Companies worldwide recognize these advantages. Therefore, we now see over 6,000 businesses accepting Bitcoin payments, with adoption rates steadily climbing. The projected 17% compound annual growth rate for cryptocurrency payments through 2030 underscores this payment method's growing legitimacy and popularity.
For online retailers looking to maximize profitability, Bitcoin payment gateways present a clear path forward. The technology fundamentally transforms payment economics by eliminating costly intermediaries while providing enhanced security features. Consequently, businesses that embrace these innovations now stand to gain competitive advantages through reduced operational costs and access to a billion-strong potential customer base.
As cryptocurrency continues its transition from speculative investment to legitimate payment method, forward-thinking merchants have an unprecedented opportunity to position themselves at the forefront of this financial evolution. The dramatic fee reductions offered by Bitcoin payment gateways undoubtedly make this technology worth serious consideration for any online business seeking to optimize payment processing and boost bottom-line results.
References
[1] - https://cointelegraph.com/news/crypto-payments-for-small-businesses-benefits-risks-and-how-to-get-started
[2] - https://bitcoin.org/en/choose-your-wallet
[3] - https://www.wisdomtree.eu/-/media/eu-media-files/other-documents/research/market-insights/market-insight-bitcoin-vs-traditional-payment.pdf?sc_lang=en-gb
[4] - https://www.paypal.com/us/brc/article/accept-crypto-payments
[5] - https://www.rivier.edu/academics/blog-posts/examining-the-pros-and-cons-of-bitcoin-for-small-business/
[6] - https://www.bitpace.com/blog/crypto-payment-gateways-vs-traditional-payment-gateways/
[7] - https://crustlab.com/blog/how-a-crypto-payment-gateway-works/
[8] - https://www.pinelabs.com/blog/the-rise-of-cryptocurrency-payment-gateways-are-they-the-future-of-online-transactions
[9] - https://litecointalk.io/t/how-do-crypto-payment-gateways-reduce-transaction-fees-compared-to-traditional-processors/78730
[10] - https://www.complycube.com/en/fca-compliance-for-uk-cryptoasset-firms/
[11] - https://www.chargebackgurus.com/blog/risks-cryptocurrency-payments
[12] - https://cryptoprocessing.com/learn/how-crypto-payment-gateways-work
[13] - https://b2binpay.com/en/news/bitcoin-vs-credit-card-transactions-how-much-do-you-save-with-crypto
[14] - https://www.ptolemay.com/post/how-to-integrate-crypto-payments-in-your-app-or-website
[15] - https://www.triple-a.io/blog/guide-to-accepting-crypto-for-your-business-in-2024
[16] - https://www.carltonfields.com/insights/publications/2025/crypto-business-compliance-us-licensing-and-regulations
[17] - https://www.uschamber.com/co/run/finance/accepting-cryptocurrency-as-payment
[18] - https://www.deloitte.com/us/en/services/audit-assurance/articles/corporates-using-crypto.html
[19] - https://www.cogencyaccountants.co.uk/accepting-crypto-payments-what-smes-in-salford-must-know-about-tax-and-accounting/
[20] - https://sprintlaw.co.uk/articles/is-cryptoasset-trading-regulated-in-the-uk-what-small-businesses-need-to-know-about-compliance/
[21] - https://www.fca.org.uk/firms/cryptoassets-information
[22] - https://www.collectiveconceptsaccounting.com/what-every-business-owner-needs-to-know-about-crypto-and-hmrc