How Square’s Bitcoin move will change online transactions

Important points

• Square enables 4 million merchants to accept fast, low-fee Bitcoin payments through the Lightning Network.

• This development makes Bitcoin a viable checkout option for instant payments and no fees until 2027.

• Bitcoin payments can increase customer choice, reduce costs, and streamline cross-border transactions for online sellers.

• Merchants must consider volatility, compliance, irrevocable payments, and customer adoption before integrating Bitcoin.

Block, the payments infrastructure company led by Jack Dorsey, has introduced a Bitcoin payments platform through Square. With this rollout, Square’s U.S. merchant network, which includes approximately 4 million businesses, will be able to accept Bitcoin (BTC) and will gradually expand availability.

This development is important because it helps move Bitcoin from a specialized asset primarily used for long-term holdings to a practical option for everyday transactions. In online commerce, offering additional payment methods is essential to staying competitive.

This article explains how this feature works and what it means for online and omnichannel sellers. We also consider how it may impact the broader payments industry and the factors merchants should consider.

Bitcoin payments for businesses via the Lightning Network

Block offers this service as a simple and integrated Bitcoin payment and wallet solution for businesses, allowing merchants to receive payments in Bitcoin.

The process is simple. A Lightning bill quick response (QR) code is generated at checkout, customers pay using a compatible wallet, and funds are cleared instantly. This provides merchants with an efficient and low-friction alternative payment method.

The main elements are:

• Merchants can accept Bitcoin at checkout using Square’s POS system. Transactions are made via the Lightning Network, guaranteeing near-instantaneous settlement.

• No processing fees will apply to Bitcoin transactions until at least 2027.

• Merchants can choose to convert a portion of their daily card sales into Bitcoin and treat it as a type of savings or investment.

• Payment options allow merchants to receive funds in Bitcoin or automatically convert them to fiat currencies such as USD.

Did you know? Unlike traditional banking systems, which are closed on weekends and holidays, cryptocurrency payments occur continuously. This 24-hour availability makes it ideal for global e-commerce and time-sensitive transactions.

Business case for Bitcoin payments

As digital commerce evolves, the business case for adopting Bitcoin payments is focused on leveraging the speed and efficiency of the Lightning Network. This improves the checkout experience and potentially unlocks new operational cost savings.

• Expanding payment options: Online sellers aim to minimize checkout hurdles and accommodate as many buyers as possible. Adding Bitcoin will allow customers accustomed to platforms like Coinbase to use their preferred payment method. Square is already integrated with millions of online sellers, so the additional effort required for implementation is minimal.

• Cost and payment benefits: Lightning Network enables fast payments. There are no fees in the initial period, which can reduce your overall payment costs compared to standard card fees.

• Financial and currency management flexibility: Sellers can keep their proceeds in Bitcoin if they expect the price to appreciate or if they want to convert it to fiat immediately. This provides financial versatility, especially for companies serving international or crypto-oriented customers.

• Reputation and brand positioning: Accepting Bitcoin can create innovation and attract crypto enthusiasts. This can be a competitive advantage for online sellers. However, there is also potential reputational risk if customers are not familiar with cryptocurrencies or are concerned about price fluctuations.

Did you know? While card payments can take 1-3 days to clear, Bitcoin Lightning and stablecoins can clear in seconds. This speed allows merchants to avoid cash flow delays, reduce chargeback issues, and gain instant access to working capital.

How this platform will shape online payments

Square’s solution, designed to handle conversions efficiently, is likely to drive early adoption, especially among small and medium-sized businesses. Traditional card networks may face increased competition as merchants seek alternatives.

Cryptocurrency networks operate around the world and have the potential to reduce dependence on intermediaries and reduce foreign exchange costs. It also speeds up payments for merchants with international customers. Simplifying cross-border Bitcoin payments could open up access to new markets.

Integration with Square’s platform provides unified reporting across crypto and fiat transactions for improved analysis, reconciliation, and operational efficiency. Future developments may include subscription services, loyalty programs, and invoicing built on cryptocurrency infrastructure.

What sellers need to consider

Before adopting Bitcoin payments, merchants should weigh several factors to ensure a seamless and sustainable transition to crypto-based transactions.

• Price fluctuations and settlement decisions: Holding Bitcoin exposes sellers to market fluctuations. A sudden drop in prices can hurt profitability, especially for companies with low profit margins. Merchants must decide whether to keep their Bitcoins or opt for instant payment.

• Regulatory and tax requirements: Cryptocurrency trading comes with evolving regulations. Distributors may face complex accounting procedures, increased tax filings, and additional compliance obligations, especially in cross-border operations.

• Customer acceptance and experience: Success depends on customers’ willingness to use Bitcoin. Sellers need to ensure a seamless checkout process and strong customer support. Customers may have questions about wallet compatibility and transaction clarity.

• Irrevocable Bitcoin transactions: Unlike card payments, which allow chargebacks, Bitcoin transactions are irreversible. Merchants need to establish clear refund policies and manage different risk profiles while ensuring smooth integration.

Did you know? The Lightning Network is designed for instant, low-cost payments, making Bitcoin practical for everything from online shopping to streaming-based pay-as-you-go services.

A catalyst for change in the merchant payments sector

Block’s introduction of Bitcoin payments through Square could change the way online and omnichannel merchants pay. By offering near-instant payments through the Lightning Network and initial fee-free processing, Square provides a reliable alternative to traditional methods.

However, successful Bitcoin payments require careful consideration of customer preferences, volatility risks, regulatory obligations, and operational readiness. Distributors who strategically adopt this option can gain competitive advantages, including access to new markets, lower costs, and expanded global reach. For many companies, accepting Bitcoin may soon move from an optional feature to an important strategic decision.