Key conclusions

• Square enables 4 million merchants to accept quick and low-cost Bitcoin payments through the Lightning Network.

• The implementation turns Bitcoin into a practical option for executing transactions with immediate settlement and no processing fees until 2027.

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

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

Block, the payments infrastructure company led by Jack Dorsey, has introduced a Bitcoin payments platform through Square. The rollout gives Square’s U.S. marketplace, which includes approximately 4 million businesses, the ability to accept Bitcoin (BTC), and availability will gradually expand.

This development is significant because it helps transform Bitcoin from a specialized asset used primarily for long-term storage to a practical option for everyday transactions. In online commerce, offering additional payment methods is vital to stay competitive.

This article explains how this feature works and what it means for online and omnichannel retailers. It also examines how this could impact the wider payments industry and the factors merchants should consider.

Bitcoin payments for businesses via the Lightning Network

Block bills the service as a plain and integrated Bitcoin payment and wallet solution for businesses, enabling merchants to receive payments in Bitcoin.

The process is plain. At checkout, a Lightning Invoice Quick Response (QR) code is generated, the customer pays using a compatible wallet, and funds are cleared immediately. This gives merchants an competent, low-friction alternative payment method.

Key elements include:

• Merchants can accept Bitcoin at checkout using Square’s point of sale system. Transactions take place via the Lightning Network, ensuring near-instant settlement.

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

• Merchants may choose to convert a portion of their daily card sales to Bitcoin as a form of savings or investment.

• Settlement options allow sellers to receive funds in Bitcoin or automatically convert them to fiat currency such as the US dollar.

Did you know? Unlike customary banking systems that are closed on weekends and holidays, cryptocurrency payments operate continuously. This 24/7 availability makes them ideal for global e-commerce and time-sensitive transactions.

The business case for Bitcoin payments

As digital commerce evolves, the business case for adopting Bitcoin payments centers on leveraging the speed and efficiency of the Lightning network. It has the potential to improve the quality of transaction execution and unlock fresh operational savings.

• Expansion of payment options: Online sellers strive to minimize checkout barriers and serve as many buyers as possible. Adding Bitcoin allows customers familiar with platforms like Coinbase to employ their preferred payment method. Since Square is already integrated with millions of online merchants, implementation requires minimal additional effort.

• Billing costs and benefits: The Lightning Network makes it uncomplicated to settle quickly. No upfront fees can lower your overall payment costs compared to standard card fees.

• Flexibility in financial and currency management: Sellers can keep their proceeds in Bitcoin if they expect it to appreciate or immediately convert it to fiat currency. This provides treasury versatility, especially for companies serving international or cryptocurrency-focused clients.

• Brand reputation and positioning: Bitcoin acceptance can promote innovation and attract cryptocurrency enthusiasts. It can serve as a competitive advantage for online sellers. However, it also carries potential reputational risks if customers are unfamiliar with cryptocurrency or are concerned about price volatility.

Did you know? While card payments can take one to three days to settle, Bitcoin Lightning and stablecoins can settle in seconds. This speed helps merchants avoid cash flow delays, reduce chargeback hassles, and gain immediate access to working capital.

How this platform could shape online payments

Designed to handle conversions efficiently, Square can encourage early adoption, especially among diminutive and medium-sized businesses. Classic card networks may face increased competition as merchants look for alternatives.

Cryptocurrency networks operate globally and reduce reliance on intermediaries, potentially lowering currency exchange costs. They also speed up settlements for merchants with international customers. Simplified cross-border Bitcoin payments could open access to fresh markets.

Integration with the Square platform provides unified reporting for cryptocurrency and fiat transactions, improving analytics, reconciliation and operational efficiency. Future developments may include subscription services, loyalty programs and invoicing based on cryptocurrency infrastructure.

What traders need to consider

Before accepting Bitcoin payments, merchants must consider several factors to ensure a velvety and sustainable transition to cryptocurrency transactions.

• Price volatility and settlement decisions: Holding Bitcoin exposes sellers to market fluctuations. A piercing price drop can hurt profitability, especially for businesses with tight margins. Sellers must decide whether to hold the Bitcoin or opt for instant settlement.

• Regulatory and tax requirements: Cryptocurrency transactions involve changing regulations. Merchants may face sophisticated accounting, increased tax reporting and additional compliance obligations, especially when operating cross-border.

• Customer acceptance and experience: Success depends on customers’ willingness to employ Bitcoin. Merchants must ensure a velvety checkout process and powerful customer service. Customers may have questions about wallet compatibility and transaction transparency.

• Irreversible Bitcoin Transactions: Bitcoin transactions are irreversible unlike card payments which allow chargebacks. Merchants must establish clear returns policies and manage a different risk profile while ensuring seamless integration.

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

A catalyst for change in the trade payments sector

Block’s introduction of Bitcoin payments through Square could change the way online and multi-channel merchants handle payments. Offering near-instant settlement through the Lightning Network and free initial support, Square provides a credible alternative to customary methods.

However, success with Bitcoin payments requires careful consideration of customer preferences, volatility risks, regulatory obligations and operational readiness. Resellers who strategically adopt this option can gain competitive advantages, including access to fresh markets, reduced costs and greater global reach. For many companies, accepting Bitcoin may soon go from an optional feature to a key strategic decision.