Given that we are a crypto-processing platform,
providing software for automating cryptocurrency payments, this article
is primarily oriented towards e-commerce businesses that have chosen
the path of automating cryptocurrency payment acceptance. However, the
provisions outlined here can also be useful for e-commerce businesses
that manually process payments independently.
To accept payments in cryptocurrencies, it may be necessary to include an appropriate provision in the Terms of Use, Offer, or other agreement with the buyer in connection with e-commerce sales.
In this article, we will explore key provisions of the cryptocurrency clause in your online store's documents, such as defining prices in cryptocurrency, expenses related to cryptocurrency transactions, refund procedures for cryptocurrency payments when a customer returns a product and provide wording for your practical implementation.
The provisions outlined in this article can be incorporated into your existing legal documents, such as your Terms and conditions, offer, and other documents, by adding a relevant section, which we will hereafter refer to as the 'cryptocurrency clause'.
Follow
the provisions of our Сryptocurrency clause, as it will guide you
through the key processes of accepting payments in cryptocurrency.
Key elements of Cryptocurrency clause
- Acceptance of Cryptocurrency Payments:
In your website's documents, it should be clearly state that your
online store accepts specific cryptocurrencies as a valid method of
payment. Specify which cryptocurrencies you accept.
Using the Bcon cryptocurrency payment service this provision can be formulated as follows:
«Acceptance of Cryptocurrency Payments
(a) [Your Company Name] ("we," "our," or "the Company") is pleased to accept payments made using Bitcoin (BTC) and Binance Coin (BNB) on the BEP-20 blockchain ("Cryptocurrencies") as a valid method of payment for the purchase of our products ("Goods").» - Payment Process:
Explain the process for making payments using cryptocurrencies,
including selecting the cryptocurrency payment option, wallet address,
and any other necessary steps. The most convenient way to accept
cryptocurrency payments is to use ready-made solutions that automate the
payment process, providing your customers with the ability to pay for
products quickly and easily, while allowing you to receive payments and
fulfill orders efficiently. The simplicity of this process is made
possible through automation, without which a 'manual payment acceptance
process' can complicate the payment procedure and eventually render
cryptocurrency payments ineffective.
The typical challenges of non-automated cryptocurrency payment acceptance in e-commerce include regular communication with the customer. This is because you'll need to manually provide them with information about the cryptocurrencies you accept, discuss which ones they can use for payment, furnish them with a wallet address capable of receiving that currency, specify the cryptocurrency amount, and associate this payment with a particular customer order. This process is already time-consuming and becomes even more cumbersome when dealing with multiple customers concurrently.
The provisions regarding the procedure for cryptocurrency payments using automated Bcon crypto-processing for your client may be as follows:
«Payment Procedure (a) To make a payment using Cryptocurrencies, you must select the Cryptocurrency payment option during the checkout process.
(b) Once you select this option, an invoice information screen appears with the order number, payment amount, and unique wallet address to which you should send the required amount of Cryptocurrency within the specified time frame. The invoice also includes a QR code that you can scan for one-click payment.»
An automated system will assist in fetching the appropriate wallet for the selected cryptocurrency for payment, display the payment amount in the chosen cryptocurrency, and link this payment to the order number generated on your online store. - Returns and Refunds: Detail the procedure for refunds or returns when payments are made in cryptocurrency and any applicable terms and conditions.
General rules and conditions for returning products should be specified in your online store's Terms and Sales Policies, and we won't delve into them here separately. Let's focus on the process of refunding payment to your customer when all the return conditions specified in your Policies are met.
Common questions that arise for sellers when refunding cryptocurrencies include whether the refund should be in cryptocurrency or in the native currency, whether exchange rate differences should be taken into account due to the high volatility of cryptocurrencies, and how to physically initiate the refund.
The timelines for refunding cryptocurrency payments should align with the refund timelines specified in your website's Terms and Conditions, as required by the legislation in your jurisdiction. Therefore, in the cryptocurrency clause, we make a reference to the corresponding section of your Terms and Conditions.
You can access detailed information about a specific customer's payment in the Bcon user dashboard in the event of a refund request. This will save you from unnecessary processes of clarifying payment details.
When discussing the currency of the refund, whether it should be cryptocurrency or native currency, it should be noted that payments are typically refunded in the same currency in which they were made. In your case, this would mean refunding in cryptocurrency.
The question of exchange rate differences upon refund depends on how the product price in cryptocurrency is structured, whether it is linked to the price of the product in native currency or set in cryptocurrency. If the product price in cryptocurrency is linked to the price stated in native currency, then it will fluctuate over time based on exchange rate fluctuations.
Exchange rate differences are usually taken into account when the sale price was quoted in one currency but its value was determined based on the equivalent in another. We understand this example well, where in contracts, the price is stated in terms of the US dollar or euro equivalent but is paid in the national currency, which adjusts proportionally to the exchange rate of the reference currency (US dollar or euro).
Similarly, you can stipulate that in the case of payment for a product in cryptocurrency, the price of the product is determined with reference to the price stated in the native currency, and the payment amount in cryptocurrency is determined based on the exchange rate of the corresponding cryptocurrency to the native currency. In this scenario, the refund amount would also be proportionate to the fluctuating exchange rate of the linked native currency to the payment cryptocurrency. In the presence of such conditions for determining the price of a product in cryptocurrency, the cryptocurrency clause should specify the cryptocurrency exchange rate platform you will rely on when determining the product's cost and refund amount.
If your website lists a specific product price only in cryptocurrency, for example, 0.5 bitcoins, and you received the same amount, then the customer would be refunded with exactly 0.5 bitcoins.
In consideration of the above, the provisions regarding the refund of cryptocurrency payments when a customer returns a product may be as follows:
When determining the price of the product linked to the exchange rate of the native currency:
«Returns and Refunds (a) In the event of returning Goods, the refund will be processed in Cryptocurrency, equivalent to the cost of the Goods in the native currency, calculated based on the exchange rate of the cryptocurrency to the native currency as indicated on www._____________ on the day of the cryptocurrency return, in accordance with our Returns and Refunds Policy.
(b) The refund amount will be calculated based on the native currency price at the time of the refund, not the equivalent value in Cryptocurrency at the time of the original purchase.»
If the price is stated in cryptocurrency without being tied to the exchange rate of the native currency:
«Returns and Refunds (a) In the event of returning Goods, the refund will be processed in the same Cryptocurrency that was used for the original payment, in the amount equivalent to the Cryptocurrency value paid at the time the order was placed, in accordance with our Returns and Refunds Policy.» - Information about blockchain transaction costs
Blockchain transaction costs, also known as transaction fees, are charges associated with processing and validating transactions on a blockchain network. They serve to incentivize miners or validators, secure the network, allocate resources efficiently, and deter spam.
In most cases, the sender covers the fees, therefore, it is advisable for your cryptocurrency clause to include this condition. For example,
«As the sender of the cryptocurrency transaction (buyer), you shall be responsible for covering all associated the blockchain transaction fees incurred during any blockchain network transactions or operation. The recipient will not incur any transaction costs. These fees can fluctuate based on factors like network traffic, operation complexity, and sender-set priorities, and they are beyond our control.»
It is important to understand that the more clearly and comprehensively you describe the process of interacting with the client and all possible disputes, the fewer risks you will bear. This is especially true when it comes to legally unregulated processes like cryptocurrency payments. In the upcoming articles, we will strive to provide more detailed descriptions of these aspects. Keep following us and use us as your payment operator!
