If you run a shop and you are considering accepting Lightning payments, or you have already started and want to tighten up your process, this checklist covers the practical details that matter most. It is based on what we have learned from working with merchants through the merchant onboarding project and from conversations documented in our merchant readiness checklist.
This is not a beginner guide to what Lightning is. If you need that background, start with how the Lightning Network works. This checklist assumes you understand the basics and want to get the operational details right.
Before You Start: Readiness Questions
Before accepting your first Lightning payment, work through these questions honestly:
- Do you have a reliable internet connection at your point of sale?
- Do you have a smartphone or tablet that can run a Lightning wallet?
- Have you successfully sent and received at least 5 Lightning payments yourself?
- Do you understand the difference between custodial and non-custodial Lightning wallets?
- Do you know how you will convert Bitcoin to local currency when needed?
- Have you decided whether to keep some Bitcoin or convert everything immediately?
- Do you have a plan for what happens if your phone is lost, stolen, or broken?
If you answered no to any of these, address that gap before accepting customer payments. Accepting payments with a system you do not fully understand creates risk for both you and your customers.
Choosing a Lightning Wallet for Your Shop
What to Look For
Reliability. The wallet should receive payments consistently. A wallet that fails to receive even one in twenty payments will cost you customers and credibility.
Invoice generation speed. You need to generate a Lightning invoice quickly while a customer waits. Wallets that take more than a few seconds to produce a QR code will slow your checkout.
Payment notifications. The wallet should clearly confirm when a payment has been received. An ambiguous confirmation screen leads to disputes.
Backup and recovery. If your phone breaks, you need to be able to recover your wallet and funds on a new device. Understand your wallet’s backup process before you need it.
Channel management. Some non-custodial wallets require you to manage payment channels. If you are not comfortable with this, choose a wallet that handles channel management automatically.
Custodial vs Non-Custodial
Custodial wallets (where a company holds your funds): simpler to set up, no channel management needed, but you are trusting a third party with your money. If the service goes down, you may lose access to funds.
Non-custodial wallets (where you hold your own keys): you control your funds, but you need to manage backup phrases and, in some cases, payment channels. More responsibility, more control.
For most small merchants starting out, a reputable custodial Lightning wallet with good uptime and quick conversion options is the pragmatic choice. As you become more comfortable, you can transition to a non-custodial setup.
Fee Structure Checklist
Understanding the fee layers is critical for knowing what you actually receive from a Lightning payment.
Lightning Network Fees
- Lightning network routing fees are typically less than 1 satoshi (a fraction of a cent) for most payment amounts
- These fees are paid by the sender, not the receiving merchant
- You should not see network fees deducted from incoming payments
Wallet or Service Fees
- Check whether your wallet charges a percentage fee on received payments
- Some custodial wallets charge 0.5% to 1% on incoming payments
- Some charge a flat fee per transaction instead
- Check if there are minimum or maximum transaction limits
Conversion Fees
- If you convert Bitcoin to local currency, there will be a conversion spread
- Typical conversion spreads range from 1% to 5% depending on your market and method
- Peer-to-peer conversion may offer better rates but involves more effort
- Automatic conversion services charge for convenience
Total Cost Comparison
Calculate your all-in cost per transaction:
Lightning receiving fee + conversion spread = total merchant cost
Compare this against:
- Mobile money merchant fees (typically 0.5% to 1.5%)
- Card processing fees (typically 1.5% to 3.5%)
- Cash handling costs (security, counting, bank deposit fees)
In some markets and for some transaction sizes, Lightning is cheaper. In others, it is not. Be honest with yourself about the economics.
Settlement and Conversion Checklist
- Decide your settlement policy: convert all payments immediately, hold some as Bitcoin, or hold all as Bitcoin
- If converting, establish a reliable conversion method before accepting your first payment
- Know how long conversion takes in your market (same-day, next-day, or longer)
- Set a threshold: convert when your Bitcoin balance reaches a specific amount
- Keep records of every conversion: amount, rate, date, and method
- Factor conversion timing into your cash flow planning
Conversion Options
Exchange apps. Sell Bitcoin on a local exchange and withdraw to your bank or mobile money account. Usually takes minutes to hours.
Peer-to-peer sales. Sell Bitcoin directly to another person. Can offer better rates but requires finding a buyer and managing the transaction.
Payment service auto-conversion. Some Lightning payment services convert automatically to local currency. This is the simplest option but usually involves higher spreads.
Refund Procedures
Refunds on Lightning work differently from card or mobile money refunds. You need a clear process before the situation arises.
Key Differences
- Lightning payments are final. There is no chargeback mechanism
- To refund a Lightning payment, you must send a new payment to the customer
- The customer needs to provide a Lightning invoice for you to pay
- If the customer does not have a Lightning wallet capable of receiving, refunds become difficult
Refund Process Checklist
- Establish a written refund policy and communicate it to customers before payment
- Record the original payment amount, date, and any receipt or reference number
- Ask the customer to generate a Lightning invoice for the refund amount
- Verify the invoice amount matches the refund amount before paying
- Save a screenshot or record of the refund payment
- If the customer cannot receive a Lightning refund, have a fallback: cash refund or mobile money transfer for the equivalent amount
Price Fluctuation and Refunds
If the customer paid in Bitcoin and the price has changed since the purchase:
- Decide in advance: do you refund the original Bitcoin amount, or the original fiat equivalent?
- Communicate this policy clearly
- The most common approach is to refund the original fiat equivalent, using the current Bitcoin price
Daily Operations Checklist
Run through this at the start and end of each business day:
Opening
- Phone charged and wallet app open
- Internet connection working
- Test receive a small payment (you can send to yourself from another wallet)
- Check wallet balance matches your records
During Business
- Generate a new invoice for each transaction (do not reuse invoices)
- Wait for payment confirmation before completing the sale
- Record each payment: amount, time, and what was purchased
- If a payment fails, try generating a new invoice before asking the customer to try again
Closing
- Reconcile Lightning payments received against your sales records
- Decide which payments to convert to local currency
- Ensure wallet backup is current
- Note any payment issues for troubleshooting
Common Problems and What to Do
Payment stuck or not arriving. If a customer says they have paid but you do not see it, ask them to check their wallet for a failure or pending status. Lightning payments either complete or fail; they do not get lost. If the customer’s wallet shows a successful payment, the issue is on your wallet’s side: restart the app or check connectivity.
Invoice expired before payment. Lightning invoices have an expiry time, usually between 10 minutes and 24 hours. If the customer takes too long, generate a new invoice.
Amount mismatch. If the customer pays a different amount than the invoice, most wallets will reject the payment. Generate a new invoice for the correct amount.
Phone lost or broken. If your phone is lost, follow your wallet’s recovery process immediately. For custodial wallets, this usually means logging in on a new device. For non-custodial wallets, you will need your backup phrase. Until recovery is complete, accept only cash or mobile money. For more on this scenario, see the safety practices in Bitcoin safety for beginners.
Record-Keeping Checklist
- Record every Lightning payment received with: date, time, amount in sats, equivalent local currency amount, and what was sold
- Record every conversion: date, amount converted, exchange rate, fees paid, and local currency received
- Keep daily totals for Lightning payments separate from other payment methods
- Back up your records outside of your phone (notebook, spreadsheet, or cloud document)
- Review records weekly to understand your actual costs and volumes
FAQ
What happens if Lightning Network goes down? The Lightning Network is decentralised. Individual nodes can go offline, but the network as a whole does not have a single point of failure. If your payment service provider has an outage, your wallet may not be able to process payments during that time. Have a backup payment method available.
Do I need to understand Bitcoin to accept Lightning payments? You need basic understanding, but you do not need to be a Bitcoin expert. You should understand wallet backup, conversion basics, and the refund process.
How much should I expect in Lightning payments? In most markets, Lightning payments will be a small fraction of your total sales. Do not restructure your business around Lightning revenue. Treat it as an additional payment option.
Should I display prices in Bitcoin? No. Display prices in your local currency. Generate Lightning invoices denominated in sats equivalent to your local currency price at the time of sale.
What if a customer wants to pay but I cannot generate an invoice? Accept an alternative payment method. Do not lose a sale because of a technical issue. Troubleshoot after the customer leaves.
Printable Summary
Keep this near your point of sale:
- Generate a new invoice for each sale
- Wait for confirmation before completing the sale
- Record every payment
- Convert to local currency on your chosen schedule
- Back up your wallet daily
- Have a backup payment method for technical issues
- Know your refund process before you need it