Payment solution
LNbits: crypto payment solution
The verdict
LNbits is free, open-source Lightning software with a real point-of-sale extension, but you run it on your own Lightning backend, so custody follows that backend and the operational burden is real.
- Who holds the funds
- Configurable
- Who holds the keys
- Configurable
- Self-hosting
- Required
- Lightning
- Yes
- Fiat settlement
- No
- Bank settlement
- No
Best for: Technical merchants or operators who want a free, extensible, self-hosted Lightning stack with a POS and can run the backend.
Poor fit: Non-technical merchants, and anyone needing fiat settlement, strong refunds, or turnkey support.
Biggest tradeoff: LNbits is genuinely capable and free, with a POS (TPoS), a huge extension ecosystem, and an API. The tradeoffs are a C4 operational burden (server plus a Lightning backend), custody that follows your backend, no native fiat settlement, and weak refunds.
What it is
LNbits is free, open-source (MIT) Lightning software: an accounts and wallet system with a large extension ecosystem, including a point-of-sale extension (TPoS), LNURL and Lightning Address support, a full REST API, and an offline-capable hardware terminal (LNPoS). You run it on top of your own Lightning funding backend.
What it is not
It is not a hosted turnkey product and it is not non-custodial by default: it is custodial to its sub-wallet users, and actual coin custody depends on the funding backend you connect. It has no native fiat settlement, and public or demo instances are not for real funds.
How the payment flow works
A merchant (or operator) self-hosts LNbits, connects a Lightning backend (their own node or a funding source), creates wallets, and enables extensions like TPoS for in-person sales. Payments settle in Bitcoin to the connected backend; fiat pricing can be displayed but not settled.
Custody, keys, and settlement
The most important thing about any crypto payment solution is who controls the money and what happens if the provider goes away. Here is the structured answer, from primary sources.
- Custody
- Configurable
- Key control
- Configurable
- Fiat settlement
- No
- Bank settlement
- No
- Settlement timing
- Instant
- Settles in
- Cryptocurrency
- Backup and recovery
- Merchant
Conversion: LNbits has no native fiat conversion or bank settlement. It can display fiat pricing via extensions, but funds settle in Bitcoin to whatever Lightning backend you connect.
Getting your money: Custody follows the funding backend: if you run your own node behind LNbits, funds are yours; on someone else's instance, you are trusting that operator. LNbits is custodial to its own sub-wallet users.
If the provider or hosted service becomes unavailable
The self-hosted service keeps running if your infrastructure stays up.
Because LNbits is self-hosted, it keeps running as long as your infrastructure and backend do, and funds stay with your backend. On a third-party or public instance, custody and continuity depend on that operator, which is why we tell you to run your own for real funds.
What you have to operate
A full stack: a server, a database, a reverse proxy, LNbits itself, and a Lightning backend node, plus updates and backups. One-click node platforms reduce but do not remove this burden.
Ongoing maintenance: Substantial: server, database, backend node, updates, and backups.
Support: Community only (Telegram, forum, GitHub); no SLA or paid support documented.
Who this is right for
A technical merchant or an operator serving merchants who wants a free, extensible, self-hosted Lightning stack with a real POS and API, and who can run and maintain the server and backend.
Who should skip it
A non-technical merchant, or anyone who needs dollars settled to a bank, strong built-in refunds, or vendor support with an SLA.
Our evaluation
Pricing
- Setup
- $0 software (free MIT; you pay for hosting and a backend)
- Transaction fee
- 0% to LNbits (network fees only)
- Hosting cost
- Hosting + backend + network fees (SaaS indicative ~21 sats/hour; exact pricing offloaded)
LNbits is free and open-source (MIT). Real costs are hosting, your Lightning backend, and network fees. A hosted (SaaS) option exists with indicative pricing around 21 sats/hour; exact rates were not retrievable. Last verified 2026-07-11.
Limitations
- Custodial to its users; coin custody depends on the funding backend.
- No native fiat settlement; only fiat price display.
- C4 operational burden: server, database, backend node, updates, backups.
- Refunds are manual; no first-class refund helper documented.
- Community-only support; no SLA.
- Exact SaaS and hardware pricing were not retrievable.
CryptoLic Lab
CryptoLic does not stop at reading documentation. We independently validate what vendors claim by setting things up and running them ourselves, then we publish what we actually observed. For this solution, that hands-on validation is not scheduled. Nothing below is marked verified until we have tested it, so you can trust a "verified" label when you eventually see one.
| What we will verify | Status |
|---|---|
| Self-hosted stack setup effort | Pending verification |
| TPoS in-person acceptance | Pending verification |
| Custody behavior per backend | Pending verification |
| Accounting/CSV export | Pending verification |
| Manual refund UX | Pending verification |
| WebShop ecommerce maturity | Pending verification |
Whichever solution you choose, the crypto has to reconcile against your books. The The Merchant Accounting & Bookkeeping Toolkit gives you a routine and a clean year-end package for your CPA.
Sources and verification
Last content review 2026-07-11 Documentation verified
- Custody
- 2026-07-11
- Settlement
- 2026-07-11
- Pricing
- 2026-07-11
- Availability
- 2026-07-11
- Kyc
- 2026-07-11
- Supported assets
- 2026-07-11
- Integrations
- 2026-07-11
- Refunds
- 2026-07-11
- Open source
- 2026-07-11
- Content reviewed
- 2026-07-11
- Editorial update
- 2026-07-11
- LNbits home Supports: LNbits is free open-source Lightning software
- LNbits docs Supports: Structured documentation
- LNbits FAQ: General Supports: Custodial to users; custody depends on backend; no native fiat
- LNbits funding source comparison Supports: 20+ Lightning backends; funding-source comparison
- LNbits FAQ: Payments Supports: Lightning payment finality; refunds manual
- LNbits FAQ: Payments/exports Supports: Transaction history and DB export
- LNbits TPoS extension Supports: TPoS point-of-sale extension with terminal PIN
- LNbits installation FAQ Supports: Install requires server, DB, reverse proxy, backend
- LNbits hardware/merchants FAQ Supports: Offline-capable LNPoS hardware terminal
- LNbits security guide Supports: Security guidance; backend privacy ratings
- lnbits/lnbits (GitHub) Supports: MIT license; active (v1.5.5 July 2026); 60+ extensions; REST API
Change log
- 2026-07-11 Initial publication. Documentation review complete; custody-follows-backend nuance and the three deployment modes foregrounded. A stale-project misread was corrected via the GitHub API (v1.5.5, July 2026).
Spotted something out of date? Send a correction. We verify every submission against primary sources; vendor contact never changes a rating.
Questions
Is LNbits custodial or non-custodial?
Both, depending on how you run it. LNbits is custodial to its own sub-wallet users, and the real custody of coins depends on the Lightning backend behind it. Run it on your own node and it is effectively self-custody; use someone else's instance and you are trusting that operator. Never treat a public or demo instance as safe for real funds.
Can LNbits give me dollars in the bank?
No. There is no native fiat conversion or bank settlement. LNbits can display fiat pricing through extensions, but payments settle in Bitcoin to your backend.
Do I need to run a server for LNbits?
For real use, yes, or use a managed option. A production LNbits stack means a server, a database, a reverse proxy, and a Lightning backend, plus updates and backups. That is a genuine operational commitment, which is why we class it as high commitment.
How this compares
Every solution we cover is evaluated the same way. Here is where the others land.
| Solution | Category | Readiness | The short version |
|---|---|---|---|
| BTCPay Server | Self-hosted acceptance platform | R3 Workable with effort | BTCPay Server is the reference self-custody answer: free, open-source software that takes Bitcoin and Lightning straight to your own wallet, in exchange for running and maintaining a server. |
| Zeus | Wallet-based acceptance | R3 Workable with effort | Zeus is a self-custodial Lightning wallet and node-control app with a point-of-sale mode: you hold the keys, and how much you operate depends on whether you point it at your own node or use its embedded one. |
Compare it against the others in the Payment Solutions Decision Center, or start from what you actually need.
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