Tuesday, February 15 2022
The cryptocurrency industry is booming, with over 1.1 million transactions per day through Ethereum alone. And even though most retailers are still wary of accepting bitcoin payments, the list of companies that accept cryptocurrency payments is growing continuously.
As more and more online and offline brands start accepting cryptocurrency payments, the number of people willing to use it increases as well. You can, too, start receiving crypto payments from clients around the globe. But first, you should know how it works, the potential benefits and drawbacks, and how you can start accepting bitcoin and altcoin payments on your website and physical store. Let's discuss all of that and more below.
What Are Crypto Payments?
It's exactly what it sounds like; using cryptocurrency to make payments for services and goods. However, it should be noted that crypto has not yet become a legal currency anywhere around the globe except El Salvador, which only accepts bitcoin payments. Nevertheless, you can trade crypto in most countries as if you're trading a property.
You can trade Bitcoin, Ethereum, Litecoin, Ripple, Dash, Monero, etc., on exchanges like Coinbase, Kraken, Bitfinex, Coinmama, and Binance, etc. Still, many online and offline merchants accept cryptocurrency payments, including AT&T, Microsoft, KFC, Starbucks, Namecheap, Whole Foods, NewEgg, and so on.
Since cryptocurrencies are typically designed for easy peer-to-peer transactions, receiving cryptocurrency payments is as straightforward as sending coins from one wallet to another. The customer can use their phones to scan the QR code or copy the hash code of the merchant's wallet and make a transfer without involving any intermediary.
Pros and Cons of Accepting Crypto Payments:
Before we discuss how to accept bitcoin payments on your website, let's first understand the benefits and potential drawbacks of accepting crypto payments.
Let's Look at a Few Common Cryptocurrencies:
There are over 10,000 cryptocurrencies out there as of 2022, but you don't really need to know about all of them. Let's talk about some of the major players of the game, as most people will be using them to make crypto payments.
Some more coins that are commonly supported by most payment gateways include Dogecoin, Bitcoin Cash, and Litecoin, to name a few.
How to Start Accepting Bitcoin and Cryptocurrency as Payments?
Alright, now's the part where you get what you're most interested in; how to start raking those virtual coins from customers? Well, whether you're a physical or an eCommerce store, there are two main ways to do this; let's check them out below:
1. How to Accept Crypto Payments as a Business?
As a physical retail store, you have two options to receive cryptocurrencies; directly or via crypto merchant services provider; let's take a gander at both of them below:
Accepting Cryptocurrency Payments Via Merchant Services:
You can start accepting bitcoin payments or other virtual currencies through a payment processor. A merchant services provider will help you set up the POS system of a processor where your customers can pay using a wide range of cryptocurrencies.
The cryptocurrency will automatically convert into fiat currency, which will be deposited into your bank account at intervals decided in your contracts.
Accepting Crypto Payments Directly:
If you don't want a payment processor and would prefer to receive altcoin and bitcoin payments directly to your crypto wallet, you can deal with customers directly. You will need a few things:
As you can guess, accepting payments on your own can be quite a hassle. You will be doing all the work just to save a few dollars on fees. Plus, as the number of transactions increases, a lot of your time will be spent in handling them instead of focusing on handling customers.
2. How to Accept Bitcoin Payments on Your Website?
If you've got an e-commerce store and don't know how to accept crypto payments, then don't fret; it's not that difficult. Here are two ways to do it:
If you don't mind paying a small fee to handle your crypto payments, using a payment gateway is the most reliable and convenient way to start accepting bitcoin and altcoin payments on your website.
How Can You Set Up Crypto Merchant Services?
You need a crypto payment gateway to start accepting bitcoin and altcoin payments more conveniently and securely. A crypto merchant service provider will help you set up the payment gateway, including online payment processing and POS hardware.
Tip: Make sure to find POS terminals that process both NFC/EMV cards and receive crypto payments; it’ll make your life a lot easier.
Cryptocurrency merchant services are available in both Custodial and Non-Custodial forms. The former refers to those service providers through whom the cryptocurrency payments pass. So they first take control of the currency, exchange it and then send it to your bank when it's time for a payout as per your contract.
The latter one (non-custodial) refers to those who never take possession of the crypto payments, so you own the funds once they go through the payment gateway.
Both types of merchant services have their pros and cons. However, if you want the process to be secure and want your merchant services provider to be more involved, custodial is the better option.
Should Your Business Accept Crypto Payments? Here's How to Tell:
Crypto payments are one of the most exciting developments in the physical retail and e-commerce industry, and the future is only looking brighter with every passing day. If you're on the fence regarding the adoption of cryptocurrency payments, here's how you can tell if it's right for you:
What's The Cost To Receive Cryptocurrency Payments?
There are two variables here that affect the cost; network fees (the fees charged by blockchains to facilitate the transactions). This fee is mostly paid by the person sending the money, so your customers may be the ones paying it.
The second fee is the payment gateway transaction fee that, which, right now, is around 1% per transaction. Some payment processors may also charge a small fee to transfer cash or crypto into your business or personal accounts.
With the steep rise in traditional payment methods' costs, it's not a bad idea to look for alternatives that are cheaper and equally, if not more, convenient. These virtual currencies can prove to be the future of how we pay for goods and services.
However, there's always some risk with accepting Bitcoin and altcoin payments, which we've addressed above in the drawbacks sections. But if you can take this leap of faith, you may stumble upon a much better and lower-cost way to receive payments from anyone and anywhere in the whole wide world.
Sunday, February 13 2022
With the worldwide acceptance of cryptocurrencies at physical retail stores, thanks to the rise in bitcoin payment gateway providers, one must wonder, what is a cryptocurrency payment gateway?
More importantly, as a merchant, what's in it for you if you set up a crypto payment gateway? Is it safe? Do you have to know a lot about crypto to use a payment gateway? Read on to find out:
So What's a Crypto Payment Gateway?
Simply put, the crypto payment gateway does exactly for cryptocurrencies what the regular payment gateway does for fiat currency. The function of any payment gateway is to accept payment from the customer, process it, and transfer it into the merchant's bank account. So a crypto payment gateway means it's a payment processor for cryptocurrencies.
With the help of crypto payment processors, merchants can accept digital payments and in exchange, get fiat currency in their bank accounts immediately. The crypto or bitcoin payment service providers remove any reservations or uncertainties one might have with crypto, enabling them to set up more ways to get paid.
Now you may ask the question, why do I need a crypto payment processor when I can get paid in my wallet? Well, you're right, you can absolutely accept crypto payments in your wallet but then you'd have to exchange them into fiat currency. Bitcoin or altcoin payment service provider, on the other hand, takes this extra step out of the process, providing you with exchange service immediately!
How Does the Crypto or Bitcoin Payment Gateway Work?
Crypto payment processors are the companies taking already accounted risks on your behalf by accepting crypto from your customers using their wallet(s). They then exchange that amount to fiat currency and transfer it to your bank account. Here's what a typical step-by-step process looks like:
The entire process is transparent and you don't have to worry about anything except that the bitcoin merchant services provider you're working with is honest and will transfer the correct amount of funds to your bank.
What Are The Fees to Use Bitcoin Payment Gateway?
You can expect to pay two kinds of fees here:
The first one is the service fee the crypto payment processor charges to facilitate the transaction.
The second one may or may not be charged depending on the currency used for payment. The payment processor uses a wallet to receive crypto payments, so if the customer pays in a currency that has fees levied on transfers, the processor will pass this fee on to you. You can find cryptocurrencies with the lowest transaction fees here.
The Benefits & Drawbacks of the Crypto Payment Gateway:
Cryptocurrency, by its very nature, is designed to be anonymous and decentralized. This system makes transfers convenient and safer for two parties. However, since crypto payment adoption is still in its infancy period, some merchants may not be comfortable accepting digital currencies as payments. They may still be somewhat skeptical or reluctant to use this system.
To ensure you understand the rewards and potential setbacks of using bitcoin merchant services, we've laid out some key advantages and drawbacks below:
The Good Bits:
The Not So Good Bits:
The fundamental principle behind cryptocurrencies is removing any third parties from your transactions. With the use of the bitcoin payment gateway, you are involving a third party in the transaction. While this may defeat the purpose of crypto, if your business and products are legal, you don't really have to maintain anonymity.
You can use the crypto payment gateways to receive payments and enjoy instant fund exchange to fiat currency along with the peace of mind of having someone handling the technicalities for you. It is natural for any merchant to be skeptical about the use of cryptocurrency payment processors and to be honest, they are not mandatory. You can get paid directly to your digital wallet. However, using crypto and bitcoin merchant services providers, you can remove much of the disinformation, speculation, confusion, and anxiety that decentralized and unregulated sources of funds bring with them.
Note: Be sure to check the cryptocurrency regulations of your country/state before setting up a payment gateway. Crypto payment gateways can work from anywhere in the world and many countries are coming up with new regulations regarding the use of cryptocurrencies.
Get started with Crypto payment processing. It's never been easier to accept payments for any type of business.