Wednesday, February 15 2023
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.
Get started with Crypto payment processing. It's never been easier to accept payments for any type of business.