You may have explored cryptocurrencies a while back and were perhaps overwhelmed by the amount of new information, or maybe you never could understand the hype around it. Either way, if you are a business owner, you will find that you cannot ignore its rising popularity anymore. At some point or the other, you will have come across clients with crypto as their preferred mode of payment. The number of requests you get may not warrant setting up a payment gateway just yet, but you might be wondering if there is any interim solution that helps you include crypto payments into your business. The answer is an emphatic yes. All you need is a wallet address to get started.
With the amount of development happening in this space, the good news is that onboarding isn't as cumbersome as it was in the past. Nevertheless, it can be very stressful for a novice who has a business to run and has no time to understand the mechanics. I realized this is a roadblock, thanks to a question from a Reddit user. While the community came forth in providing answers and giving pointers, I imagine getting too many inputs can be disorienting, especially in such a dynamic space where developments are hard to keep up with. So, I decided to put together a no-nonsense guide for anyone that needs to get the job done without having to go down the rabbit hole.
Where to start?
Exchanges are an on-the-go solution for anyone who doesn't have the time or the inclination to invest hours in researching only to make a few odd transactions. Registering with an exchange gets you the required wallet address for conveniently sending and receiving coins and tokens. You can decide whether you want to hold or not later on.
It is important to note here that exchange wallets are custodial wallets which means that they do not provide control of the private keys. In turn, this implies that you don't have full custody of your assets.
This lack of ownership is a strong reason everyone in the crypto space advocates self-custodial/non-custodial wallets. On the flip side, however, this makes for a hassle-free experience. While this might sound scary, but for a quick trade, this isn't a massive concern. In fact, many regular traders keep a certain amount of assets on exchanges. Most will agree that crypto exchanges are convenient in the short term, whereas wallets are the sensible choice for medium or long-term storage.
Which cryptocurrency to use?
Yes, there is more than one. Bitcoin is the popular one everyone knows of, although many altcoins are often used for transactions. You can ask your client for their preference, though it's prudent to have your personal list of coins you can accept without hassle. Here are a few popular ones to narrow down your choice:
This is not an exhaustive list, but unless you have someone to walk you through this stuff, you can stick with these, as there is sufficient community support if you were to face any issues.
How to manage gas fees?
Without getting too much into detail, suffice to say that blockchain transactions incur fees that go to the miners who put in work to maintain the honesty of the network. Depending on the coin or token used, on-chain charges can cost a bomb. It's important to factor this into the transaction beforehand. In most cases, it is sensible to keep the price of your product or service exclusive of this cost. Discuss and agree in advance whether the cost will include this fee or not.
Exchange vs Non-custodial Wallet
Not your keys, not your crypto is the golden rule in crypto. This scenario, however, is an exception. If you are not receiving payments regularly, you don't need to bother deciding from the range of cryptocurrency wallets. Just find an exchange of your preference, sign up, get your money, and that's that. There's no worrying about adjusting gas fees, choosing the optimum network, or learning how to bridge tokens.
Once you sign up with an exchange, you will need to do the KYC formalities to withdraw into fiat. After your KYC is completed, which can be instant or take about a couple of days, go to the asset you will be receiving the payment in and grab the deposit address. It is an alphanumeric string of letters, like so:
Some also provide a QR code for ease of sharing the wallet address. Share this deposit address with the client.
Cryptocurrency payments are instantaneous in most cases, except when the network is congested. You can ask your client for the transaction hash if you need proof of payment. To verify, go to the block explorer and search with the transaction hash, which will tell you whether the transfer is successful or pending. Transactions on the blockchain can fail due to a shortage of gas fees, so don't feel pressured to deliver the product just because you can see it on the explorer. Once the payment goes through, you will see the cryptocurrency in your exchange wallet.
Withdrawal from the exchange
If you want to withdraw your monies after receiving the payment, all you need to do is trade it with a fiat pair. If it's bitcoin, for instance, you'll see a BTC/fiat pairing to sell your asset. Trading is pretty straightforward, as the interface is generally intuitive and needs very little instruction. However, if you feel the need to, you can look up the many tutorials by community members. The last step is to withdraw it to your bank account, which you would have verified during your onboarding formalities.
Things to keep in mind
- Choose an exchange that meets your requirements + is a top-tier one. Those are usually easy to use and have good customer support if there is a need.
- All exchanges do not have all coins and tokens, so check that yours is available for deposit and withdrawal before you sign-up.
- Besides the on-chain deposit fee, the other fee you need to know about is the trading fee you incur for trading from crypto to fiat. These vary across platforms, so check to see it is reasonable.
That's about it! Go ahead and give this a try. You will find that it is easier to integrate into your business than a payment gateway.
Risk Warning: Cryptocurrency is unregulated in most places and some countries do not permit trading in any currency other than fiat. Do your research to ensure compliance with local laws before incorporating cryptocurrency payments into your business.
Dear Reader, did you find this article helpful? Will you consider incorporating crypto payments into your business? If not, what is it that holds you back? Let me know in the comments. Show your love by adding a tip or a like! Your support encourages me to keep writing.