Problems with crypto payments and how to solve them

Problems with crypto payments and how to solve them

By Sheepy | Sheepy Crypto Blog | 9 Nov 2023

Accepting crypto payments for products and services is an innovative option today. However, crypto payments also involve a variety of new problems and challenges. They can include the volatility of cryptocurrency prices and the difficulty that can be involved in their use.

In response to this, companies have emerged to offer platforms for processing numerous cryptocurrency payments. These are ideal to encourage the mass adoption of Bitcoin and other digital currencies as a means of exchange.

Below, we’ll mention some of the disadvantages associated with the use of cryptocurrencies, and how payment processors can help small, medium, and large businesses cope with them. This way, they can get the most out of cryptocurrencies for payments.

Volatility with cryptocurrencies

The price volatility of cryptos against fiat currencies (such as the EUR) is one of the challenges that crypto hodlers must face. Rates can change every few minutes, depending on market supply and demand. In addition, prices can be significantly influenced by some event or news within the crypto world, either good or bad.

Therefore, making crypto payments with such tremendous volatility can involve problems. Luckily, that’s where cryptocurrency payment processing services like Sheepy come in. These offer to their users the option of a fixed rate for a set period.

During that time, which can be fifteen minutes (for example), the exchange rate remains fixed within the service’s network, while the payment is completed. This protects businesses and customers from the risks of cryptocurrency volatility.

Difficulty of use

Sending and receiving payments with Bitcoin and other cryptocurrencies requires only a wallet with funds and a recipient address for the coin involved. While the user experience in crypto-wallets is getting better and better, it would be impractical for a merchant to share the cryptocurrency addresses of each of the multiple coins they receive.

Also, this could affect their privacy, since blockchains such as Bitcoin are public and can reveal the total funds received by the merchant, linking it to one or multiple addresses. The dates and various amounts would also be revealed to anyone searching on a blockchain explorer.

To provide greater ease and protection to both the merchant and their customers, payment processors offer services that integrate different cryptos into a single platform. Likewise, these companies usually offer payment button options, WordPress shopping plugins, and APIs of their software to be implemented on websites.

That way, anyone around the world could purchase products and services with cryptocurrencies at the touch of a button and without leaving home. Automatic withdrawals and payments are also included features. Thus, for example, merchants can pay employees and suppliers using cryptos and schedule monthly crypto payments without problems.

Lack of ordered registries

Keeping an accurate record of all purchases paid with different cryptocurrencies can be cumbersome for merchants. They’d have to go through each wallet very well, and even resort to different blockchain explorers. One may even have to search for numerous addresses, as many wallets generate a new one automatically for each transaction.

Therefore, creating a proper record for accounting purposes and generating financial statistics manually is not an easy thing to do. Especially when transactions are massive. Given this lack of organization that merchants may face, payment processing platforms can be an excellent solution.

These companies have dedicated efforts to the development of merchant solutions that offer well summarized and organized statistics. So, the users of such services will have greater control over their data. The platform would gather in one place all the information of interest to them, such as records of income, expenses, available funds, sales dynamics, among others. Automatically, and no matter the number of transactions.

Security and Support

Learning to use cryptocurrencies doesn’t only imply knowing how to send and receive them. It’s necessary to know how to store the funds securely. While self-custody of cryptocurrencies such as bitcoin is practically a declaration of monetary independence, it also entails greater responsibility on the part of the user.

With no intermediary guarding the funds, the cryptocurrency owner must keep the recovery phrase or seed words very securely. This would be the only way to recover your funds in case of problems with your devices. If you lose this “private key” or if it falls into someone else’s hands, it means saying goodbye to your funds forever.

Now, by using cryptocurrency payment processing services, merchants can also store their funds in the safe accounts of such companies. They possess security measures superior to those of any average user. In addition, these organizations have a support team to which users can turn in in case of any problems with crypto payments or their funds.

Regulations and taxes

The great attention that Bitcoin and cryptocurrencies have gained has made regulators around the world increasingly interested in this new market. Thus, new regulations, limits, and taxes on cryptocurrency trading have been introduced. It’s worth noting that in jurisdictions with cryptocurrency regulations, the most common rule is to identify users who carry out operations with local money (KYC) and subsequently urge them to declare taxes (if any).

Again, payment processors could support merchants in overcoming these problems with crypto payments. Through their business solutions, such as the use of statistics and tools for tax calculations, this type of intermediary would also contribute to merchants in their financial duties with cryptocurrencies. Also, payment processors are usually properly registered with regulatory bodies to be able to offer their services legally and securely within certain jurisdictions.

No more problems with crypto payments

As we have already seen, there are several obstacles that merchants who want to start accepting mass payments with multiple cryptocurrencies may face. However, these challenges involving cryptocurrencies shouldn’t stop entrepreneurs from accepting them as a means of exchange, as they have multiple advantages for local and borderless commerce.

According to the third “Global Cryptocurrency Benchmarking Study” by Cambridge, there were at least “101 million unique cryptoasset users across 191 million accounts opened at service providers in Q3 2020″ worldwide. That’s a lot of potential customers.

Therefore, cryptocurrency payment processing platforms are further contributing to their mass adoption. They provide alternatives to the challenges that cryptocurrencies may bring, to get merchants on board in this new era of digital money.



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