The integration of cryptocurrency payments into traditional business benefits both – clients and entrepreneurs. It makes goods and services more accessible and expands the customer base. In this article, we will analyze how to add support for cryptocurrency payments through crypto processing services and what solutions can be used in order to do it.
What is crypto processing?
The concept of "processing" comes from traditional finance. It appeared in the '70s in the United States. This word is used to describe the payment activities carried out not by banks, but by third-party companies. The first company to do that was Visa, which offered its service in 1977.
Crypto processing allows using cryptocurrency payments via third-party platforms. That gives businesses an opportunity to accept, for instance, ETH and then convert it to fiat or other assets. So now e-shops have the opportunity to expand the number of available payment methods. Usually a cryptocurrency payment provider gives several tools at once:
- infrastructure for crypto transactions (wallets and storage services);
- internal conversion of assets;
- solutions for tracking and management of payments;
- integration with traditional payment and withdrawal methods (bank transfers and cards).
Why do we need crypto processing?
Processing platforms solve many problems associated with cryptocurrency payments, such as:
- Cryptocurrency volatility: the exchange can be fixed at the time of purchase to avoid a sudden price spike. Moreover, due to auto-conversion, the merchant has the opportunity to receive funds in stablecoins or fiat and completely protect himself from volatility.
- Lack of access to fiat or the desired coin: crypto processing allows to automatically convert cryptocurrency to fiat or another cryptocurrency, without limiting the buyer in choosing a specific asset.
- Legal registration of the transaction: since cryptocurrency wallets do not store personal data of users, often there is no opportunity to prove the fact of purchase or payment. The processing service allows businesses to issue an electronic invoice to the buyer, which will be a confirmation of the purchase.
Processing platforms make buying via cryptocurrency much easier and more convenient for both parties. Merchants would not be able to provide a quality user experience to buyers by simply accepting cryptocurrencies in a wallet.
Benefits of crypto payments for business and customers
The crypto processing provider becomes an intermediary between the buyer and the seller. Iit provides both parties with some benefits:
- Cheap and fast transfers. Usually crypto transaction fees are lower than bank payment processing rates. Plus, most of the time crypto transactions are confirmed in minutes/seconds, depending on the currency.
- Internationality. Cryptocurrency is not tied to any jurisdiction, which means that you can sell and buy goods and services in almost any country, there is no need for access to the local banking system. However, it’s always a good idea to check out the crypto regulations in your country, before using it for payments.
- Privacy. Although the processing provider verifies the legitimacy and authenticity of the seller, the parties of a deal may not disclose personal data to each other.
- Automation of business processes. The seller can set up automatic crypto-to-crypto or crypto-to-fiat conversion, track payment statistics, issue refunds and issue invoices. A quality provider provides ample opportunities for managing financial flows.
- Security. A trusted processing service stores fiat and cryptocurrency funds of the merchant until they are withdrawn to an external account/wallet. So a seller won't be preoccupied with the security concerns.
Solutions for cryptocurrency processing
Implementation of cryptocurrency payments by yourself requires the creation of a hub that combines fiat and crypto accounts. This requires technical knowledge, programming skills and integration with financial partners. It is difficult, expensive and time consuming. Luckily, there are crypto processing services that can be immediately connected to an online store or website. Let’s see what kind of platforms are out there.
This is the very first payment service for cryptocurrencies, which appeared two years after Bitcoin (BTC). Today it is used by MasterCard, Delta and other large companies. The service offers various e-commerce plugins, including Woocommerce, Shopify. More than 12 cryptocurrencies can be used to accept payments. The service supports a large number of crypto wallets and has an automatic conversion of cryptocurrencies to fiat money.
This provider has been on the market for 10 years. Coinbase Commerce customers can accept payments in 7 popular cryptocurrencies. Platform has integrations with Woocommerce, Shopify and allows merchants to use all the functionality of the integrations. Another advantage is the easy way to make a bill for customers.
NOWpayments is an international crypto processing platform based in Seychelles. It is mainly used by European companies, as well as by online casinos. This platform supports fiat withdrawals through SEPA banks and offers specialized solutions for gambling and Twitch, and accepts more than 130 cryptocurrencies. The main disadvantage of NOWpayments is its offshore jurisdiction, which reduces the level of customer protection and relatively high fees for fiat withdrawals (1.5-2.3%).
CoinPayments offers more than 175 types of cryptocurrencies as a means of payment and can be used as a crypto wallet for trading. Clients can exchange cryptocurrencies in their accounts, which are automatically credited to the wallet. CoinPayments supports integration with ecommerce plugins such as WooCommerce, Shopify, OpenCart and many more. There is a mobile application, POS, API, and special software for invoicing.
Conclusion
The integration of cryptocurrency payments can expand the customer base of traditional companies and provide them with opportunities to enter new markets. On the other side, the volatility of cryptocurrencies and blockchain issues make the support of crypto payments difficult from a technical point of view. Small businesses and startups simply cannot afford it. Luckily, cryptocurrency processing services simplify the management of crypto payments, allowing both large companies and private entrepreneurs to integrate crypto as a payment method.
Have you integrated crypto payments in your business? What platform did you use? Share your story in the comments below.
If you want to learn more interesting facts about crypto then check out our blog! You might like our articles “Unusual Places That Accept Crypto” and “How to Pick the Blockchain When Buying a Stablecoin”.
