- Cryptocurrency is transitioning from an investment vehicle to a viable payment medium, prompting merchants and payment facilitators to seek optimal crypto payment gateway solutions for transaction processing.
- A significant benefit of crypto payments is the elimination of traditional middlemen like banks, potentially reducing transaction fees, but the integration of crypto payments requires careful planning and understanding of the cryptocurrency landscape.
- Key considerations for implementing crypto payment solutions include identifying target cryptocurrencies and selecting a platform that supports them, with a focus on transaction fees and blockchain compatibility.
- The challenges of crypto payments also involve converting cryptocurrency to fiat currency, necessitating an understanding of centralized exchanges, cryptocurrency cards, and the fees associated with different blockchains.
Crypto currency payment gateway solutions are getting more and more important for both merchants and platforms. Crypto is no longer just an investment vehicle. It is rapidly becoming a payment medium. So, merchants look for optimal crypto payment gateway solutions which would make accepting cryptocurrency payments possible for them. And PayFacs, in their turn, look for third-party and white label platforms offering crypto merchant services.
One of the key advantages of a crypto payment is that it involves no regulated middlemen such as clearing houses or banks. Merchants that accept cryptocurrency know it. So, if you get paid in crypto, you might be able to save on transaction fees. However, ability to accept and pay cryptocurrency is something different from conventional currency operations.
That is why if you want to make cryptocurrency acceptance possible for your business, you need some careful planning. Particularly, you should clearly define your target currencies and find, which crypto payment platform supports them.
Let us explain why.
Important Crypto Payment Solution Features
Some tips for merchants that accept cryptocurrency
During the years that passed since the beginning of cryptocurrency concept, multiple blockchains emerged. Bitcoin and Etherium are, perhaps, the most well-known ones. Others include BSC, Polygon, Avalanche, Fantom and many more.
So, like we said, every merchant should define the target cryptocurrencies it needs to support. People and businesses still consider crypto a risky and volatile asset. Yet, some of the currencies (particularly stablecoins) are better protected from sharp rate fluctuations than the others. Reason: the price of a stablecoin is pegged to the US dollar rate. Stablecoin examples include USDT, BUSD, USDC, and others.
While stablecoins are, indeed, stable in terms of rate, not every blockchain will support operations with them. For example, Ethereum blockchain does support multiple stablecoins, while Bitcoin supports only Bitcoin transactions.
Gas fees are the equivalent of credit card transaction fees in the crypto world. In this context, blockchains perform the role of crypto currency payment processors. Some of them (Ethereum, for instance) charge very high gas fees, making it irrelevant to process low-ticket crypto transactions.
Other blockchains, such as BSC or Avalanche charge lower gas fees. Yet, if you choose to operate through blockchains other than Ethereum, you might experience other problems. Let us take a look at them.
Want to get paid in crypto? Find a way to convert it to fiat!
As crypto payment industry is largely unregulated, most problems with cryptocurrency acceptance begin when you start converting it to fiat. So, again, if you want to accept crypto, you should define your target currencies and the respective optimal blockchain.
You can convert crypto to fiat through ether a centralized exchange (CEX) or a cryptocurrency card. If you use a cryptocurrency card, your crypto is gradually sold for fiat as you buy products and services. In case you operate through CEX, then you have a special wallet (or account), from/to which you withdraw/deposit crypto.
If you “trade” on a particular blockchain, then the exchange would only allow deposits or withdrawals in just one currency. This is the currency, in which the blockchain charges transaction fees. For Binance Smart Chain it is BNB, for Ethereum it’s Ether, for Avalanche it’s AVAX, and so on.
If you need to withdraw or deposit stablecoins through an exchange, you can do it using Ethereum network. However, it charges very high gas fees, so it makes sense only on high-ticket transactions.
So, while stablecoins are less risky than other currencies, depositing and withdrawing them still presents a challenge. The situation might change only when these stablecoins can be used as payment means without conversion to fiat.
Blockchain choice is a major point when you select a crypto payment solution for your business. Your options will depend on your target cryptocurrencies and your business model.
Want to learn more? Feel free to address our payment specialists and familiarize yourself with UniPay Gateway solution. It is an omni-channel crypto friendly payment gateway technology, used by software platforms, PayFacs, and other types of companies worldwide.