According to Checkout.com’s report, 77% of merchants who choose to accept crypto as a payment medium see an increase in cross-border sales. So it’s no surprise that an estimated quarter of all online businesses want to offer crypto payment methods by 2025 – a number that will only rise as the education gap closes.
And this is not merely a local phenomenon. According to recent data, approximately 15,174 businesses worldwide use Bitcoin payment processing, with only 2,300 of those businesses located in the US. So, it’s clear that mass adoption is on the rise, and the stats are looking up. Let’s study the reasons behind this shift and see what advantages crypto payments offer businesses compared to traditional fiat gateways.
Advantages of Cryptocurrency Payment Gateway
While many are already familiar with the basic benefits of digital assets, certain aspects make crypto particularly attractive to businesses of different scales and industries.
Cryptocurrency gateway reduce processing costs
One of the most cited benefits relates to the lower fees. While a merchant in the fiat world can expect to pay more than 3.5% of each transaction, fees can be as low as 0.8% when using the best payment gateways for cryptocurrency.
Processing of cryptocurrencies eliminate chargebacks and rolling reserves
Another financial incentive is related to the impossibility of refund fraud. Since all transactions on the blockchain are final by default, merchants will no longer have to deal with rolling reserves due to chargeback-related legislation. These funds can be put to work within the business and serve to increase income.
Crypto gateway payments allow businesses to scale and expand
Unlike banking, crypto is accessible all over the world – all you need is internet connection. This enables traders to significantly increase their cross-border potential and reach a wider market. While fiat businesses tend to serve their local cohort, digital assets know no bounds. This is incredibly important, not only for generating revenue, but also for advertising opportunities. The only way to achieve such global coverage in traditional finance is to offer payments in more than 200 local fiat currencies, which is simply unfeasible.
Crypto ports offers 99% acceptance rate
Then there is speed, as crypto payments are instant. For merchants using PayPal, these payments can take up to 5 business days. This inefficiency slows down business, leading to a drop in revenue. Moreover, forecasting becomes much easier with instant payments. Apart from the processing time, one should also consider the decline rate – a parameter that shows how many transactions are rejected. A high attrition rate can lead to an increase in the customer churn rate, resulting in lost business.
In the traditional payments industry, automated AML systems often reject payments due to false flags. As a result, the attrition rate with fiat processors is around 15%, while it is virtually nonexistent when it comes to digital assets. Top crypto providers therefore offer an acceptance rate of 99%, while maintaining the immediacy and cost efficiency of the transactions.
Instant payments exist on the blockchain as no central organs are needed for the purpose of transaction verification. Moreover, they operate 24 hours a day, 24 hours a day, in stark contrast to rigid banking hours. As an added bonus, processors like CryptoProcessing.com operate their own nodes to guarantee instant transactions, even if the network is congested.
The Top Crypto Payment Processors
Despite the benefits, there are still risks to crypto as it is still unregulated in many countries. Therefore, it is important to work with a reliable cryptocurrency processing provider to ensure that fines or a bad reputation do not come your way later. So what is the best tool to find these benefits for your business? There are a few options in the wake of a series of crypto giant crashes.
The traditional option would be BitPay. Since 2011, the platform enables a ‘hands-off approach’ for its customers. Merchants can receive payments in real currencies, as opposed to the crypto their customers prefer to use – the service converts the funds instantly. With a 1% processing fee, the service is relatively cheap compared to fiat gateways. Although not completely global, BitPay offers payout in 8 currencies with direct bank deposits in 38 countries.
However, the service has fallen prey to bad press more than once. In late 2014, BitPay lost more than $1.8 million in bitcoin after a director fell victim to a phishing scam. Later, in November 2018, BitPay warned its users about a piece of infected code created to steal private wallet keys from people using its open-source wallet. Aside from these incidents of bad press, BitPay remains a strong, reliable option.
CryptoProcessing by CoinsPaid is the leading cryptocurrency payment gateway with over €16 billion processed. Indeed, the service accounts for nearly a tenth of all bitcoin transactions around the world. In particular, CryptoProcessing.com offers functionality for both recurring and non-recurring cryptocurrency payments via API, as well as the ability to accept digital assets in a few clicks with its multi-currency crypto wallet for businesses.
The service has no setup or monthly fees and only charges a 0.8% transaction commission. What’s more, this percentage can be further shrunk by using the platform’s native token or participating in the Ambassador Program.
CryptoProcessing.com supports 20+ of the most popular digital currencies including Bitcoin, Ethereum, Tether, Dogecoin and Tron. In terms of fiat currencies, the service accepts more than 40 top assets, including USD and EUR, via SEPA and SWIFT.
In addition, the processor offers a high degree of customization via multiple payment tools – options such as invoicing, payment links, channels and plug-and-play make the solution an excellent solution for those looking for a customized approach.
Although digital assets are often considered a gray regulatory area, CryptoProcessing.com by CoinsPaid is an EU-licensed crypto provider, complying with all European AML procedures to ensure the transparency and security of all activities. In addition, the platform makes use of the blockchain risk scoring system to detect and eliminate any fraudulent transactions.
If a business wants to scale to multiple regions at once, there is no need to link local payments for each jurisdiction. Instant conversion to fiat with a guaranteed rate to prevent unwanted slippage lowers volatility concerns, while businesses don’t need to have any background in crypto.
Thus, with a large number of payment tools, CryptoProcessing.com is adaptable to suit any business model, while also providing a competitive advantage and broad marketing opportunities.
Coinbase not only advertises itself as providing one of the best hot wallets in the world – it can also be used as a crypto gateway. It facilitates the instant conversion of Bitcoin to fiat without the merchant requesting a withdrawal. Finally, it is cited as one of the best Bitcoin payment providers out there.
Additionally, the exchange offers this service completely free for the first $1,000,000 in transactions. After that, a 1% settlement fee is charged. With a wide variety of currencies and market verticals, Coinbase’s only downside is that it operates in a particularly limited number of countries.
Crypto.com offers a ‘Pay Checkout’ service to merchants. This system is highly specialized and customized for the e-commerce market. There are pre-made plugins that can be used for services like Shopify, and the number of countries supported is particularly high.
With only 0.5% in settlement fees, Crypto.com charges the lowest fees of all its competitors. It also has a component discount scheme in which its traders can claim rewards. However, this low rate comes at a price – with a high degree of platform automation, businesses that require a more customized approach may find this a cumbersome facility.
Crypto ports is here to stay
Regardless of the chosen crypto solution, the proof is in the pudding – businesses are starting to accept crypto at a record rate. According to the latest data, the global ownership rate in digital assets is already at 4.2%, with more than 320 million crypto users worldwide. Thus, mass adoption is in full swing, prompting businesses to integrate crypto as a payment option.