According to Checkout.com’s report, 77% of merchants who choose to accept crypto as a payment medium observe an increase in cross-border sales. It’s no surprise therefore that an estimated quarter of all online businesses are looking to offer crypto payment methods by 2025 – a number that will only rise as the education gap decreases.
And this isn’t simply a local phenomenon. According to recent data, around 15,174 businesses worldwide use Bitcoin payment processing, with only 2,300 of those businesses located in the U.S. So, it’s clear that mass adoption is on the rise, and the statistics check out. Let’s study the reasons behind this shift and see which benefits crypto payments provide to businesses when compared to traditional fiat gateways.
Benefits of Cryptocurrency Payment Gateway
Although many are already familiar with the basic advantages of digital assets, certain aspects make crypto especially attractive for businesses of different scales and industries.
Cryptocurrency gateway reduces processing costs
One of the most frequently cited benefits relates to the lower fees. Whereas in the fiat world, a merchant can expect to pay over 3.5% of each transaction, fees can be as low as 0.8% when using the best cryptocurrency payment gateways.
Cryptocurrency processing eliminates chargeback and rolling reserves
Another financial incentive relates to the impossibility of chargeback fraud. As 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 revenue.
Crypto gateway payments allow businesses to scale and expand
Unlike banking, crypto is accessible around the world – all you need is internet connectivity. This enables merchants to significantly increase their cross-border potential and reach a wider market. Whereas fiat-only businesses tend to service their local cohort, digital assets know no bounds. This is incredibly important not only for revenue generation, but for advertising opportunities as well. The only way to achieve such global coverage in traditional finance is to offer payments in over 200 local fiat currencies, which is simply unfeasible.
Crypto gateways offer 99% acceptance rate
Then, there’s speed, as crypto payments are instant. For merchants using PayPal, these payments can take up to 5 working days. This inefficiency slows business down, leading to a drop in revenue. Moreover, with instant payments, forecasting becomes much easier. Aside from the processing time, one should also consider the decline rate — a parameter that shows how many transactions were rejected. A high decline rate can lead to increase in the customer drop-off rate, resulting in lost business.
In the traditional payments industry, automated AML systems often reject payments due to false flags. As a result, the decline rate with fiat processors is roughly 15%, while being practically non-existent when it comes to digital assets. Thus, top crypto providers offer 99% acceptance rate while maintaining the instancy and cost-efficiency of the transactions.
Instant payments exist on the blockchain as there are no central organs needed for the purpose of transaction verification. Moreover, they operate around the clock, 24/7, in stark contrast to rigid banking hours. As an added bonus, processors such as CryptoProcessing.com operate their own nodes to guarantee instant transactions even if the network is overloaded.
The Top Crypto Payment Processors
Despite the benefits, there are still risks to crypto, as it is still unregulated in many countries. As a result, it’s important to partner up with a reputable cryptocurrency processing provider to ensure that fines or a bad reputation don’t come your way later down the line. So, what’s the best tool to dig out these benefits for your company? There are a few options in the wake of a range of crypto giant collapses.
The traditional option would be BitPay. Since 2011, the platform has been enabling a ‘hands-off approach’ for its clients. Merchants are able to receive payments in real currencies as opposed to the crypto that their customers prefer to use – the service instantly converts the funds. With a 1% processing fee, the service is relatively inexpensive when compared to fiat gateways. While not fully global, BitPay offers payout in 8 currencies with direct bank deposits in 38 countries.
However, the service has fallen prey more than once to bad press. In late 2014, BitPay lost more than $1.8 million worth 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 that was created to steal private wallet keys from people who were using its open-source wallet. Aside from these incidents of bad press, BitPay remains a strong, reputable option.
CryptoProcessing by CoinsPaid is the leading payment gateway for cryptocurrency with over €16 billion processed. Indeed, the service is responsible for almost a tenth of all bitcoin transactions across the world. Notably, CryptoProcessing.com offers functionality for both regular and non-recurrent 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 set-up or monthly fees and charges only a 0,8% transaction commission. What is 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. As for fiat currencies, the service accepts over 40 top assets, including USD and EUR, via SEPA and SWIFT.
In addition, the processor offers a high degree of customizability via multiple payment tools — options such as invoicing, payment links, channels, and plug-and-play make the solution a stellar one for those seeking a tailored approach.
Although digital assets are often viewed as a grey regulatory area, CryptoProcessing.com by CoinsPaid is an EU-licensed crypto provider, compliant with all European AML procedures to ensure the transparency and security of all activities. Moreover, the platform makes use of the blockchain risk-scoring system to detect and eliminate any fraudulent transactions.
If a business wants to scale to several regions at once, there’s no need to connect local payments for each jurisdiction. Instant conversion into fiat with a guaranteed rate to prevent unwanted slippage lowers concerns of volatility, while businesses aren’t required to have any background in crypto.
Thus, with a huge number of payment tools, CryptoProcessing.com is customisable to fit any business model, while also offering a competitive advantage and broad marketing opportunities.
Coinbase doesn’t just advertise itself as providing one of the best hot wallets in the world – it can be used as a crypto gateway too. It facilitates the instant conversion of Bitcoin to fiat without the merchant requesting a withdrawal. Ultimately, it’s been cited as one of the best Bitcoin payment providers out there.
Moreover, the exchange offers this service entirely fee-free for the first $1,000,000 in transactions. Thereafter, a 1% settlement fee is applied. Covering a wide range of currencies and market verticals, Coinbase’s only drawback is that it operates in a notably limited number of countries.
Crypto.com offers a ‘Pay Checkout’ service to merchants. This system is highly specialised and tailored to the e-commerce market. There are premade plugins that can be used for services such as Shopify, and the number of countries supported is notably high.
With only 0.5% in settlement fees, Crypto.com charges the lowest fees out of all its competitors. It also has a component discount scheme in which its merchants can claim rewards. However, this low rate comes at a price — with a high degree of platform automation, businesses requiring a more tailored approach may find it a troublesome facility.
Crypto gateways are here to stay
Regardless of the chosen crypto solution, the proof is in the pudding – businesses are beginning 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 over 320 million crypto users worldwide. Thus, mass adoption is in full swing, prompting businesses to integrate crypto as a payment option.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.