Cryptocurrency has been steadily making its presence felt in the world of finance. Earlier, people were hesitant to trade crypto because they weren’t sure of how the blockchain worked. But, digital assets like Bitcoin, are slowly becoming popular because of their decentralized nature. While these are not physical currencies, they facilitate quick, seamless transfers in a secure way.
Given the rising popularity of crypto, your business is likely to lose out if it doesn’t integrate crypto payments. Making way for crypto payment ensures that you can expand your market and consolidate your position in it.
Businesses shouldn’t wait to embrace cryptocurrency because these entail far lower transaction fees than fiat money transfers. Businesses get to save more money as a result. Besides, they can attract new customers by offering them impressive cutting-edge technologies. As the number of crypto enthusiasts keeps growing, you can stay ahead of your competitors if you could provide crypto payment options to your clients. Cryptocurrency payments mean you can receive money from anywhere globally, as long as you have web connectivity. International payments usually involve complex currency conversions and credit card chargebacks. Crypto eliminates these hassles and facilitates quick payments. Since crypto transfers are irreversible, you won’t have to worry about fraud.
Businesses enjoy multiple benefits when they embrace crypto payments. To start with, it saves them a lot of money as there are no middlemen, like banks, involved in transfers. Transactions get done securely and quickly unlike banks and financial institutions where the waiting period can be quite long. Transactions can even happen in real-time or in a matter of hours. Crypto payments will work globally facilitating seamless exports of products across borders. Most significantly, businesses don’t have to experience fraud or chargebacks. The blockchain verified funds and prevents tampering with data once recorded.
Understanding Cryptocurrency Payments
The crypto payment system is a peer-to-peer framework allowing anyone to receive and send money anywhere in the world. The transactions happen through a blockchain where data once entered cannot be changed or deleted. This blockchain is a public ledger that verifies transactions.
For businesses, crypto payment is advantageous because it is digitalized and decentralized. This means you have the freedom to send and receive funds without the need for intermediaries like banks. Moreover, crypto is both secure and fast, making it very useful for buying everyday utilities. Unlike regular fiat transactions through banks where you have to provide personal financial details, crypto transactions can take place anonymously. Financial information about a transaction stays completely private. Once payments are made, they cannot be canceled or reversed. These are the key benefits that crypto payments enjoy over traditional payment methods.
All said and done, there are some downsides to using crypto payment systems. Like any other speculative investment, cryptocurrency is prone to rapid market fluctuations. Since the market is volatile, accepting crypto payments is risky. If you try to hold onto your crypto to protect it from fluctuations, it means you cannot use your funds and you can never be certain that its value will stay intact. Crypto payments are subject to taxation and must be reported as gross income. So, you may have to pay capital gains tax. Finally, crypto rules are in a state of flux and are different everywhere. This is why one must carefully study the local regulations before engaging in crypto payments.
Choosing the Right Crypto Payment Processor
Crypto payment processors are those merchants that offer crypto for payment purposes. Payment gateways like Coinbase Commerce, BitPay, or PayPal facilitate the processing of cryptocurrency payments for different merchants, and in exchange, these businesses get fiat money in their accounts.
Businesses find it convenient to use crypto payment processors because these enable transfers in real time. They can offer crypto payment along with fiat payment services. Payment gateways can be custodial or non-custodial. Custodial ones are where the profits merchants make go into their accounts. They can then begin to withdraw money into their wallets. However, non-custodial payment processors will only process payments and send the profit to merchant wallets.
When choosing the right crypto payment processor for your business, you can follow these tips:
- Reputation: Make sure that the gateway you choose is registered properly and holds a valid license to conduct transfers.
- Speed of transactions: The payment processor should be able to guarantee quick transfers given the volatile nature of cryptocurrencies.
- Reasonable commissions: The crypto payment processing company shouldn’t overcharge you; make sure their commissions are justified and transparent.
- Easy-to-use: Without a user-friendly interface, it’s hard for one to use a payment gateway.
- Secure: This is by far the most important criterion when choosing a payment processor. It must conform to the highest security standards to make sure your money is in safe hands.
Setting Up Your Business to Accept Crypto Payments
GoCryptoNYC can advise and guide you on how to integrate cryptocurrency payment options into the current payment structure. For this, they will educate your employees and clients about the advantages of transacting in crypto.
- To start with, you need to know the cryptocurrency regulations in your region. You can reach out to a crypto consulting firm to know the tax implications of accepting cryptocurrency.
- You must then set up a crypto gateway and a crypto wallet to exchange the crypto for fiat money and to keep your coins safe respectively. Gateways are more flexible because you can either store the crypto or convert it. However, you will need to pay transaction fees. A wallet, on the other hand, won’t charge you transfer fees, although you may need to pay this when you finally convert the crypto into fiat money.
- Next, you must install crypto payment for your business by downloading either an app or a plugin on your e-commerce site.
- The crypto payment must be recorded in the same place as the other business transactions. For this, you must integrate crypto transactions into your existing accounting software.
- Prices of crypto can rise and fall sharply; so, plan for fluctuations beforehand.
Best Practices for Accepting Crypto Payments
Crypto payments can benefit your business but you need to know about the privacy and security risks. Cyber thefts and hacks are quite frequent leading to losses for businesses. So, you need to work with crypto consulting firms like GoCryptoNYC which can mitigate these risks for you. If you decide to accept crypto, you need to undertake safety measures for processing transactions securely. To protect your account, you can enable multi-factor authentication, secure private keys, and even store the crypto offline.
Crypto payments offer many advantages that businesses should use if they wish to get more customers and widen their clientele. At the same time, they need to be aware of the potential risks associated with crypto transfers. Threats of cyber criminals are very real and businesses have to take appropriate measures to neutralize these threats. This is why you need to choose your crypto payment processor service very carefully, after considering many key parameters like security, legitimacy, and user-friendliness.