After Checkout.com report, 77% of merchants who choose to accept crypto as a payment method see an increase in cross-border sales. It’s no surprise, then, that an estimated one-fourth of all online businesses plan to offer crypto payment methods by 2025 — a number that will only increase as the education gap narrows.
And this is not just a local phenomenon. After recent Data, around 15,174 companies worldwide use Bitcoin to process payments, with only 2,300 of these companies being based in the United States. So it’s clear that mass adoption is growing, and the stats back it up. Let’s examine the reasons for this shift and see what advantages crypto payments offer businesses compared to traditional fiat gateways.
Advantages of the Cryptocurrency Payment Gateway
Although many are already familiar with the basic advantages of digital assets, certain aspects make crypto particularly attractive to companies of different sizes and industries.
Cryptocurrency Gateway reduces processing costs
One of the most commonly cited benefits is the lower fees. While in the fiat world a merchant can expect to pay over 3.5% of each transaction, when using the best cryptocurrency payment gateways, the fees can be as low as 0.8%.
Processing of cryptocurrencies eliminates chargeback and rolling reserves
Another financial incentive relates to the impossibility of chargeback fraud. Since all transactions on the blockchain are final by default, merchants no longer have to deal with rolling reserves due to chargeback-related laws. These funds can be used within the company and serve to increase sales.
Crypto Gateway Payments enable companies to scale and expand
Unlike banking, crypto is accessible all over the world – all you need is an internet connection. This allows traders to significantly increase their cross-border potential and reach a wider market. While fiat-only companies tend to cater to their local cohort, digital assets know no boundaries. This is incredibly important not only for revenue generation but also for advertising opportunities. The only way to achieve such global coverage in traditional finance is to offer payments in over 200 local fiat currencies, which is simply not feasible.
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 business days. This inefficiency slows business and results in lost revenue. In addition, forecasting becomes much easier with instant payments. In addition to the processing time, one should also consider the rejection rate – a parameter that shows how many transactions have been rejected. A high rejection rate can lead to an increase in customer abandonment rate, resulting in lost business.
In the traditional payments industry, automated AML systems often reject payments based on false flags. As a result, the rate of decline in fiat processors is around 15%, while it is virtually non-existent in digital assets. Therefore, top crypto providers offer an acceptance rate of 99% while maintaining the instantaneous and cost-effectiveness of transactions.
Instant payments exist on the blockchain because no central bodies are needed to verify transactions. Furthermore, they work around the clock, 24/7, in stark contrast to rigid bank opening hours. As an added bonus, processors like CryptoProcessing.com run their own nodes to guarantee instant transactions even when 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. For this reason, it is important to work with a reputable cryptocurrency processing provider to ensure you don’t face fines or a bad reputation down the road. So what is the best tool to work out these benefits for your business? After the collapse of a number of crypto giants, there are a few options.
The traditional option would be BitPay. Since 2011, the platform has enabled its customers to take a hands-off approach. Merchants can receive payments in real currencies, as opposed to the cryptos their customers prefer – the service converts funds instantly. With a 1% processing fee, the service is relatively cheap compared to fiat gateways. Although not fully global, BitPay offers withdrawals in 8 currencies with direct bank deposits in 38 countries.
However, the service has fallen victim to bad press more than once. In late 2014, BitPay lost more than $1.8 million worth of bitcoin after a director fell victim to a phishing scam. Later, in November 2018, BitPay warned its users about an 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, reputable option.
CryptoProcessing by CoinsPaid is the leading payment gateway for cryptocurrencies with over €16 billion processed. In fact, the service is responsible for almost a tenth of all Bitcoin transactions around the world. Notably, CryptoProcessing.com offers features for both regular and one-off cryptocurrency payments via API, as well as the ability to accept digital assets in a few clicks with its multi-currency corporate crypto wallet.
The service has no setup or monthly fees and only charges a 0.8% transaction commission. In addition, this percentage can be further reduced by using the platform’s native token or by 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 currencies including USD and EUR via SEPA and SWIFT.
Additionally, the processor offers a high level of customizability across multiple payment tools – options such as invoicing, payment links, channels and plug-and-play make the solution a standout for those looking for a bespoke approach.
Although digital assets are often seen as a gray area of regulation, CoinsPaid’s CryptoProcessing.com is an EU-licensed crypto provider that adheres to all European AML procedures to ensure the transparency and security of all activities. In addition, the platform uses the blockchain risk assessment system to detect and eliminate fraudulent transactions.
If a business wants to scale to multiple regions at once, there is no need to connect local payments for each jurisdiction. Instantly converting to fiat with a guaranteed rate to prevent unwanted slippage alleviates concerns about volatility while businesses don’t need to have a crypto background.
Therefore, with a large number of payment tools, CryptoProcessing.com is adaptable to any business model while providing a competitive advantage and wide marketing opportunities.
Coinbase not only advertises itself as offering 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. Ultimately, it was named as one of the best bitcoin payment providers out there.
In addition, the exchange offers this service completely free of charge for the first $1,000,000 of transactions. Thereafter, a 1% processing fee will be charged. Covering a wide range of currencies and market segments, Coinbase has the only downside that it operates in a remarkably limited number of countries.
Crypto.com offers merchants a “pay checkout” service. This system is highly specialized and tailored to the e-commerce market. There are pre-built plugins that can be used for services like Shopify, and the number of supported countries is remarkably high.
With just 0.5% in transaction fees, Crypto.com charges the lowest fees of any of its competitors. It also has a component discount system where its traders can claim rewards. However, this low rate comes at a price – with high levels of platform automation, companies that need a more customized approach may find this problematic.
Crypto Gateways are here to stay
Regardless of the crypto solution chosen, the proof is in the pudding – businesses are starting to accept crypto at record speed. According to the latest data, the global ownership rate of digital assets is already 4.2%, with over 320 million crypto users worldwide. Therefore, mass adoption is in full swing, prompting businesses to integrate crypto as a payment option.