Crypto Payments – Why Your Business Should be Accepting Bitcoin
Crypto, bitcoin, fiat…these terms are becoming more and more common as cryptocurrency becomes ubiquitous in the payment world. Although the average business owner may not be familiar with the ins and outs of cryptocurrency, it is becoming a popular method of payment, especially among consumers between the ages of 18 to 29. Even Starbucks and Microsoft have begun to accept crypto payments. In this post we will cover what a crypto payment processor is, the required equipment (or lack of), and the consumer process, as well as the multiple advantages to offering a crypto payment option to consumers, including reducing chargebacks, increased customer satisfaction and ease of international transactions.
What is a Cryptocurrency Payment Gateway?
Crypto payment gateways are third party payment processors that allow merchants to accept digital currencies such as Bitcoin as a form of payment from their customers. Utilizing a crypto payment gateway provides invaluable ease in accepting crypto by locking in conversion rates, thus eliminating the volatility of the crypto market for a limited amount of time. With the use of a crypto payment gateway, the merchant’s need to maintain a crypto wallet and to convert currency is eliminated, increasing the business owner’s ease of use.
Like a traditional payment processor, a crypto payment gateway allows businesses to receive payments. However, instead of dealing with credit, the gateway receives payments in digital currencies and then converts them into fiat for the business owner. When a customer makes a purchase using crypto, the payment processor converts the crypto into fiat, and locks in the conversion rate. The fiat is then transferred to the business owner’s account with the payment processor and then to the merchant’s bank account. Through this process, any merchant is able to accept crypto payments without having to deal with fluctuations in currency conversion. Additionally, the merchant has the option to keep whatever percentage they want of the sale in crypto. For example, 10%, 30%, 50%, 80%, etc. This is NOT REQUIRED, it’s simply an available option.
Equipment
The payment gateway that is used for crypto payments can be accessed through any laptop or mobile device, eliminating the need for specialized equipment, which makes it an easy transition for current business owners to add this type of payment option to their payment suite. Consumers can pay with any type of account that is compatible with crypto payments. Crypto credit or debit cards are also available to make payments with once the consumer links the account.
Consumer Process
You may be wondering how the whole process plays out from the view of the customer. Say that you have been wanting that new pair of shoes and want to use cryptocurrency for those shiny new kicks. “Shoe Mania” (or whomever is selling the shoes) will create a digital invoice through their payment gateway, which generates as QR code. The QR code has the address of your wallet as well as the amount that you owe for those shiny new sneakers. The market rate of the crypto is automatically calculated and locked in. After the QR code is generated, you go ahead and scan it with your phone. You will then confirm the transaction, and your crypto payment is transferred from your account to the Shoe Mania. This whole process is completed in as little as a few seconds.
Advantages of Accepting Cryptocurrency
In addition to crypto payments being an inexpensive and efficient way to transfer funds, using a cryptocurrency payment processor has a multitude of advantages listed below.
International payments – If your business is dealing with international transactions, there is no need to convert payments into the local currency. As mentioned above, the market rate of the transaction is locked in on the back end for a limited time once the transaction is initiated.
No need to wait for bank settlements – Instead of having to batch out and wait 24-48 or longer for your bank deposits to be available, the funds are available immediately.
Ability to convert crypto to fiat – or not
After a transaction has been completed, the merchant has the option to retain a percentage (10%, 20%, 50%, 80%, etc.) of the payment in crypto or convert the full amount of the transaction to fiat.
Reduced chargebacks – When customers pay with crypto, chargebacks are nonexistent. This gives you, as the business owner, the chance to speak with the customer directly to handle any issues with the purchase and to regain their trust in a more personalized manner.
The Bottom Line
Taking all the points above into consideration, one can see that accepting crypto as a form of payment holds multiple advantages to merchants. While providing increased versatility, this form of payment processing holds multiple advantages for the consumer as well.
365 Glacier Payments has over two decades of experience in guiding merchants through processing solutions that best fit with their business strategy. If you have additional questions or would like to learn more about offering crypto payments, we are happy to guide you through the process. You can get started by scheduling an appointment here, or you can reach us at 866.857.8766 or email [email protected]. We look forward to hearing from you!
