There has been a tremendous increase in the popularity of crypto. More business owners need a crypto merchant account every day. The widespread acceptance and global attention garnered by cryptocurrencies has further fueled this need. Therefore, these businesses are seeking efficient crypto payment processing solutions.
This blog post will provide a comprehensive overview of a crypto merchant service and why your business might need it.
Paying In Crypto: Fundamental Definition
To begin, let’s explain what is a cryptocurrency payment. Simply, it’s a process when a merchant or individuals accept payments with cryptocurrency. Think of it as a processor specifically designed for digital money, similar to how payment processors, gateways, and banks work. By accepting crypto, businesses can quickly receive digital payments and immediately convert them into traditional fiat currency.
It’s important to understand that digital currency payments are decentralized. While using your wallet to accept cryptocurrency payments is acceptable, cryptocurrency gateways can simplify the process by handling cryptocurrency exchange and managing a wallet. This takes away the extra work and responsibility from your hands.
Many businesses are now adopting crypto payment processing solutions, as demand for these decentralized transaction solutions is increasing globally. These solutions offer a borderless, transparent, and secure way of processing payments.
No matter what business you are in, using cryptocurrency merchant services delivers the following benefits:
- Attracting New Customers: As crypto becomes more popular, accepting it as a payment method can bring in new customers actively seeking businesses that accept crypto.
- Lower Transaction Costs: Unlike credit card payment fees of 2-4%, transactions have a low flat fee, saving your business money.
- Immediate Availability: With no third parties involved, cryptocurrency payments go directly into your wallet, ready for immediate use or conversion into fiat currency.
- Safe and Secure: Enhanced security and protection against fraud and DDoS attacks compared to traditional payment systems.
- Eliminating Chargeback Fraud: Once a payment is made in cryptocurrency, it is final and cannot be reversed, reducing the risk of chargeback fraud.
Cryptocurrency merchant service accounts let businesses accept digital assets as payment from consumers. Some features include:
- Crypto payment options: Customers can instantly use cryptocurrencies to buy goods and services without involving third parties.
- Point-of-Sale System (POS): This software enables merchants to accept cryptocurrency payments at physical locations by scanning QR codes on customer devices or using NFC technology on credit cards.
- App for Mobile Wallet: Customers can use mobile wallets to buy things directly from merchant websites by utilizing their smartphones or tablets as payment devices instead of entering personal information such as credit card numbers or bank account information. Some mobile wallets also allow users to pay for products from other merchants using Bitcoin transferred from one user’s wallet to another using an exchange app.
A crypto merchant account is designed to facilitate payment acceptance in Bitcoin, Ethereum, and other cryptocurrencies, along with fiat. Therefore, even if your business doesn’t currently accept crypto payments, it is still essential to have a merchant account.
A merchant account is a system that enables you to receive customer credit card payments. You will receive a merchant ID and password when you open a merchant account. These credentials allow your customers to make payments using their credit card information.
However, most banks do not permit directly accepting crypto payments into merchant bank accounts. They fear potential losses due to significant fluctuations in cryptocurrency prices before the funds are deposited.
To overcome this challenge, cryptocurrency payment processors come into play. These processors allow businesses to directly accept crypto payments into their bank accounts, eliminating concerns about cryptocurrency value fluctuations and transaction fees associated with each payment.
Opening An Account
Setting up a merchant account is simple, especially with so many leading providers available, such as B2BinPay, BitPay, Coinbase, and more.
Types of merchant accounts:
- Personal: Suitable for small businesses and individuals selling goods or services online. These accounts have lower transaction limits and require less paperwork and verification.
- Business: Ideal for larger companies with dedicated staff and high transaction volumes. These accounts have lower fees and handle accounting and financial management tasks.
Crypto operates on the principle of eliminating intermediaries from financial transactions. While this appeals to those who embrace change and understand it well, others may not accept it. Comprehending a new concept in a world where tangible assets have always been valued can be challenging. However, as developed countries increasingly move towards online transactions, the need to physically exchange money is becoming less common.