There was a time when crypto payment solutions were associated with science fiction. Today, both cryptocurrency payments and crypto payments are accepted by investors.
Cryptocurrencies are encryption-based, decentralized means of digital exchange. Regarding managing and maintaining the currency value, cryptocurrency operations do not involve authority. Worldwide, there are a large number of cryptocurrency users and miners who perform these tasks.
Support for crypto payment solutions has many benefits
An investment vehicle based on cryptocurrency
Among the main benefits of cryptocurrencies are the following:
- It is not necessary to involve any clearing authority in crypto operations.
- Cryptographic protection is provided by blockchain and distributed ledger technologies.
- Cryptocurrencies can also be lucrative investments during times of inflation, when conventional currencies may be under pressure.
What prevents all merchants from switching to crypto? The reason is cryptocurrency’s high volatility.
Is a stablecoin immune to volatility?
Historically, cryptocurrency markets have been considered highly volatile and risky. It has traditionally been considered a high-risk investment to invest in cryptocurrencies. Recently, however, several companies have introduced what has been referred to as stablecoins, fixed to a specific currency, such as the US dollar. The rate of these coins is pegged to the US dollar rate. Contrary to more widely known currencies such as Bitcoin or Ether, their prices do not fluctuate significantly.
The stablecoins became the basis of several investment vehicles, such as savings accounts. There is a yield of up to 16% on these accounts.
People are beginning to see the benefits of keeping their savings in stablecoins under the current financial climate.
Options for crypto payment solutions
What are the best ways for my business model to accept cryptocurrency payments? This question is becoming increasingly important to online businesses as they seek optimal answers. To accept and process crypto payments, your business paradigm must be aligned with a crypto payment gateway solution that allows you to accept and process crypto payments. Many options are available, from your custom solution to an open-source crypto payment gateway product to a platform that supports omni-channel payments. The pros and cons of each scenario will always vary depending on the situation. Three main options can be considered conceptually, and they are as follows.
Constructing a crypto payment system from scratch
Despite its flexibility, this approach is the most challenging.
To accept payments, you’ll need to write your logic. Additionally, blockchain transaction processing will require smart contracts. You can save on transaction fees if you use your solution. Many businesses are discouraged from choosing this option because of the complexity of the development work.
Crypto payment solutions provided by third parties
Through the API of a cryptocurrency payment gateway, you integrate your platform with a third-party payment gateway. The third party will handle all blockchain processing if you choose this option. The time to market is reduced significantly, and there are no significant upfront costs.
Utilizing omni-channel solutions that are crypto-friendly
Cryptocurrency-only businesses are rare. Other types of payment, such as fiat currency, must be accepted by most. Several payment methods are available, including credit cards, bank transfers, mobile payments, and in-app payments. PayPal, GooglePay, or ApplePay are the most common digital wallets used by the latter group.
Implementation of crypto payment solutions on platforms that accept these payments
There are a large number of solutions available on the market that deal with cryptocurrency payment gateways. However, there are many platforms aimed at merchants and not at payment providers (PayFacs) or software service platforms. To keep your platform secure, you must be careful when choosing a crypto payment gateway. If you choose the wrong solution, your operational model may not be optimized for the solution you selected.
Situations centered around merchants
The following are the major phases of the conceptual process:
- Choose the most suitable crypto payment gateway provider after researching the best solutions on the market.
- There is a requirement for this provider to perform KYC procedures on behalf of its clients. If you are a merchant, you must submit all the mandatory forms and documents as a part of the application process.
- You must integrate the crypto gateway platform you have selected with your e-commerce website as soon as the background verification has been completed. You can choose one of the two routes to do this.
- You can easily integrate your application with the platform using some ready-made plugins.
- The API integration can be developed based on your requirements. The development of this option will require some effort from the developer.
- If you want to access reports and statements related to your crypto payment gateway, you will need to keep a separate login.
A scenario based on a platform-centric approach
The aforementioned scenario is effective if your company just requires a single merchant account, which is the majority of the time. Platforms like PayFac or SaaS service a portfolio of customers based on a PayFac or SaaS product.
There may be a problem implementing a similar scenario on such a platform since it might present a technical challenge. This is because a platform should be able to handle the entire portfolio of merchants simultaneously.
There has to be a simple user experience for merchants when it comes to using the platform. This is especially true from underwriting, later payments reconciliation, and generating merchant statements from the perspective of underwriting.
Contact our experts for more information on Crypto Payment Solutions if you have any questions.