Crypto payment solution was associated with science fiction a few years ago. As a result, investors are now able to pay with crypto as well as accept crypto payments.
Those who will benefit from this guide on implementing crypto payment solutions are:
Cryptocurrencies are decentralized and encrypted means of digital exchange. In the case of cryptocurrency transactions, no authority manages and maintains the value of the currency. Worldwide, a multitude of cryptocurrency users and miners perform these tasks.
Among the main benefits of cryptocurrencies are the following:
Is there a reason why all merchants don’t switch to crypto? The reason for this is the high volatility of crypto.
The cryptocurrency market (or crypto market) was always considered a very volatile and risky environment by many people. Historically, cryptocurrencies have been high-risk investments. However, several companies have introduced stablecoins tied to one currency, namely the US dollar, in recent years. USDC (the US dollar coin), BUSD (the Binance USD), USDT (the Tether), and PAX (the Paxos standard token) are examples of stablecoins. Worldcoinindex makes it easy to find them. The currency rate of these coins is pegged to the US dollar. Because of this, they do not experience significant price fluctuations, unlike more famous cryptocurrencies like Bitcoin and Ether.
This led to several companies offering saving accounts and other investments denominated in stablecoins. You can earn up to 16% annual interest on these accounts.
Considering the current financial situation, many people are considering using stablecoins instead of US dollars to save. Even conventional currencies are accepted by some of these companies, such as US dollars or euros, and they still offer 8% or more yearly returns.
The inventor of cryptocurrency, Satoshi Nakamoto, described it as an electronic payment system formed on cryptographic evidence as opposed to faith. All transactions completed by each user are recorded in a blockchain, which is an encrypted thread or log. This mechanism protects cryptocurrency assets through strong cryptography.
This particular approach will be challenging but the most flexible for any business.
To do this, you will have to write your type of custom logic to be able to accept any payments. Besides that, there is also the need to support smart contracts to start implementing transaction processing on a blockchain. However, using your type of payment solution will allow you to save on large transaction fees. Yet, the complex development of a custom logic can discourage a lot of businesses from deciding to go with this option.
In a third-party scenario, you will be able to integrate your platform using a crypto payment gateway using an API. If you choose this course of action, you will give the blockchain permission to work through a third party. This will reduce the time market and will not have any upfront costs.
Businesses that are only able to accept cryptocurrencies are hard to find. Most other businesses have to accept other currency-based forms for payments. These include bank payments, credit cards, and in-app and mobile payments. In-app and mobile payments mainly involve a type of digital wallets like ApplePay, GooglePay, and PayPal.
In the market, there are numerous solutions for cryptocurrency payment gateways. In contrast, most of them are designed for merchants rather than for Saas or PayFacs platforms. For this reason, you should be careful when selecting a payment gateway that accepts crypto payments for your platform. Otherwise, you may select a solution that isn’t optimized for your particular operational model. Because of this, the business could end up with some major issues down the road.
Phases of the conceptual process are outlined below.
The above scenario works well for businesses that require only one merchant account. Platforms such as PayFac or SaaS (in our case, shopping carts) service a customer portfolio.
The implementation of a similar scenario may be challenging for such a platform. A platform needs to be capable of managing the whole portfolio of merchants at the same time.
The platform must provide merchants with an easy-to-use interface. Underwriting, payment reconciliation, and merchant statement generation are essential.