You probably think the crypto craze is only hype, but you might be wrong. The trend has gained a lot of traction and won new markets lately. Moreover, it doesn’t seem to be diminishing in scope. Quite the opposite, cryptocurrencies have started shaping the face of eCommerce in 2022. Global giants like Subway, Overstock, PayPal, Microsoft, and Facebook have already jumped on the crypto bandwagon. They have introduced a cryptocurrency payment system and take cryptocurrencies for their goods and services.
But why is this shift critical for business owners? Since fiat currencies operate within single or several countries, people face severe problems when executing international transactions. Besides losing money during currency exchange, they pay heavy transaction fees to banks. Also, regular transactions with conventional payment modes are time-consuming and sometimes unsafe.
Hence, many merchants have started looking for innovative ideas to eliminate such barriers. That’s where blockchain comes into play. An ever-growing number of companies resort to a cryptocurrency payment system that helps them upgrade their eCommerce business to new heights. This article explains the basics of crypto payment gateways and how they work. It also reveals the benefits of getting paid in digital assets and how to pick the best provider.
What Is A Cryptocurrency Payment System?
Unlike traditional payment processors, a cryptocurrency payment provider will help you accept digital currencies for your products. The party acts as a transaction facilitator between you as a merchant and your customers. An ideal payment gateway will let you accept both crypto and fiat currencies. The payment process would resemble that of using a credit or debit card. However, it will allow sending and receiving payments in several cryptocurrencies. This way, companies offering the crypto alternative to their customers ensure they have multiple payment options. Moreover, the system can operate without a payment gateway. Instead, you might use your e-wallet to accept crypto payments. The benefit of gateways lies in their ability to exchange cryptocurrencies and manage your wallet swiftly and securely.
How Does It Work?
Though there are many similarities, the cryptocurrency payment system differs from conventional platforms in several aspects. The main difference refers to payments that occur via digital wallets. Furthermore, buyers pay in cryptocurrencies, not in fiat currencies like USD, EUR, and AUD. But what does a typical crypto payment process look like? Here is a brief overview.
Payment Flow
For convenience, we’ve broken down the steps of the procedure. Let’s look at the workflow of the crypto processing gateway for transparency reasons.
- The customer pays in cryptocurrency at checkout (online, in-store, or in-app).
- The system charges the buyer an amount equal to the asset’s fair market value when the transaction happens.
- Your cryptocurrency payment system converts the payment into the selected currency.
- The service provider adds the assets to your account. It deposits the funds in your bank account in the intervals you agreed upon in the service contract.
What Is A Digital Wallet?
If you wish to accept crypto payments for your products and services, having a digital wallet is a must. The e-wallet can work within an app or separate software and act as a bank account. The main difference between bank accounts and digital wallets is that the latter are decentralised. You can choose between two crypto wallet types:
- Single-currency. These wallets take only one currency (for example, Bitcoin). This service best fits small merchants or investors working with a single currency.
- Multi-currency. Many business owners pick multi-currency wallets since they offer more payment options and hence, room for upscaling their operations.
Who Is Using It And Where?
Payment methods develop rapidly, from physical to cryptocurrencies, and so do payment systems. To meet the demand, industries such as healthcare, supply chain, education, and entertainment have already adopted blockchain technology. Top-notch companies like Wikipedia, Microsoft, Home Depot, NewEgg, and AT&T eagerly accept Bitcoins.
Moreover, over 300 million people, or about 2,9% of the world population, have used cryptocurrencies in 2022. The global crypto market cap reached $1.06 trillion on August 1.
In economic terms, about 18,000 businesses accept cryptocurrency payments. More specifically, about 36% of small businesses in the USA have installed a cryptocurrency payment system.
Finally, these gateways aren’t mandatory, but they reduce your workload. The system will remove much confusion, anxiety, and speculation associated with decentralised and unregulated digital assets.
Why Are Crypto Payments Growing In 2022?
Before anything, business owners must consider the pros and cons of crypto payment gateways. Only then can they understand why more and more people choose to pay in crypto this year. Below, we list the most favourable aspects of a cryptocurrency payment system.
- Merchants can take payments from any country in the cryptocurrency they prefer.
- Transactions through a payment gateway are fast, secure, and transparent.
- Once the payment gets processed via the payment channel, chargebacks and refunds are no longer possible.
- Business owners receive the funds in the selected account with their provider, who executes the transfers.
- Unlike fees imposed by traditional banks, there are no hefty charges.
- There is no need to understand blockchain and crypto concepts in detail or worry about transactions.
- The volatility risk lowers since the cryptocurrency’s network pays you the current market rate for the assets at the time of the transaction.
Implement Crypto Payments With NextHash
If you are a merchant or a business owner looking for innovative ways to accept payments, try NextHash. The services this gateway provider offers are reasonably priced and beneficial for your overall operations.
NextHash will act as an intermediary and provide an immediate exchange for fiat currencies. In short, you will give your clients multiple payment options, and the cryptocurrency payment system will let you conduct your finances the way you prefer.
Most forward-thinking merchants have already embraced the novelty and implemented crypto as a payment method. Early movers are already reaping the benefits of the crypto revolution, so why waste time? The sooner you introduce a cryptocurrency payment gateway, the more profits you generate.