What is the best way to accept crypto as a payment method? If that’s your question, this piece is the answer you’ve been looking for.
We will discuss how Blockchain payment works and how best to accept payments. To keep this piece unbiased, I’ll discuss all the available options as well as the pros and cons of each possible mode.
Let’s not waste time and get started.
Table of Contents
Understanding cryptocurrency and Blockchain payment systems
Before we share the best way to accept crypto as a payment method, it’s pertinent we understand how Crypto payments work, isn’t it?
Well, contrary to popular belief, Crypto payments are NOT private. In fact, they’re arguably the most transparent and public payment mode the planet has seen.
Every payment from point A to point B is recorded on a public ledger called the Blockchain. Anyone can independently and freely check almost every detail about the transaction on this public ledger.
These public details include all the involved addresses, transaction amount, total funds in any address and so on.
This transparency has its benefits, as well as flaws. The benefit of course is that it reduces scams and allows anyone to check transactions.
The flaw is that it’s a bit too open. Anyone can have access to the transaction information and it can then be analyzed to reveal personal information about the involved parties. At the least, a few digital attacks can be mounted.
This is why when accepting crypto payments, you need to do it right. That’s what we’ll discuss next.
How to accept crypto payment methods?
Well, there are a number of ways you can do this.
- The simplest (but less secure and less feature-rich) option is to simply include your Crypto wallet address on the payment page.
- The better option is to use a secure, feature-rich payment processor such as Finrax.com
How is one option better than the other? Allow me to explain.
Benefits of using your own crypto wallet
The obvious benefit is that you get all the money in your wallet. You retain 100% control of all the funds at all times.
Secondly, you do not pay any additional fee for payments or transactions. Those two are probably the only two benefits of using your own Crypto wallet instead of a payment processor.
Problems of using your own Crypto wallet
While using your own wallet has its benefits, it has its share of problems as well.
- Limited coins: Each coin has a different address. Depending on which Cryptocurrency your customer chooses to pay with, you’ll need to include dozens of Cryptocurrencies. Even then, a few may be missed.
- No automated fiat-to-crypto support: In most cases, your clients will have to pre-convert their funds to a suitable Cryptocurrency before being able to pay you.
- Risk exposure to your wallet: Your address can be analyzed to reveal the total funds, past transactions and a lot more.
- Legal compliances: Accepting Cryptocurrency involves a lot of legal issues. You’ll need to comply with different laws based on your jurisdiction as well as your customers.
- Security: The responsibility of managing security for all your wallets, for all the different cryptocurrencies lies with you.
- Accounting errors and hassle: Managing multiple wallets, for multiple Cryptocurrencies with a continuous inflow of payments isn’t easy. You’ll have to manually track all orders, total revenue, tax and other aspects.
- Price fluctuations: Cryptocurrencies are extremely volatile. It’s possible that you receive less or more funds than what should have. This leads to refunds and unhappy customers.
There are a few other reasons why I feel it’s not the most practical way of accepting crypto payment methods.
Benefits of using third-party Crypto payment processors
In my opinion, using a payment processor like Finrax is better than using wallets manually. Let me explain why.
- Automated and multiple Cryptocurrency options: Your customers can simply choose the Cryptocurrency they wish to pay with. This gives both you and them more options.
- Personal wallets do not get exposed: These payment processors do not display your wallet’s address for payments. Rather, an auto-generated address is displayed that keeps your primary wallet and accounts safe.
- Price-locks: Despite Cryptocurrency price volatility, good payment processors have a lock-in mechanism. They lock the price any party wishes to pay for a fixed amount of time (about 30 minutes). This ensures both parties receive what they agreed on.
- Fiat conversions: These payment processors also often help you instantly convert your Cryptocurrencies to fiats. This ensures the liquidity of your funds.
- Invoices and payment links: Professional-looking invoices that the other party can pay instantly and securely, sounds nice, doesn’t it?
- Detailed reports: Payment processors also store and let you export detailed reports of all your transactions, profits and everything else regardless of how many different Cryptocurrencies are used.
- Legalities: The payment processors ensure all the right consents and information has been acquired before allowing a payment. This makes sure you do not find yourself stuck in a legal hassle or buried in paperwork.
While the list isn’t all-inclusive, I’m sure you have a decent idea why using payment processors is a better idea, isn’t it?
Conclusion- What is the best way to accept crypto as a payment method?
That’s it folks. If you ask me, using a secure payment processor is the best way to accept Crypto as a payment method. As explained earlier, it makes payments easier and takes care of reports, legal issues, and more.
As for the payment processor, you can pick any processor with a low fee, supports a wide range of Cryptocurrencies, and offers the other features we’ve discussed so far.
