Over the course of its existence, cryptocurrency has shifted further away from being a mere tool for investors but rather a more solid form of payment medium. Cryptocurrency payment gateway solutions are increasingly gaining traction with various merchants and platforms. They seek an ideal payment gateway solution that would allow them to accept cryptocurrencies. Furthermore, PayFacs seek merchant services dealing with cryptocurrencies from third-party and white-label platforms.
The significant advantage of paying in cryptocurrency over more traditional forms of payment is the fact that there are fewer transaction fees to pay. Since there is no need for clearing houses, banks, or other middlemen, it allows you to trim the transaction fees.
However, accepting crypto payments is an entirely different story in comparison to other currencies. If you want your business to be able to accept cryptocurrencies, there needs to be a tremendous amount of consideration put into place. It is especially important to consider which cryptocurrencies your business should accept and which platforms are capable of supporting your chosen cryptocurrencies. Let’s examine the details further.
Payment Solution Features
Tips for Merchants
Multiple blockchains have been created in the time since the inception of cryptocurrencies. There are many cryptocurrencies, including BSC, Polygon, Avalanche, and Fantom. Out of these, Bitcoin and Ethereum have gone beyond just making a name for themselves and have become some of the most recognized cryptocurrencies.
For many people, cryptocurrency remains an asset with high fluctuations in value and, thus, a precarious investment. However, some cryptocurrencies have managed to solve the volatility issue. Stablecoins have managed to curb cryptocurrency’s high volatility by pegging the value to the US dollar. USDT, BUSD, and USDC are all examples of such stablecoins.
Just as their name suggests, stablecoins are stable. However, they are only accepted by some blockchains. For instance, the Ethereum blockchain allows for the support of several stablecoins, but Bitcoin does not.
Similar to credit card transaction fees, gas fees are of the same principle in the crypto space. Analogous to other payment processors, blockchains act as one for cryptocurrencies. Gas fees can vary based on what blockchain processes the transaction. For example, Ethereum has relatively high gas fees, meaning smaller transactions become less worthwhile to process. While it may be beneficial to seek other blockchains with lower gas fees, like BSC or Avalanche, using less well-known blockchains could be problematic. Let’s look closer at what some problems could arise.
Converting to Fiat
Due to the unregulated nature of the crypto sphere, converting cryptocurrency to fiat can take time and effort. First and foremost, it is critical to determine the specific currencies you want to deal with in order to find the most effective blockchain for your purposes.
The main methods of converting cryptocurrency into fiat are either through a centralized exchange (CEX) or a cryptocurrency card. A cryptocurrency card works by buying fiat by slowly selling cryptocurrency as you make purchases. On the other hand, converting via the CEX includes a special wallet from which cryptocurrency can be withdrawn or deposited to.
It is crucial to remember that trading on a specific blockchain means that the CEX only allows deposits or withdrawals to be made in one cryptocurrency pertaining to that specific blockchain. This is how a blockchain is able to charge transaction fees. Examples of blockchains and their respective cryptocurrency are Binance Smart Chain and BNB, Ethereum, Ether, and Avalanche with AVAX.
Stablecoins can be exchanged through Ethereum. As mentioned previously, Ethereum has high gas fees, so it is unreasonable to do smaller transactions through Ethereum. While stablecoins are less volatile than other cryptocurrencies, the problem with depositing and withdrawing still remains an issue to be solved. However, this may change if payments can be made with stablecoins without having to convert them to fiat.
What blockchain will suit your business most effectively highly depends on the cryptocurrencies used by your business and the business model employed. It is essential to consider what cryptocurrencies to use and what blockchain to choose.
If you want to learn more, you may be interested in becoming familiar with our specialists and the UniPay Gateway solution. The UniPay Gateway is an omni-channel and crypto-friendly technology used worldwide by software platforms, PayFacs, and other companies.