Cryptocurrency has had a great year in 2021, with Bitcoin reaching new all-time highs at publication. Additionally, El Salvador became the world’s first country to recognize Bitcoin as legal money.
With bitcoin gaining traction in various sectors, retailers may be wondering how to locate a crypto payment processor or set up a cryptocurrency payment system. It’s still early in the game for crypto payment processing, but we’ll look at several choices for companies interested in experimenting with cutting-edge alternative payment technologies below.
Why Do Customers Want To Pay With Cryptocurrency?
According to a recent University of Chicago poll, around 13% of Americans exchange cryptocurrencies. While many cryptocurrency holders enjoy trading to enhance their wealth, an influential group is still interested in using the technology for payments, decentralized finance (Defi), and non-fungible tokens (NFTs).
These people regard cryptocurrencies as an asset and an investment in infrastructure that eliminates banks and credit card networks.
In another way, some cryptocurrency owners want to use their cryptocurrency as money to buy goods and services. Businesses that accept cryptocurrencies may be able to exploit a niche if they target these customers strategically.
The Top 5 Crypto Payment Gateways and Processors
While bitcoin may typically be transferred peer-to-peer through crypto applications or QR codes using hashes (copied, pasted, texted, or emailed), payment gateways and similar services bring extra payment processing capabilities and convenience to cryptocurrency transactions. The following are some of the most innovative cryptocurrency payment gateways currently available.
Bitpay, an American firm, is a pioneer in the field of crypto financial infrastructure. It started operating in 2011, less than 2.5 years after the Bitcoin network started. In September 2013, while the cryptocurrency industry was still in its infancy, the payment gateway BitPay achieved 100,000 users and processed 270 830 BTC ($34 million) in transactions.
In 2018, the volume of transactions topped $1 billion. This is partly due to the surge in popularity of bitcoin as a mode of payment among the payment gateway’s B2B customers.
BitPay is a payment gateway that specializes in settling payments through invoices issued by online merchants for products and services at a predetermined price. Bitpay charges a 1% transaction fee.
If a seller wishes to accept payment in fiat currency, BitPay facilitates the immediate translation of cryptocurrencies into US dollars, euro, British pounds, and other fiat currencies. Additionally, merchants may withdraw fiat from their BitPay account to their bank accounts.
Commerce by Coinbase
Coinbase is one of the world’s largest cryptocurrency exchanges. Its primary market is the United States. Coinbase established the crypto payment gateway in February 2018, widely considered one of the most dependable and popular payment gateways for the e-commerce industry. Coinbase Commerce, like BitPay, operates based on invoicing for fixed-price products and services.
Coinbase Commerce’s positioning on the market as a solution for Internet merchants interested in taking cryptocurrency has resulted in the payment gateway pursuing collaborations with major e-commerce businesses. Coinbase Commerce linked its services in this manner with Shopify and other e-commerce platforms, including Magento and OpenCart.
Coinbase Commerce states that there is no price associated with withdrawing money from a merchant’s account on the platform. The only fee associated with transaction execution is the network fee charged by miners. However, many customers have lately noted that Coinbase Commerce’s ‘network cost’ is substantially greater than other platforms, sparking concerns regarding hidden merchant fees.
CoinGate, founded in 2014, is another stalwart of the crypto processing gateway sector. In 2018, the firm became one of the first bitcoin infrastructure providers to adopt the Lightning Network, a solution to the bitcoin network’s scalability issue. It aided in increasing transaction volume.
CoinGate, like BitPay and Coinbase Commerce, focuses on e-commerce and handles cryptocurrency payments through invoicing. Merchants may link the gateway with their e-commerce platform through an API and an e-commerce plugin. Sellers have the option of accepting payment in cash or cryptocurrency. CoinGate immediately converts fiat (euro or US dollar) money. Additionally, the seller may choose the cryptocurrency in which they desire to be paid. CoinGate will also do the automated conversion if the buyer uses a different currency. The commission is standard for the market, at 1%.
AlfaCoins does undercut the majority of its rivals by charging 0.99 percent transaction fees rather than the standard 1%, but that 0.01 percent probably won’t be enough to sway the decision to use them as a crypto gateway. Rather than that, you’ll be attracted to AlfaCoins’ adaptability.
AlfaCoins allows a great deal of influence over the outcome of a transaction. That 0.99 percent service charge? Everyone will get limited volatility protection that will lock the exchange rate for 15 minutes after generating an invoice. The CoinSplit function enables to allocate a portion of an invoice to a particular cryptocurrency while paying the remainder in another currency (including fiat). This enables merchants to control the amount of cryptocurrency exposure they want to have in any particular transaction.
CoinPayments is a cryptocurrency payment gateway that stands out due to its extensive list of supported coins. Customers may use the program to pay for goods at internet stores using a record number of coins, 1860.
CoinPayments offers some of the lowest commissions in the industry, which is one of its competitive advantages. The service is processed in less than 0.5 percent of the time.
CoinPayments, like other cryptocurrency processing providers, offers users a shopping cart plugin. Payment gateway integration is possible through API.
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The surge in demand for crypto processing services illustrates that companies need such services due to the many benefits of crypto processing over conventional banking services.
If you’re considering taking cryptocurrency payments in return for products or services, consider yourself an early adopter of what might be a big shift in payment technology.
Finally, one of the most perplexing unresolved issues facing internet merchants is the high rate of fraudulent chargebacks. Chargebacks are not feasible in crypto processing because blockchain transactions are irreversible and can be executed only by the cryptocurrency’s owner using a private key.