Crypto payment processing involves handling transactions conducted using cryptocurrencies.
With the rising popularity of crypto payments, conventional payment service providers are also entering the arena of providing crypto payment processing services.
Advantages and disadvantages of crypto payment processing
Although there are numerous advantages associated with processing crypto payments, there are also several potential drawbacks to contemplate when deciding on the suitability of this approach for your online business.
Advantages:
1. Decentralization
Cryptocurrency payments operate without central control, enhancing transaction speed, affordability, and security.
2. Swift and secure transactions
Crypto transactions boast rapid processing, leveraging blockchain technology’s robust security measures.
3. Cost efficiency
Lacking intermediaries, crypto transactions generally incur lower fees compared to conventional methods like credit cards and bank transfers.
4. Global reach
Cryptocurrency payments transcend geographical boundaries, permitting worldwide transactions, a boon for businesses with a global presence.
5. Privacy
Certain cryptocurrencies offer increased privacy, catering to individuals valuing discretion and data security.
6. No chargebacks
Unlike traditional payments, crypto payments are immune to chargebacks, shielding companies from potential revenue loss.
Overall, the advantages of crypto payment processing present an appealing solution for businesses aiming to streamline payments and cut costs.
Drawbacks:
1. Volatility
Cryptocurrencies are renowned for their volatility, making it exceedingly difficult to buy and sell assets like Bitcoin or Ethereum at consistent prices. For that reason, accepting cryptocurrency payments exposes merchants to the risk of receiving less than expected.
2. Scalability
Cryptocurrency networks often lag behind traditional fiat systems in terms of processing speed. For instance, the Bitcoin network handles a mere 4–5 transactions per second, while Ethereum manages up to 30 transactions per second. Ripple can process up to 1,500 transactions per second, and EOS up to 4,000. In stark contrast, Visa can handle an impressive 24,000 transactions per second.
3. Regulatory hurdles
Given that cryptocurrencies lack legal tender status in most jurisdictions, merchants who accept these payments can face legal complexities. Moreover, challenges arise when calculating and settling taxes for income or profits obtained through cryptocurrency transactions.
How to integrate cryptocurrency payments on your website:
You can implement cryptocurrency payments on your website through various approaches. The simplest method involves creating a cryptocurrency wallet and sharing its link on your online store’s page.
Another option is to get a custom payment solution developed, although this one tends to be costly and typically becomes financially viable only for businesses with substantial trading volumes.
For a straightforward and pragmatic solution, consider integrating a specialized cryptocurrency payment service. This software-like tool streamlines payment processing and division.
Typical features of such services encompass recording payer information, real-time conversion at prevailing exchange rates, validation procedures, receiving funds from buyers, transmitting accumulated funds to the merchant’s cryptocurrency wallet, confirming successful payment processing, and recording transaction details on the blockchain.
Despite the ongoing advancements in cryptocurrency payment processing, finding a suitable and user-friendly service remains a challenge. Obstacles may include intricate verification processes, stringent connection prerequisites, complex integration procedures, and no fast support in languages like Ukrainian and Russian.
Cryptocurrency Processing at SharPay:
If you’re looking to start accepting cryptocurrency payments, SharPay is one of the most user-friendly options to explore.
SharPay’s crypto processing is flexible enough for any industry and requires only basic details about your business to get set up.
SharPay is a technical platform designed for developers that offers a simple and straightforward interface for automating tasks involving cryptocurrencies.
SharPay’s cryptocurrency processing has many benefits besides its ease of integration, including a high acceptance rate, assistance with integration, no exchange rate risks, swift support without language obstacles, an intuitive payment page interface, a guarantee of user security, and speedy withdrawal of funds.
Receive stablecoins, Bitcoin, Ethereum, Litecoin, and other cryptocurrencies from end users anywhere in the world.
How crypto payment processing works end to end
Cryptocurrency payment processing is the whole path between a customer choosing to pay in coins and euro arriving in the merchant’s account. Five stages, and each one is where a cheap provider cuts corners:
- Invoice. The amount is fixed in euro, the rate is locked for a short window, and an address with a QR code is issued.
- Transfer. The customer sends the coins on the chosen network.
- Confirmations. The payment counts only after the network confirms it — protection against reversal and double spending.
- Notification. A webhook tells the shop the order is paid, with the transaction hash for reference.
- Conversion and settlement. Coins are converted and the euro amount is paid out to the company account on the settlement schedule.
The difference between crypto processing and simply holding a wallet is stage five: the merchant does not stay in coins, and the exchange risk sits with the processor rather than with the shop.
Disadvantages of cryptocurrency payments worth planning for
An honest list matters more than a sales pitch, because each of these costs money if it surprises you:
- Irreversibility. A payment sent to a wrong address cannot be recalled. Refunds have to be a separate outgoing payment, with its own cost.
- Network fees and speed. They belong to the blockchain, not to the processor, and rise exactly when the network is busiest.
- Volatility between payment and settlement — handled by locking the rate at invoice time, which is why the lock window is short.
- Underpayment and overpayment. Customers send the wrong amount more often than you would think; the rules for handling it must be in the contract.
- Compliance load. KYB on the merchant, monitoring, travel-rule data — the reason legitimate onboarding takes documents rather than an email address.
Terms here are the same as for cards: MDR 3 %–5 %, 0.50 EUR per transaction, euro settlement via SEPA 0.20 %, T+7. See payment processing and merchant accounts.