There is a lot of buzz around cryptocurrency these days. The first decentralized cryptocurrency, Bitcoin, was launched more than 10 years ago, and today the list of currently available crypto coins is almost endless. Since new initial coin offerings (ICOs) having their own coins start almost on a daily basis, the number of availability coins continues growing at a rapid pace.
Cryptocurrency is turning into a popular means of payment in different industries. When it comes to ecommerce, crypto payments are slowly gaining traction as most merchants still remain uncertain whether to start accepting them at their stores.
Forward-thinking online retailers don’t jump on the bandwagon, they consider all the pros and cons first. To find out more about cryptocurrency payments and learn how to add this form of payments to an online store, read on the article.
Even though many online businesses are still cautious about accepting crypto coins as a means of payment, some world-famous sites already offer such a payment option. And here’s why.
E-stores often deal with different types of fraud, out of which chargeback fraud is the most common one.
Why? Committing it is as simple as ABC. All that malicious individuals have to do is order a product using a credit or debit card and when the order arrives they ask for the card issuer a chargeback claiming that they never received it, a theft stolen the card, or invent a similar excuse. If the request is approved, the consumer is given a refund.
With crypto payments, an online business will never fall victim to such fraud. In a nutshell, these payments cannot be reversed as they are powered by blockchain. There’s no card issuer able to carry out a chargeback procedure for the customer, making chargeback fraud impossible.
Payment gateways used by an online business often charge certain fees, and these fees are not as low as they seem to be at first sight. For instance, according to the all-in-one plan offered by Authorize.net e-merchants are charged 2.9% + 30¢ per each transaction, and they also have to pay $ 25 every month for using the gateway.
Though cryptocurrency is usually associated with high costs, this isn’t true about transaction fees. For expensive orders, a fee charged by the Bitcoin blockchain for a transaction will be lower than that of a conventional payment gateway as its amount primarily depends on how quickly you wish to complete the transaction.
Note that some cryptocurrency payment providers charge zero fees from e-retailers, while others charge a lot. So read terms on the site carefully before saying “yes” as there may be much more attractive options.
The number of people who opt for anonymity is growing continuously as consumers become increasingly irritated by the fact that they are tracked by corporations, financial institutions, and governments almost every second of their life.
Cryptocurrency allows users to pay anonymously, eliminating a middleman (e.g., a bank) who has access to the name of the customer, his/her email and physical address, and other identity-related details. On blockchain, transactions are not linked to either a person or an identity.
Enabling crypto payments at your store, you increase customers’ trust, and so maximize your chances to entice crypto and blockchain enthusiasts into shopping on your site.
In an ideal world, money paid by a customer for an order arrive in the merchant’s bank account within seconds. The truth is that it takes much longer to process payments as a centralized institution that checks transactions is always involved.
For crypto payments, no third party is needed as all blockchain itself is capable of checking, confirming, and processing transactions. It means, that you’ll receive crypto coins times faster than any other fiat money.
But there’s always a flip side of the coin, and crypto payments are no exception.
For blockchain, decentralization means not only anonymity but also the absence of clear regulation. Some countries allow their citizens to use crypto, while others ban or restrict it and crypto exchanges are illegal there.
So the crypto payment option at your store may scare away shoppers from countries where crypto is illegal. Make sure to define clearly your target market and double-check that crypto is legal there.
Though major coins such as Bitcoin and Ethereum are becoming more or less stable, there are hundreds of altcoins price of which is subject to change.
Since there’s no single financial institution responsible for regulating crypto and physical assets tied to it, it’s hard to predict price fluctuations, meaning that you may get less for your product than in fiat money.
Reliable payment platforms such as CopPay address this issue by automatically exchanging the received crypto coins to fiat money and sending the full order amount in, say, euros to the merchant’s account, eliminating volatility risks.
Non-tech-savvy store visitors may feel confused when seeing a new payment option. If such shoppers have some crypto in their wallets, be prepared that they will have numerous questions about every step of the payment process.
Preparing a step-by-step instruction for users is a bright idea in this case. Include all the necessary details and add screenshots to make sure that you haven’t missed anything important.
No matter whether you already arrived at a decision to accept crypto payments from your customers or haven’t made a choice yet, this section is definitely worth your attention.
There are three ways to start accepting crypto on your site.
You may receive crypto payments directly if you wish. The first step is to create crypto wallets for each cryptocurrency you want to accept. To convert your coins into fiat, set up a wallet on an exchange that supports such conversions.
That’s not all! Now you need to somehow integrate crypto payments into your store and make the whole process secure. This is impossible without relevant web development skills and knowledge of blockchain technology. So if don’t have such experts in-house you will have to find someone to do that for you.
Cryptocurrency payment providers offer both payment gateways and integration services. They will do all the work but their services are likely to cost a pretty penny.
And don’t forget – payment processors often charge a certain fee for each transaction. To eliminate unnecessary expenses, start with a standard plan first to be able to customize it to your store’s needs whenever you want.
If you are running a store based on a content management system (e.g., WordPress) or an ecommerce platform (e.g., Magento or Shopify), pay attention to plugins offered on their marketplaces.
Some of them are free and charge no transaction fees from e-merchants such as CopPay Payment Gateway for Magento.
These modules can be the perfect choice for your online store. For instance, the above-mentioned module allows accepting payments in most popular cryptocurrencies and receive payments either in crypto coins or fiat money.
Cryptocurrency is much more than a buzzword today – it’s an increasingly popular means of payment.
Enabling it at you online store, you will boost customer loyalty and be able to target a larger audience than your competitors do. Though such payments entail certain risks and may require additional investment, you’ll definitely get a lot of bang for your buck.
Aitoc is a young team of passionate professionals delivering robust Magento extensions. Founded in 2001, Aitoc has produced over 100 modules for clients worldwide. The company continuously evolves, now offering a full range of custom ecommerce development services.