There is a lot of buzz around cryptocurrency these days. The first decentralized cryptocurrency, Bitcoin, was launched more than ten years ago, and today the list of currently available crypto coins is almost endless. Since new initial coin offerings (ICOs) have their coins start almost daily, the number of available coins continues to grow rapidly.
Cryptocurrency is turning into a popular means of payment in different industries. Regarding eCommerce, crypto payments slowly gain traction as most merchants 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. Read the article to learn more about cryptocurrency payments and how to add this form of payment to an online store.
Pros of Enabling Crypto Payments at Your Store
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.
chargeback fraud is the most common.
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. When the order arrives, they ask the card issuer for a chargeback claiming that they never received it, a theft stole 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. No card issuer can carry out a chargeback procedure for the customer, making chargeback fraud impossible.
Payment gateways used by an online business often charge certain fees, which are not as low as they seem at first sight. For instance, according to the all-in-one plan offered by Authorize.net, e-merchants are charged 2.9% + 30¢ per transaction and must 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. Read terms on the site carefully before saying “yes,” as there may be much more attractive options.
More Potential Customers
The number of people who opt for anonymity is growing continuously as consumers become increasingly irritated because 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 customer’s name, email and physical address, and other identity-related details. On the blockchain, transactions are not linked to a person or an identity.
By enabling crypto payments at your store, yo increasestomers your trust and maximaximizesr chances of enticing crypto and blockchain enthusiasts into shopping on your site.
A customer’s money for an order arrives in the merchant’s bank account within seconds in an ideal world. It takes much longer to process payments as a centralized institution that checks transactions is always involved.
No third party is needed for crypto payments, as all blockchains can check, confirm, and process transactions. You’ll receive crypto coins times faster than any other fiat money.
Drawbacks of Accepting Cryptocurrency
But there’s always a flip side to the coin, and crypto payments are no exception.
For blockchain, decentralization means anonymity and the absence of clear regulation. Some countries allow their citizens to use crypto, while others ban or restrict it, and crypto exchanges are illegal.
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, hundreds of altcoin prices are 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 for fiat money and sending the full order amount in 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 to have numerous questions about every payment process step.
Preparing step-by-step instructions for users is a bright idea in this case. Include all the necessary details and add screenshots to ensure you haven’t missed anything important.
Introducing Cryptocurrency Payments at an Ecommerce Store
No matter whether you have 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.
Receive Payments with No Third Party Involved
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 integrate crypto payments into your store and make the process secure. This is impossible without relevant web development skills and knowledge of blockchain technology. So if you don’t have such experts in-house, you will have to find someone to do that for you.
Using Third-party Services
Cryptocurrency payment providers offer both payment gateways and integration services. They will do all the work, but their services will likely 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 to customize it to your store’s needs whenever possible.
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 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 module mentioned above allows accepting payments in the most popular cryptocurrencies and receivinreceiving payments in cryptoumming Up
Cryptocurrency is more than a buzzword today – it’s an increasingly popular means of payment.
Enabling it at your online store will boost customer loyalty and target a larger audience than your competitors. Though such payments entail certain risks and may require additional investment, you’ll get a lot of bangs.
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, offering a full range of custom eCommerce development services.