What is the best way to choose a crypto Payments Provider
Let us walk you through the crucial decisions that you'll have to take, and provide an overview of the options available in different kinds of options. Plus, we'll demystify some terms along the way.
Understanding the two approaches of crypto payments
If you want to accept cryptocurrency for your website There are generally two options:
- Cryptolite: If you'd like to use cryptocurrency to pay for your purchases and have no interest above that, this option is the right solution for you. You'll look for solutions to ensure that you have the right amount of cash to your bank account as fast and cheaply as is possible.
- More: This category can become complicated very quickly. If you'd like to retain the majority or even all of your crypto as digital currency, allow a greater variety of currencies or sell NFTs, then you'll require higher-end methods.
Choosing between a custodial and non-custodial crypto-payments company
If you're considering accepting cryptocurrency for your website the main option you'll be faced with is whether to choose a custodial or non-custodial payments service.
It's a good idea to make a choice of "crypto light" or "something more."
Payments providers that use custodial crypto
A lot of merchants choose this solution gives peace of mind and an easy user experience. It will provide support as well as terms of service, and can take advantage of other functions (such the automatic settlement of your bank) as your service provider manages the crypto accounts for you.
If you are looking to go with "crypto light," custodial crypto payments service providers are your only option.
The benefits of a custodial crypto payments providers comprise:
- A fully-integrated extension
- Ability to accept the use of one or more cryptocurrency from customers
- Directly into your bank account fiat currency
- Account access via an email and password
- Support services
- The lowest transaction fee and the guarantee against chargebacks and refunds
Providers of non-custodial crypto payment services
If you're knowledgeable about cryptocurrency and are looking to access more sophisticated features, you might want to think about a non-custodial option. When you use non-custodial options they will give you complete control , and the sole obligation to the security and management of your accounts in cryptocurrency. This isn't something to do lightly. But to store owners who are qualified, it unlocks the full potential of crypto.
Benefits of using a non-custodial Crypto payment service:
- You can access and manage your cryptocurrency as soon as it's accepted - no waiting for settlement from an outside entity.
- There are fewer restrictions on Terms and Conditions - No one can suspend or cancel your account or services.
- The actions you take are only subject to applicable laws and the capabilities of your individual. You are able to sell anything you'd you'd like, and control your cryptocurrency however you see best.
- Sole responsibility for your account's security - no hackers or data breaches from third parties can affect your funds.
Crypto vocab check
Fiat money: Currency issued by the state (e.g. USD, EUR, GBP).
Currency: A currency that is secure by cryptographic principles (e.g. BTC, ETH, DOGE).
Stablecoin: A type of cryptocurrency tied to fiat currencies. (e.g. USDC where 1 USDC = 1. USD).
Features of crypto payments providers
There are a lot of options to consider when choosing between a custodial and non-custodial provider.
Below is a full list of features as well as a list of considerations that illustrate the differences between the options. In using the table, be sure to be aware that this table is a high-level guide to what's possible. Some partners may not have every feature.
| The Feature | Custodial | Non-custodial |
|
A contract with a third person
When you sign up to an offer with a company which is subject to terms of service. |
Y | N |
|
Account recovery
If you are unable to access your account, you may request a password reset or access account recovery services by contacting the company. |
Y | N |
|
Support
It will be possible to connect and get assistance from the provider. |
Y | N |
|
Automatic exchange of stablecoin or other crypto
It is possible to opt to have your crypto changed to another crypto or stablecoin. |
Y | Y |
|
Automatic exchange of fiat currency
You may choose to have the crypto converted automatically to fiat. Be aware that the calculation of exchange rates and rates will vary by the partner. |
Y | N |
|
Automatic settlement of your account to your bank
You may choose to have your funds settled automatically to your bank. |
Y | N |
|
You will receive the exact amount of fiat currency
This can help avoid being exposed to volatility in the price of crypto. Solutions that are not custodial can reduce - but not eliminate - fluctuations by choosing to allow stablecoins. |
Y | N |
|
Specific features for merchants
Certain providers provide features that make it easier for merchants to save time and effort. This includes things such as risk profiling (to ensure your business doesn't get funds from fraudsters) and protection against overpayment or underpayment, as well as email invoices. |
Y | N |
|
Transaction finalization protection
Blockchains require 'blocks' being created to conclude transactions. The greater the number of blocks created following a specific transaction, the safer the transaction. Protection helps avoid sending out goods and then having a transaction be reversed. |
Y | N |
|
Insurance for funds
Custodial as well as non-custodial options are susceptible to hacking. Insurance on funds can safeguard the users of a custodial system. However, protection varies widely and it is important for merchants to research the insurance policies and refund policies. |
Y | N |
| Y | Y | |
|
Supports subscriptions/recurring payments
Paying with cryptocurrency, customers have to sign off on every transaction. So recurring payments are not an option, though certain custodial services offer the ability to generate and automatically send invoices according to a set schedule. |
N | N |
|
Low transaction fees
Custodial as well as non-custodial service providers usually offer considerably lower transaction fees (1-1.5%) that traditional providers (2-3.5%). |
Y | Y |
|
Exposure to crypto network (e.g. gas) fees
Direct cryptocurrency transactions come with specific network charges - for Ethereum being the most popular, they are referred to as 'gas' charges. Certain payment processors pay these costs, while some transfer these fees on to the user. |
N | Y |
|
Control solely
You are the only person with the ability to make transactions outgoing from your account. Any other person or entity cannot authorize transactions, unless they have access to your private password. |
N | Y |
|
Accept all cryptocurrency across any network
Payment processors that accept crypto offer a variety of crypto networks and coins. When you use custodial options, you're restricted by the currencies they can support. Other solutions are able to offer wider range of options. |
N | Y |
|
integration
While it's one thing to get a payment, it's another to identify which client made the payment and for what payment. Our partners offer solid integrations that cover everything from setting up to managing daily. |
Y | Y |
Review your options and choose the right cryptocurrency payments provider for your store
Cryptocurrency solutions can seem confusing It's worth the effort to provide solutions that are best suited to yours and your customers' demands. Take the time to navigate through the advantages and disadvantages of the two types of cryptocurrency payment services, take note of which one is the right fit for your business.