Decentralized payments that happen exclusively in digital environments have become extremely popular. Alternatively to traditional payment systems, crypto transactions don’t even involve real, physical money - fiat currencies. And people and businesses alike are more than eager to explore this novel world of virtual cash.
According to statistics, every tenth inhabitant of the planet has a cryptocurrency wallet. In just one day in March 2023, almost 4 thousand payments per second were registered going through those wallets. Such means of payment are convenient and beneficial since they do not imply limits, transactions with them are transparent, and they are practically unaffected by politics or economics.
The main advantage is the ability to pay from absolutely anywhere in the world while you are online. Other benefits include:
- Lack of a single control center
- Resulting reinforced security
Transactions are encrypted using an intricate cryptographic method. Each system node has equal system rights and cannot be tampered with, and each wallet user has a unique key. This eliminates fraud, blocking, and manipulation of payments.
The ease of creating new wallets and conducting transactions perfectly complements their reliability. This is why more and more decentralized projects emerge, the role of which will only grow on a big scale.
At Defiway, we help companies and entrepreneurs get unique solutions for accepting crypto payments, including crypto wallets, crypto payment website integrations, crypto salary payouts, and cross-chain crypto bridges.
This article explores how you can start working with crypto payment the right way based on our own experience.
Setting Up Your Wallet
You can accept cryptocurrencies both online and physically, via a website or in a brick-and-mortar store. But first, you need a secure place to store your decentralized currency. For this, special e-wallets powered by blockchain are used.
Such a wallet works with the help of public and private keys. A public key is a random string of characters representing the address where coins and tokens can be sent. It is used to direct the transfer of funds. Private keys are required to access the underlying funds by wallet owners.
Most crypto e-wallets work like regular fiat e-wallets. For instance, in the case of a physical store, a salesperson specifies how much crypto is needed as a payment, and the wallet generates a QR code. The buyer scans it using a mobile app and confirms the transaction.
The most important thing is to set up your perfect crypto wallet that fits your particular business processes and needs. Here are the crucial steps you need to handle
Choosing which cryptos to accept
This is an important step that determines your wallet’s efficiency in the long run. But there are too many types of cryptos out there - how do you decide? You have to narrow down their scope anyway because different currencies may fall under different local circulation regulations. You don’t need the challenge of avoiding legal friction.
Just go for the same principle as when choosing fiat currencies. That is, it makes sense to connect the most common and popular titles. To make a final decision, consider also the coin’s innovativeness, independence, and growth prospects.
For instance, Bitcoin remains the most popular cryptocurrency. This is the undisputed leader, but it is gradually losing its positions, giving way to competitors with newer tech. Today, bitcoin faces a ton of alternative coins available outside of the top ratings that many may find more convenient.
We’d recommend paying attention to Ethereum, BNB, USDC, and USDT. They have great market prospects, so you can't go wrong. However, to lead in this aspect, you should stay dynamic - follow the latest tendencies and trends. Something entirely new may appear on the market to make you completely reconsider your point of view.
Integrating payment gateways
The best-fitting payment gateway integrations are largely dictated by the platform your website is hosted on. For Shopify, WooCommerce (WordPress), and Magento, various plugins are used for quick setup, or alternatives are applied, such as payment buttons, custom integrations, and invoices.
The wallet stores your crypto, and it requires a payment gateway to set off transactions with it. This integration ensures the seamless transfer of cryptocurrencies and allows merchants and users to make transactions in bitcoins and altcoins.
The gateway gives you flexibility as you can instantly convert your cryptocurrency to another type or even to a fiat one like USD. Payment processors allow you to set up automated transfers of fitting finances to merchants' wallets. The disadvantage is small payment fees (usually no more than 1%).
In order to enable the processing of cryptocurrencies on the website on your own, you will need a server with sufficient free memory (starting at several GB). Then, you do the following:
- Install the wallet with the necessary cryptocurrency;
- Set up the API interface;
- Create a form on the site.
From there on out, you can provide the users requesting payments with the funds transfer address and keep checking the list of wallet transactions (e.g., using Cron) until the payment arrives.
The receiving address can be made permanent for the user, or a new one can be created for each payment. The first option is more convenient if users have to register and pay frequently, but it is less secure (for example, you can easily track all funds receipts to the user's account).
The second option is more secure (since it is more difficult to track recurring payments) and simple, but it can become a problem when using not very powerful hardware (each generated address increases the load on the node, but this becomes noticeable only at a few million addresses).
Displaying payment information
If you are looking to provide a high-quality service, you must maintain the transparency of both transactions and the client's path to them. Hang banners on the site highlighting new payment opportunities. Describe what benefits they offer.
Your user needs to know what coins they can pay with and what methods are available to them, including supported payment systems (e.g., PayPal, Swift, Google Pay, etc.). For each, indicate its capabilities, features, and what it is best suited for (like fees and international or local payment limitations if there are any). Full customer awareness is the key to success.
Enable payments during the checkout process. Just add a fitting plugin or app to your eCommerce platform. You can also integrate payments using HTML code from your wallet, as provided by BitPay and Coinbase.
All in all, the online payment experience you provide must display the following information:
- Operating costs - all of them.
- Payout frequency - some processors handle payouts in a day, others in three to five.
- Supported countries - make sure your payment system supports the countries in which you do business.
- Tech support service -clients must get immediate help with any problems.
- Safety - keep users informed about the latest security updates.
Be sure to post liability warnings, as transactions are not retroactive on the blockchain.
Your customers must clearly understand how to manage crypto settlements on your website. You need to make sure all processes are tracked, and risks are minimized. Optimizing crypto payments management is a great opportunity to demonstrate your brand’s professional attitude and boost user loyalty.
To keep everything under your thumb and make the system work for you, we recommend:
- Making sure all cryptocurrency payments are recorded on the same platform that keeps track of other business transactions. This can be customized by integrating payments with your current accounting software.
- Offering users to convert coins to cash immediately after receiving them. Even better, you can provide the ability to set up an automated process. Cryptos' high volatility and lack of stability create risks that are sometimes impossible to foresee. This leads to large financial losses, and such a solution will allow your customers to avoid them.
The ultimate combination of security and convenience is what you should be aiming for. If you have that to offer, it is a mutually-beneficial service.
Accepting cryptocurrencies as means of payment can be an excellent booster for your business. It can help you expand the available number of payment methods, reduce the total transaction fees, and attract more customers. Cryptos come in especially handy if you are focused on international trade.
Timely integration of crypto options on your website or online store is a well-tried way to grow conversion rates and improve overall financial performance. All you need is a reliable tech solution to enable crypto payment processing, all the rest will come - good luck!