Integrating Crypto Payments into Your Business Strategy

Unveiling Real-World Use Cases for Crypto Payments

Over the past decade, the digital payment landscape has transformed significantly, and several new payment initiatives have been introduced, such as open banking, instant payments, buy now pay later, and CBDCs.As regulatory frameworks in certain jurisdictions have become clearer, crypto payments have also successfully permeated traditional market sectors such as e-commerce, travel, and online gaming.

There are More Than 15,000 Businesses That Accept Crypto Payments Around the World.

Leading payment companies such as Mastercard, Visa, PayPal, Stripe, and Venmo have partnered with crypto companies, making crypto payments available to millions of users. Major retailers like Overstock, Microsoft, Expedia, and Starbucks now accept crypto as payment, allowing customers to purchase goods. Other big-name companies such as Twitch, Norwegian Air, Etsy, and Burger King have also integrated crypto payments.

Crypto Payments Adoption by Large Enterprises

According to a report published by PYNMTS in 2022, over 85% of big retailers currently offer crypto as a payment method. The report surveyed over 2330 merchants with a minimum of USD 250mn in annual online sales and found that almost half of all merchants surveyed accept crypto.

WeWork is one example of a company that both sends and receives crypto payments. It began accepting crypto payments with BTC, ETH, USDC, PAX, and several other cryptocurrencies as payment for its offerings. The company plans to hold crypto assets on its balance sheet and also pay landlords and third-party partners in cryptocurrencies.

WeWork Chairman and Softbank Group International CEO, Marcelo Claure, said:

"When we think about the workplace of the future and business, we have to consider cryptocurrency a central part of that conversation. Cryptocurrency helps build a stronger global economy and WeWork's announcement demonstrates the company's commitment not only to innovation, but also to being a globally-focused business. WeWork's ability to provide members with an additional convenient means of payment is hugely exciting. I am very pleased that WeWork is taking steps to recognize the value this technology can provide our current and future members."

Pre-Paid Cards are The Main Gateway For Crypto Payments

Pre-paid cards topped up with crypto, such as Crypto.com and others, have become a popular gateway for spending crypto. According to a report from Visa, over $1 billion was spent using crypto-linked Visa cards in the first half of 2021. These cards allow users to quickly and easily convert their crypto into fiat currency, allowing them to make everyday purchases at merchants that do not accept crypto directly. This provides a convenient way for users to take advantage of the benefits of crypto while still being able to use it for daily expenses.

Key Factors to Evaluate in Crypto Payments

What sets crypto apart from other traditional currencies, like the dollar or euro, is their multi-dimensional properties. Crypto is not just a currency but also a technology, a store of value, and an alternative financial market infrastructure. It is no wonder why crypto assets have disrupted the status quo and why regulators are taking so long to come up with crypto regulations. They are unlike any other asset we know.

Crypto Payments Can Take Several Hours To Get Confirmed.

One of the drawbacks of crypto payments is the amount of time required for a transaction to be confirmed. Depending on the blockchain and network congestion, It could take a few seconds to several hours for a transaction to get approved, which can cause a terrible experience for merchants and users when transacting in person. While some companies are working to address these issues, including by using "layer-two" solutions and closed-loop transactions, there is still progress to make cryptocurrency transactions faster and more efficient.

Blockchain Network Congestion Can Increase Crypto Processing Costs

Another concern with crypto payments is the potential for high transaction fees. The blockchain network determines these fees and can fluctuate based on factors such as the transaction's size and the network's congestion. According to data from the crypto research and data firm Messari, the average Bitcoin transaction fee on April 2021, during a period of high demand and congestion, the average Bitcoin transaction fee was around $60. These high fees can make it impractical for smaller transactions and may discourage some users from adopting cryptocurrencies as a means of payment.

Crypto Payments Can Not Be Reversed

Unlike traditional payment systems, such as credit cards or bank transfers, which have the possibility of chargebacks or reversals, cryptocurrency payments are irreversible once they are confirmed on the blockchain. This characteristic is inherent to the decentralized and transparent nature of blockchain technology, and it brings both advantages and considerations.

On one hand, the inability to reverse crypto payments enhances security and eliminates the risk of fraudulent chargebacks, protecting merchants from potential losses. It also empowers individuals with full control over their funds, eliminating the need to rely on intermediaries or third parties.

However, this also means that users must exercise caution and ensure the accuracy of payment details before initiating a transaction. Once the funds are sent, there is no recourse for retrieval, making it essential to double-check wallet addresses and confirm the intended recipient.

Implementation Paths for Crypto Payments

Developing an in-house solution to receive and process crypto payments

Several technical factors must be considered when developing an in-house crypto payment solution, which makes this option the most expensive and time-consuming. Businesses must establish robust frameworks to handle their crypto holdings' storage, security, and liquidity.

Developing strong internal controls, employing multi-signature wallets, and implementing cold storage solutions are some measures that must be considered to safeguard crypto assets and ensure their availability for conversion when needed.

In addition, businesses could need to implement different treasury and hedging practices for managing volatility and liquidity.

Relying on crypto payment gateways

While payment gateways can reduce some of the technical complexities associated with managing blockchain connections and address specific cybersecurity vulnerabilities, businesses must recognize the importance of establishing robust internal controls to effectively manage the volatility of crypto prices and ensure the liquidity of these assets.

When utilizing a typical crypto payment gateway, funds are typically settled in crypto or stablecoins. This approach generally requires a lower initial capital investment compared to developing an in-house solution. However, businesses must still adapt their financial procedures to manage crypto assets.

Crypto payment processors

If you're looking for a timely and cost-efficient solution to begin accepting crypto payments, turning to Crypto Payment Processors is your best bet. These specialized processors excel in simplifying the engineering and financial complexities associated with handling crypto transactions. When a customer initiates a crypto deposit, the crypto processor seamlessly collects the payment and facilitates its conversion into fiat currencies, tailored to the merchant's preferences.

One of the significant advantages of utilizing crypto processors is the minimal effort required for integration through convenient APIs. It means merchants can smoothly integrate crypto payment capabilities into their existing systems without requiring extensive changes or adaptations to their internal financial controls.

To explore the full range of capabilities Beta Ramps Payment Product offers, we encourage you to contact our commercial team. They will provide you with comprehensive insights and assistance to ensure a seamless transition into the world of crypto payments.