How to Choose a Crypto Payments Service Provider
Let us guide you through some of the most important decisions to take, and provide an overview of the capabilities available to you from various varieties of solutions. We'll also help you understand some of the jargon we'll use along the way.
The two ways of cryptocurrency payments
If you want to accept cryptocurrency for your website, you generally have two choices:
- Crypto lite: If you'd like to accept cryptocurrency for payments however, you're not interested over that, this program is the right solution for you. Look for options which will ensure that you receive the right amount of cash to your bank account as swiftly and easily as possible.
- More: This category can get complicated quickly. If you wish to preserve any or the entirety of your crypto crypto, accept a wider range of currencies, or even sell NFTs, then you'll require higher-end options.
Choosing between a custodial and non-custodial crypto payments service
If you're considering accepting cryptocurrency payments on your site The most crucial decision you'll have to make is deciding whether you want to use a custodial or non-custodial payments service.
It's a good idea to make a selection of "crypto light" or "something different."
Custodial crypto payments providers
For many merchants, this solution provides peace of mind as well as an experience that is familiar to users. You'll have access to support as well as terms of service, and you can benefit from other options (such such as automated settlements to your bank) as your service provider will manage your crypto accounts on your behalf.
If you pursue "crypto lite," custodial crypto payments service providers are your only option.
The benefits of a custodial crypto payments providers comprise:
- Fully integrated extension
- Accepting one or more cryptocurrencies from customers
- Directly to 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 an expert in crypto and would like access to more advanced capabilities, you may want to consider a non-custodial solution. With non-custodial solutions they will give you complete authority and control over the security and management of your crypto accounts. This isn't something to do lightly. But for qualified store owners this unlocks the complete potential of crypto.
The advantages of a custodial crypto payments provider:
- You can access and manage your crypto as soon as it's received - no waiting for settlement from a third entity.
- Fewer restrictions from the terms and conditions. No anyone can revoke or deactivate your account or service.
- Actions that are subject only to laws that are in effect and to the capabilities of your individual. It is possible to sell what you'd you'd like, and control your cryptocurrency however you see fit.
- The sole responsibility lies with your account's security - no hackers or data breaches from third parties can affect your funds.
Crypto vocab check
Fiat Currency: Currency issued by a state (e.g. USD, EUR, GBP).
The term "cryptocurrency" refers to The currency is secured with the principles of cryptography (e.g. BTC, ETH, DOGE).
Stablecoin A type of cryptocurrency that's pegged to a fiat currency. (e.g. USDC (where USDC = 1 USDC is 1 USD).
Crypto payment provider features
There are a lot of options that you should consider when choosing a custodial and non-custodial provider.
Below is the complete list of features and aspects to show the difference between options. When using the table, be sure to be aware that this table is an overview of what's likely to be offered. Some partners may not have every feature.
| Features | Custodial | Non-custodial |
|
Contract with a third party
Sign up for the service of a business which is subject to the terms of the service. |
Y | N |
|
Recovery of accounts
If you are unable to access your account, you can get a password reset request or access recovery through the service provider. |
Y | N |
|
Support
The user will have access to and receive support 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 can differ depending on your partner. |
Y | N |
|
Automatic settlement to your bank
You may decide to have the funds paid to your bank automatically. |
Y | N |
|
Get the exact amount of fiat currency
This helps avoid exposure to volatility in the price of crypto. The non-custodial solution can help reduce - but not eliminate - the volatility of cryptos by deciding to allow stablecoins. |
Y | N |
|
Specific features for merchants
Some providers offer features to save merchants time and energy. This includes things such as risk profiling (to ensure your business doesn't get funds from bad actors) and protection against overpayment or underpayment, as well as email invoices. |
Y | N |
|
Transaction finalization protection
Blockchains require 'blocks' being created to complete transactions. The more blocks that are generated following a certain transaction, the safer the transaction. Protection helps avoid sending out goods and then having a transaction reverse. |
Y | N |
|
Insurance for funds
Custodial as well as non-custodial options are susceptible to hacking. The insurance on funds is a protection for users who use a custodial service. However, protection varies widely and it is important for merchants to research their partners' insurance and reimbursement guidelines. |
Y | N |
| Y | Y | |
|
Supports subscriptions/recurring payments
Users who pay with cryptocurrency have to sign off on every transaction. So recurring payments are not an option, though certain custodial services offer the ability that automatically create and mail invoices based on a schedule. |
N | N |
|
Low transaction fees
Both custodial and non-custodial payment companies typically charge significantly less transaction costs (1-1.5 percent) that traditional providers (2-3.5 percentage). |
Y | Y |
|
Exposition to crypto networks (e.g. gas) fees
Direct cryptocurrency transactions have their own network fees - when used with Ethereum this being known as gas fees. Payment processors may absorb the fees, while others pass them on. |
N | Y |
|
Sole control
Only you are the one who can make outgoing transactions from your account. Nobody else can approve transactions, unless they have access to the private account key. |
N | Y |
|
Accept all cryptocurrency on any network
Crypto payments processors offer a variety of cryptocurrency networks and currencies. Custodial services are constrained to the currency they accept. Non-custodial solutions can offer a wider range of options. |
N | Y |
|
integration
It's one thing receiving an amount of money, but it's quite another to identify which client has made the payment, and to know for which purchase. Our partners provide solid integrations that cover everything from setting up to managing daily. |
Y | Y |
Examine your options and select the best cryptocurrency payment provider for your store
Cryptocurrency solutions can seem confusing however it's well worth the effort to provide solutions that are best suited to yours and your customers' needs. Spend the time to go through the pros and cons of the two types of crypto payments providers, take note of which one best suits your company.