Which Crypto Payments Provider to Select? Payments Service Provider
We'll help you make the crucial decisions that you'll have to take and explain the features available from different kinds of options. Plus, we'll demystify some terms throughout the process.
The two ways of cryptocurrency payments
If you want to accept cryptocurrency on your site, you generally have two options:
- Cryptolite: If you'd like to take cryptocurrency payments, but have little interest over that, this program is the perfect solution. Look for options to ensure that you have the right amount of cash to your bank account as fast and cheaply as you can.
- Additional information: This category can become complicated very quickly. If you wish to preserve some or all your cryptocurrency as crypto, accept a wider range of currencies or sell NFTs, you'll need sophisticated solutions.
Selecting between a custodial or non-custodial crypto payments service
When it comes to accepting cryptocurrency on your site the main option you'll be faced with is deciding whether you want to use either a custodial or non-custodial payment provider.
This is in conjunction with your selection of "crypto light" or "something greater."
Custodial crypto payments providers
For many merchants, this option gives peace of mind and an easy user experience. It will provide support and conditions of service, and you can benefit from additional functions (such the automatic settlement of your bank) as your service provider manages your accounts in crypto on your behalf.
If you want to pursue "crypto light," custodial crypto payments services are the best choice.
Benefits of cryptocurrency payment provider that is custodial include:
- A fully-integrated extension
- The ability to accept any cryptocurrency or cryptocurrencies that are offered by customers
- Settlements sent directly into your bank account fiat money.
- Account access with an email address and password
- Support services
- Lower transaction costs and protection from refunds and chargebacks
Crypto payment providers that are not custodial
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 cryptocurrency accounts. This is not something to be taken lightly. However, for qualified store owners you can unlock the maximum potential of cryptocurrency.
The advantages of a custodial cryptocurrency payment provider are:
- You can access and manage your crypto as soon as it's received - no waiting to be settled by an outside entity.
- Less restrictions in terms and conditions - no anyone can revoke or deactivate your account or service.
- All actions are subject to laws that are in effect and to your personal capabilities. You are able to sell anything you'd like to whoever you'd like. You can also manage your cryptocurrency however you see fit.
- Sole responsibility for your account's security . No third-party data breaches or hacks could affect your account funds.
Crypto vocab check
Fiat Currency: Currency issued by an official government (e.g. USD, EUR, GBP).
Cryptocurrency: A currency that is secure by cryptographic principles (e.g. BTC, ETH, DOGE).
Stablecoin: A type of cryptocurrency tied to a fiat currency. (e.g. USDC in which USDC = 1 USDC equals 1. USD).
The advantages of cryptocurrency payment providers
There are a lot of options that you should consider when choosing custodial and non-custodial services.
Below, you'll see an extensive list of options and considerations to illustrate the differences between the options. If you're using this list, you must understand that this is a high-level guide to what's likely to be offered. Not all partners will provide every option.
| Feature | Custodial | Non-custodial |
|
A contract with a third person
When you sign up to a service with a corporation governed by terms of service. |
Y | N |
|
Account recovery
If you lose access to your account, you may ask for a reset of your password or account recovery service from the provider. |
Y | N |
|
Support
You'll be able to access and receive support via the company. |
Y | N |
|
Automatic exchange to stablecoin/other crypto
It is possible to decide to have the crypto converted to a different crypto or stablecoin. |
Y | Y |
|
Automatic exchange to fiat
You may choose to have the crypto converted automatically to fiat. Please note that calculations for exchange rates and rates will vary by your partner. |
Y | N |
|
Automatic settlement to your bank
You may decide to have the funds paid to your bank automatically. |
Y | N |
|
You will receive the exact amount of fiat currency
This can help avoid being exposed to volatility in the price of crypto. Non-custodial solutions can mitigate - but not eliminate - volatility by choosing to only take stablecoins. |
Y | N |
|
Specific features for merchants
A few providers have features to make it easier for merchants to save time and effort. They include features like risk profiling (to assist in ensuring that you don't receive funds from criminals), under/overpayment protection, and invoicing via email. |
Y | N |
|
Transaction finalization protection
Blockchains depend on blocks to be produced in order to complete transactions. The more blocks produced after a particular transactions, the more secure the transaction. The protection helps prevent sending out goods and then having a transaction be reversed. |
Y | N |
|
Insurance for funds
Custodial as well as non-custodial options carry a risk of hacking. The insurance on funds is a protection for users who use a custodial service. But, the protection offered by insurance companies varies and merchants should carefully research their partners' insurance and reimbursement policies. |
Y | N |
| Y | Y | |
|
Supports subscriptions/recurring payments
Paying with cryptocurrency, customers have to sign off on every payment. This means that recurring payments will not be an option, though some custodial systems offer tools to automatically generate and send invoices based on a schedule. |
N | N |
|
Transaction fees that are low
Both custodial and non-custodial payment companies typically charge significantly less transaction costs (1-1.5%) than traditional payment providers (2-3.5 percent). |
Y | Y |
|
Exposition to crypto networks (e.g. gas) fees
Direct cryptocurrency transactions have specific network charges - when used with Ethereum being the most popular, they are referred to as gas fees. Certain payment processors pay these costs, while some transfer them on. |
N | Y |
|
Control solely
You are the only person who can make outgoing transactions using your account. Any other person or entity cannot authorize transactions unless they gain access to your private password. |
N | Y |
|
Accept any cryptocurrency, on any network
The processors for crypto payments support a different range of crypto networks and coins. Custodial services are restricted by the currencies they support. Alternative solutions that aren't custodial can provide a greater alternatives. |
N | Y |
|
integration
It's one thing to receive the payment, but it's a different thing to know which customer has made the payment, and to know for the amount of their order. Our partners provide solid integrations that cover everything from setup to day-to-day management. |
Y | Y |
Explore your options, and then select the best cryptocurrency payment provider for your store
It can be difficult to understand the various options available for cryptocurrency It's worth it to give payment options that best suit the needs of your customers and requirements. Spend the time to go through the pros and cons of two different payment providers that use crypto, and take note of which one best suits your particular business.