As payments in cryptocurrency are slowly replacing payments in fiat money, traditional payment providers are also beginning to give way to crypto payment processing.
Crypto payment processing means processing transactions made in cryptocurrencies.
Crypto processor is a service that allows merchants to accept payments in crypto currencies. It acts as an intermediary and carries out 6 main functions:
To make a crypto payment only the recipient's blockchain wallet address is required. The payer must copy this address into the appropriate field in their own wallet, enter the amount, and confirm the transaction. While using a QR code, the process is even easier.
Generally, there are two models of crypto processing:
In both cases, crypto processing assumes the conversion, exchange rate risks and payment to the seller's wallet, while the store gets the opportunity to attract a new potential audience.
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One of the main features of cryptocurrencies is volatility. It is almost impossible to sell and buy, for instance, Bitcoin or Ethereum at the same price. That is why, by accepting crypto payments, merchants run the risk to receive less than they intended.
The speed of cryptocurrency systems lags behind their fiat counterparts. The Bitcoin network processes 4-5 transactions per second. The throughput of the Ethereum network is up to 30 transactions per second. The Ripple system allows processing up to 1,500 transactions per second and EOS — up to 4,000. At the same time, Visa can process up to 24,000 transactions per second.
Cryptocurrency is not a legal tender in most jurisdictions, so accepting such payments sometimes comes with legal difficulties for the merchants. Problems also arise when paying taxes on income or profits that have been received in cryptocurrency.
The popularity of processing as a business is growing along with the demand for fast electronic payments worldwide. And the strong demand for cryptocurrency payments is driving the growth of crypto payment gateways quantity, although this niche is still open to new players.
Here are the main reasons:
For contractors and merchants, creating their own crypto processing is a colossal waste of effort and money. A more profitable and quicker way is to integrate a ready-made solution from a supplier who will take over the burden of service development, adding new cryptocurrencies, and supporting users.
Corefy enables you to accept payments and make payouts in 400+ methods, including cryptocurrencies, via 650+ providers. Get in touch with our team to know more.
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