What is the best way to choose a crypto Payments Provider
Let us guide you through some of the crucial decisions that you'll have to take and explain the capabilities available to you from various kinds of options. We'll also help you understand some terms as we go along.
Understanding the two approaches of payment in crypto
If you are looking to allow cryptocurrency for your website there are two choices:
- Cryptolite: If you'd like to use cryptocurrency to pay for your purchases however, you're not interested over that, this program is for you. It's important to find solutions that simply ensure you get the right amount of cash into your account as quickly and affordably as is possible.
- More: This category can get complicated quickly. If you wish to preserve any or the entirety of your crypto cryptocurrency, or accept a larger selection of currencies, or sell NFTs, you'll require sophisticated options.
Choosing between a custodial and non-custodial crypto-payments service
When it comes to accepting cryptocurrency on your site, the most important choice you'll need to take is whether you'll choose either a custodial or non-custodial payment provider.
This goes hand-in-hand with your choice of "crypto lite" or "something greater."
Providers of custodial crypto payment
A lot of merchants choose this option provides peace of mind as well as a familiar user experience. You'll have access to support and the terms of service and take advantage of additional options (such such as automated settlements to your bank) because your service provider will manage your crypto accounts for you.
If you pursue "crypto light," custodial crypto payments providers are the only choice.
The advantages of custodial crypto payments providers are:
- A fully-integrated extension
- Ability to accept any cryptocurrency or cryptocurrencies that are offered by customers
- Settlements sent directly to your bank account fiat currencies.
- Access to your account via email and password
- Support Services
- Lower transaction costs and guarantee against chargebacks and refunds
Providers of non-custodial crypto payment services
If you're well-versed in cryptocurrency and would like access to more advanced features, you might want to consider a non-custodial solution. With non-custodial solutions you'll be in complete authority and control over your security and the management of your cryptocurrency accounts. This is not something to take lightly, but for qualified store owners you can unlock the maximum possibilities of cryptocurrency.
The benefits of a non-custodial crypto payments provider:
- You can access and manage your cryptocurrency as soon as you receive it - there's no need to wait for settlement from a third person.
- Fewer restrictions from the terms and conditions. No anyone can revoke or deactivate your account or service.
- Actions that are subject only to the laws in force and the capabilities of your individual. You can sell whatever you'd you'd like, and control your crypto currency however you feel appropriate.
- The sole responsibility lies with your account's security - no hacking or data breach by a third party may affect your bank account.
Crypto vocab check
Fiat Currency: Currency issued by an official government (e.g. USD, EUR, GBP).
The term "cryptocurrency" refers to Currency secured by digital cryptography (e.g. BTC, ETH, DOGE).
Stablecoin: A type of cryptocurrency that's pegged to a fiat currency. (e.g. USDC (where 1 USDC = one USD).
Features of crypto payments providers
There are many features to take into consideration when picking between custodial and non-custodial services.
Below, you'll find the complete list of features and aspects to show 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. Some partners may not provide every option.
| The Feature | Custodial | Non-custodial |
|
A contract with a third person
Sign up for the service of a business governed by conditions of service. |
Y | N |
|
Recovery of accounts
If you lose access to your account, you can request a password reset or account recovery service through the service provider. |
Y | N |
|
Support
The user will have access to and receive support from the provider. |
Y | N |
|
Automatic exchange to stablecoin/other crypto
You may choose to have crypto automatically changed to another crypto or stablecoin. |
Y | Y |
|
Automatic exchange to fiat
You may choose to have cryptocurrency converted into fiat automatically. Note that exchange rate calculations and rates may differ by the 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 crypto price fluctuations. Solutions that are not custodial can reduce - but not eliminate - volatility by choosing to only accept stablecoins. |
Y | N |
|
Features specific to merchants
Some providers offer features to save merchants time and energy. These include things like risk profiling (to help make sure you do not receive money from criminals) and protection against overpayment or underpayment, and email invoicing. |
Y | N |
|
Transaction finalization protection
Blockchains rely on 'blocks' to be produced in order to conclude transactions. The more blocks that are generated following a certain transaction, the safer that transaction is. The protection helps prevent sending out products and then seeing a transaction reverse. |
Y | N |
|
Insurance for funds
All custodial or non-custodial solutions carry a risk of hacking. The insurance on funds is a protection for those using a custodial solution. The protection isn't the same for every client and businesses should be aware of partners' insurance and refund policy. |
Y | N |
| Y | Y | |
|
Supports subscriptions/recurring payments
Customers paying with cryptocurrency must authorize each payment. Therefore, recurring payments aren't feasible, however some custodial systems offer tools to generate and automatically send invoices according to a set schedule. |
N | N |
|
Low transaction costs
Custodial as well as non-custodial service providers usually offer considerably lower transaction fees (1-1.5 percent) that traditional providers (2-3.5%). |
Y | Y |
|
Exposition to crypto networks (e.g. gas) fees
Direct cryptocurrency transactions come with their own network fees - with Ethereum this being known as 'gas' fees. Some payment processors absorb these costs, while some transfer them on. |
N | Y |
|
Control solely
Only you are the one with the ability to make transactions outgoing through your account. Nobody else can approve transactions without access to the private key. |
N | Y |
|
Accept any cryptocurrency across any network
The processors for crypto payments offer a variety of coins and crypto-based networks. When you use custodial options, you're restricted by the currencies they can support. Other solutions are able to offer more choices. |
N | Y |
|
integration
It's one thing receiving the payment, but it's a different thing to determine which person has made the payment, and to know for the amount of their order. Our partners offer robust integrations covering everything from setup to day-to-day management. |
Y | Y |
Examine your options and select the best cryptocurrency payment provider for your store
Cryptocurrency solutions can seem confusing, but it's worth the effort to provide solutions that are best suited to the needs of your customers and requirements. Take the time to navigate through the pros and cons of two different cryptocurrency payment services, decide which best suits your particular business.