Which Crypto Payments Provider to Select? Payments Service Provider
Let us walk you through the key decisions you'll need to take, and provide an overview of the options available in different types of solutions. We'll also help you understand a little jargon as we go along.
The two ways of cryptocurrency payments
If you want to accept cryptocurrency on your website There are generally two options:
- Cryptolite: If you'd like to take cryptocurrency payments however, you're not interested above that, this option is the right solution for you. You'll look for solutions that simply ensure you get the right amount of cash into your account as swiftly and easily as you can.
- Additional information: This category can get complicated quickly. If you want to keep the majority or even all your cryptocurrency as crypto, accept a wider selection of currencies, or even sell NFTs, then you'll require higher-end solutions.
Selecting between a custodial or non-custodial crypto payment provider
In the event of accepting cryptocurrency on your site The most crucial choice you'll need to take is whether to choose a custodial or non-custodial payments service.
This goes hand-in-hand with your choice of "crypto lite" or "something different."
Payments providers that use custodial crypto
Many merchants find this solution offers peace of mind and a familiar user experience. You'll have access to support as well as the terms of service and you can benefit from additional features (such the automatic settlement of your bank) since the service provider handles your crypto accounts on behalf of you.
If you pursue "crypto lightweight," custodial crypto payments services are the best choice.
The advantages of Custodial Crypto Payments provider include:
- An extension that is fully integrated
- Ability to accept one or more cryptocurrencies from customers
- Directly to your bank account fiat money.
- Access to your account via email address and password
- Support Services
- Low transaction fees and security from chargebacks and refunds
Providers of non-custodial crypto payment services
If you're an expert in crypto and want access to advanced capabilities, it's possible to consider a non-custodial solution. When you use non-custodial options they will give you complete control , and the sole obligation to the security and administration of your accounts in cryptocurrency. It's not something you should be taken lightly. However, when you're a store owner with a valid license this unlocks the complete potential of cryptocurrency.
Benefits of using a non-custodial crypto payments provider:
- Access and control of your crypto as soon as it's accepted - no waiting for settlement from the third party.
- There are fewer restrictions on Terms and Conditions - No person can cancel or suspend your account or services.
- Actions that are subject only to laws that are in effect and to the capabilities of your individual. You are able to sell anything you'd like to whoever you'd like. You can also manage your currency in the way you think best.
- Sole responsibility for your account's security - no hacking or data breach by a third party may affect your bank account.
Crypto vocab check
Fiat money: Currency issued by an official state (e.g. USD, EUR, GBP).
Currency: The currency is secured with cryptographic principles (e.g. BTC, ETH, DOGE).
Stablecoin A type of cryptocurrency that is tied to fiat currencies. (e.g. USDC in which 1 USDC equals one USD).
Crypto payment provider features
There are many features to consider when choosing between a custodial and non-custodial provider.
Below, you'll see an extensive list of options and considerations to illustrate how different options are. When using the list, you must be aware that this table is a high-level guide to what's likely to be offered. Not all partners will have every feature.
| Feature | Custodial | Non-custodial |
|
Contract with a 3rd person
Sign up for the service of a business which is subject to conditions of the service. |
Y | N |
|
Recovery of accounts
If you are unable to access your account, you may ask for a reset of your password or access recovery through the service provider. |
Y | N |
|
Support
It will be possible to connect and receive support from the provider. |
Y | N |
|
Automatic exchange to stablecoin/other crypto
You can decide to have the crypto transformed into a different cryptocurrency or stablecoin. |
Y | Y |
|
Automatic exchange of fiat currency
You may choose to have cryptocurrency converted into fiat automatically. Be aware that the calculation of exchange rates and rates will vary by the partner. |
Y | N |
|
Automatic settlement of your account to your bank
You can decide to have the funds paid to your bank automatically. |
Y | N |
|
Get the exact amount in fiat currency
This can help avoid being exposed to crypto price fluctuations. Solutions that are not custodial can reduce - but not eliminate - the volatility of cryptos by deciding to accept 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 criminals), under/overpayment protection, and email invoicing. |
Y | N |
|
Transaction finalization protection
Blockchains require 'blocks' being created to finalize transactions. The greater the number of blocks created following a specific transactions, the more secure the transaction. Security helps to avoid the risk of sending goods and then having a transaction be reversed. |
Y | N |
|
Funds insurance
Both custodial and non-custodial solutions carry a risk of hacking. Insurance on funds can safeguard users who use a custodial service. 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
Users who pay with cryptocurrency have to sign off on every transaction. This means that recurring payments will not be feasible, however some custodial solutions offer tools to automatically generate and send invoices according to a set schedule. |
N | N |
|
Transaction fees that are low
Both custodial and non-custodial payment service providers usually offer considerably lower transaction fees (1-1.5%) that traditional providers (2-3.5%). |
Y | Y |
|
Exposure to crypto network (e.g. gas) fees
Direct cryptocurrency transactions come with their own network fees - with Ethereum, these are known as 'gas' charges. Payment processors may absorb these costs, while some transfer these fees on to the user. |
N | Y |
|
Control solely
The only one with the ability to make transactions outgoing through your account. No other entity/person can authorize transactions, unless they have access to your private password. |
N | Y |
|
Accept all cryptocurrency on any network
The processors for crypto payments support a different range of crypto networks and coins. When you use custodial options, you're restricted by the currencies they support. Alternative solutions that aren't custodial can provide a greater alternatives. |
N | Y |
|
integration
While it's one thing to get the payment, but it's a different thing to determine which person has made the payment, and to know for which purchase. Our partners have solid integrations that cover everything from setting up to managing daily. |
Y | Y |
Explore your options, and then select the right cryptocurrency payments provider for your shop.
The options for cryptocurrency can be confusing, but it's worthwhile to offer the best payment option that meets you and your clients' needs. Spend the time to go through the advantages and disadvantages of two different crypto payments providers, decide which is the right fit for your business.