Crypto has continued to gain mainstream adoption in the global economy. Each day, more firms are considering the benefits of digital assets and the implementation of payments for their businesses. Offering cryptocurrency payment options may help firms gain a competitive advantage.
Should You Integrate Cryptocurrency Payments?
If you’re interested in integrating cryptocurrency payments, the guide below will help you make the right decision:
Evaluating the Benefits
Before diving into the complexities of setting up crypto payments, there are a few things one must consider:
- Low Transaction Fees: Cryptocurrency transactions usually cost significantly less than traditional payment rails.
- Quicker Settlement: Transactions in cryptocurrencies can be settled almost instantaneously, which is more convenient for both recipient and sender.
- Entering New Territories: Cryptocurrency may give one an edge worldwide as an option for payment in a global economy, mainly as certain regions have limited banking services.
- Security and Privacy: Blockchains usually allow transactions to have visibility and security on the blockchain, reducing fraud risks.
Identifying the Best Crypto For Your Company
There are over 10,000 cryptocurrencies, but choosing the right one is vital for your firm. Choosing widely known and highly recommended cryptocurrencies is essential for most firms. Here are a few cryptocurrencies one can consider:
- Bitcoin(BTC): The largest cryptocurrency in market cap and has high trading volume, making it easily transferable.
- Ethereum(ETH): A smart contract layer with mainstream adoption and is the second biggest by market cap.
- Stablecoins (USDC, USDP, PYUSD, etc.): Digital assets with monthly attestations pegged 1:1 to the US dollar.
Network fees may vary depending on network volume; additionally, it’s essential to understand your customer’s preferences and region, as some cryptos are limited to specific regions.
Choosing a Crypto Payment Processor
This is a big step when choosing a payment processor to facilitate crypto payments. A payment processor will convert crypto (if needed) and simplify the process of each transaction for your firm. Here are a few of the most popular payment processors to consider:
- Bitpay: Offers a wide variety of options for online and in-person transactions.
- Coinbase Commerce: Best for firms that already use Coinbase for storage or trading.
- Self Custody: Allows businesses to take full control of their crypto by managing their keys directly, ensuring maximum security and independence while reducing reliance on third parties
Payment processors vary with supported cryptos, security parameters, integration, and fees.
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Implementing Crypto Payments into Existing Systems
Integrating crypto payments into your firm’s infrastructure is crucial for maintaining efficiency. The implementation process will vary based on the firm’s business model.
- E-Commerce Firms: Most payment processors have plugins and APIs that may be utilized for platforms like Shopify.
- Service Firms: Invoicing solutions are highly recommended for service-based firms. Bitpay and Coinbase Commerce enable users to generate invoices that can be paid in crypto.
- Integration with ERP Software: Many firms benefit from integrating digital assets payment solutions directly into their ERP systems to streamline accounting, reporting, and reconciliation processes for crypto transactions.
- Firms with Recurring Bills: Firms with this business model can find payment processors that offer support for recurring payments in crypto.
Maintain Compliance and Reporting
Dealing with crypto payments requires regulatory responsibilities that change based on jurisdiction. This means following local and sometimes international regulations:
- Tax Reporting: Based on the country, digital assets are treated as property in tax reporting. Ensuring your firm tracks all crypto gains and losses.
- Anti Money Laundering (AML): Digital assets may be subject to AML regulations. Working closely with a legal advisor is essential for reporting procedures.
- Regulatory Filings: Being closely affiliated with digital asset specialists can help keep you ahead of the curve when navigating the obligations of your jurisdiction.
Key Takeaways
Implementing digital assets into your firm’s operation may assist in ways you could never imagine: reducing transaction costs, accessing new markets, and facilitating faster transactions. By evaluating your options, selecting the correct tools and software, and staying in compliance, your firm can transition into accepting digital assets in addition to traditional payment options to expand your options and vendors. The digital landscape is constantly changing, so embracing crypto could position your firm as a forward-thinking leader in the industry.
Author: Mohammed Bari | [email protected]
Contact Us
For more information on this topic, please contact a member of Withum’s Digital Currency and Blockchain Technology Services Team.
