Crypto Merchant Account
What is crypto currency?
A cryptocurrency is an encrypted data string that denotes a unit of currency. It is monitored and organized by a peer-to-peer network called a blockchain, which also serves as a secure ledger of transactions, like buying, selling, and transferring.
Unlike physical money, cryptocurrencies are decentralized, which means they are not issued by governments or other financial institutions.
Cryptocurrencies are created (and secured) through cryptographic algorithms that are maintained and confirmed in a process called mining, where a network of computers or specialized hardware such as application-specific integrated circuits (ASICs) process and validate the transactions.
The process incentivizes the miners who run the network with the cryptocurrency.
What is a crypto merchant account?
A Cryptocurrency Merchant Account is a type of bank account that enables businesses to send and receive cryptocurrency and alt-coins smoothly. High risk merchants who deal with alternative currencies are the target audience for cryptocurrency merchant accounts, which are specifically designed for them.
Merchants can do international business in a range of currencies with the use of customised accounts. Compared to merchant accounts provided by conventional financial institutions and card issuers, crypto merchant accounts have significantly less red tape once the account is established.
Although traditional banks view cryptocurrency as high-risk, firms who deal with it naturally encounter difficulties when attempting to open regular merchant accounts
Crypto currency merchant account: Businesses supported
Cryptocurrency Merchant Accounts support various businesses which are as follows:
Crypto hardware businesses
NFT marketplaces and auction platforms
Crypto trading sites and applications
Crypto crowdfunding services
These are the name of few, however there are many other businesses supported by crypto currency merchant account.
Cryptocurrency payment gateway: working
Payment gateways are businesses that use their wallets to enable transactions between merchants and their consumers while taking on the perceived risk of cryptocurrency payments.
In terms of steps, the following steps that gets executed while we make a payment:
Step 1. The customer opts to make payment in cryptocurrency at checkout- in-store, on the web, or in-app.
Step 2. The customer pays you an amount equal to the digital currency’s fair market value at the time of the transaction.
Step 3. The cryptocurrency payment service instantly converts the payment into the currency of the customers choice.
Step 4. The money is added to your account with the provider; it is deposited to your designated bank account in intervals decided on in your service contract.
You don’t need to worry about cryptocurrencies because the procedure is transparent to you; all you need to know is that the right funds will be deposited into your account by your bitcoin service provider.
Cryptocurrency merchant account: Advantages and Disadvantages
Cryptocurrencies are by definition decentralised and anonymous. The system makes it simple for two parties to conduct a transaction.
However, some businesses could feel uneasy receiving payments in digital currency since they don’t know how it all works or they have doubts about the system.
Hence, we must know the advantages and disadvantages of crypto merchant account:
• This payment gateway preserves your customers’ choices while removing the confidentiality of your dealings.
• You can accept payments in any cryptocurrency that your supplier accepts from customers anywhere in the world.
• You receive the funds in the account with your provider, who transfers them to you.
• Reduces volatility risk.
• You have someone to contact if there are payment issues.
• Any money you have in your provider account while waiting for a transfer will be lost if the payment gateway is compromised.
• A payment gateway is a third party, which cryptocurrencies were originally designed to bypass.
• You may be receiving payments from all over the world and in various time zones, therefore you must rely on the provider’s capacity to sustain uninterrupted services.
• When using your cryptocurrency wallet, transaction fees are minimal; however, when using a cryptocurrency payment gateway, fees are higher.