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How to Choose a Crypto Payments Service Provider

Nov 25, 2022

We'll walk you through some of the key decisions you'll need to take and explain the capabilities available through different varieties of solutions. We'll also help you understand some of the terms we'll use as we go through the process.

Understanding the two ways to use crypto-payments

If you are looking to allow bitcoin on your website there are generally two choices:

  1. The Cryptolite If you'd like to take cryptocurrency payments and don't have any other interest then this is the right solution for you. You need to look for options that will allow you to get an appropriate amount of money into your account as quickly and easily as is possible.
  2. Additional Information: This category can become complicated very quickly. If you'd like to hold most or all of your crypto as cryptocurrency, or accept a larger variety of currencies, or even sell NFTs, you'll need more expensive techniques.

Selecting between a custodial and non-custodial crypto-payments service

If you are considering accepting cryptocurrency for your website The primary decision you'll need to take is deciding whether you want to use one of the custodial, or non-custodial service.

This can be done to be used in conjunction with the selection of "crypto lighter" or "something else."

Service providers of custodial crypto payments

A lot of merchants choose this service can provide security and simple user experience. You'll have access to support and can trust the terms of service and can take advantage of many options (such the automatic settlement option to your bank) because your service provider handles the accounts you have in crypto for you.

If you're looking for "crypto lightweight," custodial crypto payments providers are the best choice.

The benefits of having a Custodial Crypto Payments provider are:

  • A complete extension integrated
  • Accepting any cryptocurrency that are offered by customers
  • Directly to your bank account in fiat currency
  • Access to accounts via email account and password
  • Support Services
  • Transaction fees are low and you can be sure of guarantee against chargebacks and cancellations

Crypto payment providers that aren't custodial

If you're an experienced at cryptocurrency and would like access to sophisticated capabilities, you may prefer an alternative to a custodial system. If you select an alternative that is not custodial, you'll have full control  and sole duty to ensure secure and manage your accounts in cryptocurrency. It's not something that should be considered lightly. If you're a retailer with a valid license, you can enjoy the full potential of cryptocurrency.

Advantages of having a custodial Crypto payment service:

  • Control and access to your crypto immediately after you receive it - there's no need to wait for settlement through a third party.
  • Less restrictions in the conditions and terms. No anyone can revoke or deactivate the account of yours or your services.
  • All actions are dependent on the laws in force and the capability of the personal. You can sell what you'd you'd like as well as manage your crypto currency according to your own preferences.
  • The sole responsibility lies with the security of your account - no third-party data breaches or hacks might affect your account's funds.

Crypto vocab check

Fiat Currency: Currency that is issued by a state (e.g. USD, EUR, GBP).

Cryptocurrency: Currency secured by the cryptography principles (e.g. BTC, ETH, DOGE).

Stablecoin The type of cryptocurrency tied to a fiat currency. (e.g. USDC (where USDC = 1 USDC equals one USD).

Benefits of using cryptocurrency for payment services

There are many features to consider when choosing between non-custodial or custodial service providers.

Here, you'll be able to see all the options and a listing of considerations that illustrate the various options available. If you're using this list it is important to know that it's a high-level guide to what's feasible. Some partners may not provide every option.

Highlights HTML1 Custodial Non-custodial
Contract with a third person You sign up for an offer through a firm that is governed by its terms of service. Y N
Recovery of accounts
If you've lost access to your account, you could receive a password reset request or recover access through contacting the business. 		Y N
Support
The user can have access to assistance and can seek it through the support service. 		Y N
Automatic exchange of stablecoin or other crypto
There is the option to convert your cryptocurrency into a stablecoin or another cryptocurrency. 		Y Y
Automatic exchange of fiat currency
You can choose to have the cryptocurrency converted automatically to fiat. Note that exchange rate calculations and rates may differ based upon the exchange your partner. 		Y N
Automatic Settlement for your Bank
It is possible to choose to settle the money in a timely manner to your bank. 		Y N
Receive the exact value of fiat currency
This can help keep you from being exposed to fluctuations with regards to crypto's price. Solutions that are not custodial can reduce - but not completely eliminate volatility, by selecting to allow only stablecoins. 		Y N
Specific attributes for sellers
Some providers provide features to make it easier for retailers to cut down on time and energy. This includes things such as risk profiling (to help make sure you do not receive money from criminals) and security against payments that are not made or overpaid, as well as invoices via emails. 		Y N
Transaction finalization protection
Blockchains are based on blocks that are made to finish transactions. The more blocks that are generated after a specific transaction, the more secure the transaction. Security helps to avoid the risk of sending out products and then seeing a transaction be reversed. 		Y N
Funds insurance
Any custodial solution, whether non-custodial or custodial have a chance of being hackable. Insuring funds can be an additional security measure for users of a custodial solution. The protection is not the same for every business and business owners should be aware of partners' insurance as well as refund policies. 		Y N
Y Y
Supports subscriptions/recurring payments
If they pay with cryptocurrency, the customer must authorize each payment. That means that recurring payment will not be an option however some custodial services offer tools to generate and automatically send invoices based upon a set schedule. 		N N
Fees for transactions that are very low
Both custodial and non-custodial payment companies typically charge significantly less transaction fees (1-1.5 percent) than traditional payment suppliers (2-3.5 per cent). 		Y Y
Exposition of cryptocurrency networks (e.g. gas) fees
Direct cryptocurrency transactions come with particular network fees - in the case of Ethereum they are referred to as gas costs. Payment processors may absorb these costs, while some transfer the costs on. 		N Y
Control solely
Only you that can perform transactions outgoing through your account. Nobody else can approve transactions without access to your private keys. 		N Y
Accept any cryptocurrency across any network
The processors for crypto payments offer a wide range of crypto coins as well as crypto-based networks. Custodial services are constrained to the currency they accept. Alternative solutions may provide more options. 		N Y
integration
It's one thing receiving the amount, but it's quite another to identify which client paid for the money and what order. Our partners have robust integrations to cover the entire process from setup to day-to-day management. 		Y Y

Examine your options and select the best cryptocurrency option for your store.

Cryptocurrency solutions can seem confusing However, it's worth the effort to offer the best choice that is suited to your as well as your clients' needs. Take the time to navigate over the benefits and drawbacks of the two types of cryptocurrency payment options, and then decide which best suits your particular business.

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