How Your Customers Can Pay You with Crypto

It's always important to understand the viewpoint of your customers in particular at critical point of conversion like the checkout. A critical part of an effective checkout experience is offering an efficient, safe method for customers to check out with the preferred payment method.

In this piece, we'll help you understand the process of making a payment from your customers' point of view. By understanding this you'll be able to recognize opportunities for increasing the conversion rate of your customers, provide assistance directly, and inform your clients and customers.

Crypto vocab check

There is a way to study each of these terms a little more in this article. But here's a summary of the key terms:

Public key: Essentially, the information someone needs for sending you cryptocurrency.

Public address The hashed (basically short) version of a public key. This is what you might offer to anyone who wishes to send you money. Imagine it as a Venmo username or PayPal.me link. (e.g., 0x12B0aD31f483Cdf4741de8f5679A472E5fe3345G)

Private key: Allows a user to access funds sent to an open key. The private key should never be disclosed to a third party.

Web3: Defined by AP Stylebook, Web3 is a catchall term for the prospect of a new stage of the internet driven by the cryptocurrency-related technology, blockchain.

Web3-based wallet (crypto wallet): It stores private and public keys used for transactions in blockchain.

Seed word: A list of 12-24 randomly-generated words that grant access to a Wweb3 wallet. It can be used to gain access back to a cryptocurrency wallet. It is not recommended to share this information with a third party.

Non-custodial wallet: Users own the private keys to their wallet and have all access to their Wweb3 wallet. (e.g., Metamask, Trust Wallet. )

Custodial wallet Keys to private accounts are owned by third-party firms. (e.g., Coinbase, OpenNode. )

Peer-to-peer payments

You might be thinking "Isn't one of the main advantages for cryptocurrencies that they're peer to peer and don't depend on third party services?"

Absolutely, it is possible to get money from your customer without the use of any third-party service or tool.

However, this simply isn't feasible for the typical user. They're not going to run an individual node, create transactions via a command line, and memorize the private keys to their account. Likewise, most sellers are content to accept a modest transaction cost to provide customers with a smooth experience, while saving themselves lots of time and energy in reconciling transactions to orders.

So, this article focuses on typical online transactions that use products and services that are likely to be used by beginner and intermediate-level users.

A brief overview of the process of making a crypto payment

From the perspective of a consumer, there are three steps:

1. You can access a fundable cryptocurrency wallet.
2. Connect their wallet.
3. Complete the payment and receive confirmation.

The specific experience depends on the payment processor and the wallets that are involved. Let's run through some examples and discuss what's going on in each stage to your client.

1. You can access a fundable crypto wallet

There are lots of options to those who are looking for an online wallet that supports crypto. Each option comes with specific features, advantages, and support for different currencies, chains, and payment experiences.

"Traditional" digital wallet providers like PayPal as well as CashApp now support cryptocurrency payments. The top crypto exchanges such as Coinbase, Crypto.com, and Binance offer their own apps that also function as wallets for payments. There are also crypto-native wallets such as MetaMask, Rainbow, and many other options. It is recommended to conduct your own research to determine the most suitable option for you.

Once you've chosen your wallet and getting it set up, the next thing to do is to add some cryptocurrency to it so that there is a cash balance that you can use to purchase. This can be a fast procedure since most wallets provide in-app purchase options.

What is the best way for a consumer to decide which currency to use?

That's an excellent topic! Most of the time, it doesn't matter, aside from charges that could add up in the event that they must exchange currency. A few crypto payment processors offer automatic exchange services to allow customers to make payments in one currency while you receive it in another.

If that's not feasible, most crypto wallets offer in-wallet exchange/swap functionality so that when a user has bitcoin (BTC) but wishes to pay using Ethereum (ETH) then they are able to switch quickly. It is ideal to load your wallet with whatever money you wish to pay in, but that's impossible in advance of deciding to make an purchase.

2. Link their wallets with your website

There are two ways that a customer can connect their wallets to your website: QR code or browser wallet connection. Payment processors that accept crypto may provide one or both of these as choices.

QR code

This is the best option for customers who have their crypto wallet as an application on their smartphone. When a person decides to make a payment with crypto, they're presented with the QR code which could be scanned using an application within their wallet application for crypto.

Connect your wallet to the browser

This method is ideal for users who have access to their crypto wallet via an online browser extension. When someone chooses this route it prompts them to join their Web3 wallet by clicking an icon, which opens the browser's wallet, and requests for permission to connect.

3. Complete the payment and receive a confirmation.

Whichever method the client chooses it will provide prompts that guide them in making a payment, via the app or the browser.

After payment has been made it can take some delay (usually only seconds) until payment confirmation through the blockchain. Once this is done, the customer and you are both notified of the confirmation. When transactions are conducted via blockchain, you might be both issued a blockchain transaction ID.

And that's it!

What exactly do these methods mean for merchants?

There's a big difference between a customer who's familiar with crypto and is prepared to make a purchase and someone who's never used cryptocurrency before. Getting set up with the right crypto wallet, financing it and understanding how to process the transaction are all obstacles in the way of entry.

At first, most digital payments will come from more experienced crypto users. As time passes, this amount will likely to increase dramatically. If your fans and clients have stated that they're interested in crypto, it may be worthwhile to point them towards reliable sites so they'll be able to understand how to make payments to you the way they prefer.

Benefits of crypto payment options for your clients

1. The holders of crypto want to spend the money! It could be that they're an early investor, they're an excellent trader, or they get the money in cryptocurrency.
2. It's less expensive for them to make direct payments to crypto rather than pay exchange and/or forex fees for traditional payments. This is especially true for international customers.
3. They may not have access to other payment methods.
4. It is possible that they would prefer to keep certain transactions private or separate from other activities in their financial accounts.
5. They feel it's more convenient and safe.
6. They value being able to transact without paying fees to traditional financial service providers (i.e., they're ideologically-driven).
7. There aren't any limits on the amount of daily payments - this particularly applies to expensive, luxurious products that may exceed the limit on a daily basis for a user's bank account.
8. It's a cost for an digitally-native asset like an NFT.

Customer considerations to bear in mind

As you can see, there are a lot of possibilities when it comes to payment via crypto based on customer experience. There are a few points to keep in mind while choosing and operating crypto payment options:

1. What is the easiest way for your clients to pay? What are the best payment methods? the most popular currencies?
2. Are your clients exposed to crypto network fees directly? It could be harder for them spend if the crypto network is very busy.
3. Are you clear about the process of dispute resolution? This is especially important when there's the absence of the traditional credit and refund policies. Unhappy or angry customers are more likely to make complaints and leave poor reviews.
4. What time will the customers have to wait for the confirmation of their order? Based on the method you're using to allow clients to pay for their purchases, they could have to wait longer than they normally do. This is why using a payments partner can assist, since they will frequently keep the fees and confirmation times very low.
5. Do shoppers need an education? Customers may appreciate education about the ways to pay using crypto, along with guidance regarding security and how to avoid fraudulent transactions.

Your customers can trust you to help them embrace the new world of payment

Merchants have the option of choosing crypto payment processing options that are simple and familiar. Customers, on the other hand, will have a different payment experience.

The world is full of millions of users who are already ready, willing, and capable of paying with the crypto. Although crypto-based payment methods are becoming easier and simpler, it's still important that merchants understand their customers' experiences and the implications of their decisions so that they can make the most of this new potential for growth.