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What is the best way to choose a crypto Payments Provider

Nov 24, 2022

This article will guide you through some of the key decisions you'll need to take and explain the features available from different varieties of solutions. In addition, we'll help to decode some terms as we go along.

Understanding the two approaches of payment in crypto

If you wish to take cryptocurrency on your site there are two choices:

  1. Cryptolite: If you'd like to accept cryptocurrency for payments, but have little interest over that, this program is for you. You'll look for solutions which will ensure that you receive the correct amount of money into your account as swiftly and easily as possible.
  1. Additional information: This category can be complicated in a short time. If you wish to preserve some or all of your crypto as cryptocurrency, or accept a larger variety of currencies or sell NFTs, you'll require more advanced methods.

Choosing between a custodial and non-custodial crypto payment company

If you're considering accepting cryptocurrency payments on your site the main option you'll be faced with is whether to choose the custodial or not-custodial service.

This goes hand-in-hand with your selection of "crypto lightweight" or "something more."

Providers of custodial crypto payment

A lot of merchants choose this option gives peace of mind and an easy user experience. You'll have access to support and the terms of service and you can benefit from other features (such as automatic settlement to your bank) because the service provider handles your crypto accounts on behalf of you.

If you want to pursue "crypto light," custodial crypto payments services are the best choice.

The advantages of cryptocurrency payment provider that is custodial comprise:

  • An extension that is fully integrated
  • The ability to accept the use of one or more cryptocurrency from customers
  • Settlements sent directly into your bank account fiat currency
  • Account access via an email and password
  • Support services
  • Lower transaction costs and guarantee against chargebacks and refunds

Non-custodial crypto payments providers

If you're an expert in crypto and want access to advanced capabilities, it's possible to think about a non-custodial option. When you use non-custodial options you'll be in complete control , and the sole obligation to the security and management of your crypto accounts. This is not something to do lightly. But to store owners who are qualified you can unlock the maximum potential of cryptocurrency.

The benefits of a non-custodial crypto payments provider:

  • You can access and manage your crypto as soon as it's accepted - no waiting for settlement by the third entity.
  • There are fewer restrictions on Terms and Conditions - No one can suspend or cancel your account or service.
  • Actions that are subject only to the laws in force and the capabilities of your individual. You can sell whatever you'd like to whoever you'd like, and control your currency in the way you think best.
  • The sole responsibility lies with your account's security - no hacking or data breach by a third party could affect your account funds.

Crypto vocab check

Fiat Currency: Currency issued by a government (e.g. USD, EUR, GBP).

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

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

Crypto payment provider features

There are a lot of options that you should consider when choosing custodial and non-custodial services.

Below, you'll see the complete list of features and considerations to illustrate how different options are. In using the list, you must understand that this is an outline of the features that are likely to be offered. There aren't all providers that provide every option.

Features Custodial Non-custodial
Contract with a third entity
Sign up for the service of a business governed by terms 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 account recovery services by contacting the company. 		Y N
Support
The user will have access to and receive support via the company. 		Y N
Automatic exchange to stablecoin/other crypto
You can opt to have your crypto transformed into a different cryptocurrency or stablecoin. 		Y Y
Automatic exchange of fiat currency
It is possible to opt for cryptocurrency converted into fiat automatically. Please note that calculations for exchange rates and rates may differ by your partner. 		Y N
Automatic Settlement to your Bank
You may opt to have your money paid to your bank automatically. 		Y N
Get the exact amount of fiat currency
This can help avoid being exposed to volatility in the price of crypto. Solutions that are not custodial can reduce - but not eliminate - volatility by choosing to only allow stablecoins. 		Y N
Specific features for merchants
Some providers offer features to make it easier for merchants to save time and effort. These include things like risk profiling (to help make sure your business doesn't get funds from bad actors), under/overpayment protection, and invoicing via email. 		Y N
Transaction finalization protection
Blockchains depend on blocks to be produced in order to complete transactions. The more blocks that are created following a specific transaction, the more secure that transaction is. Security helps to avoid the risk of sending items and having the transaction be reversed. 		Y N
Insurance for funds
Custodial as well as non-custodial options have a chance of being hacked. The insurance on funds is a protection for those using a custodial solution. But, the protection offered by insurance companies varies and merchants should carefully research their partners' insurance and reimbursement guidelines. 		Y N
Y Y
Supports subscriptions/recurring payments
Customers paying with cryptocurrency will need to authorize every transaction. So recurring payments are not an option, though certain custodial services offer the ability to generate and automatically send invoices according to a set schedule. 		N N
Transaction fees that are low
Non-custodial and custodial payment companies typically charge significantly less transaction fees (1-1.5%) than traditional payment providers (2-3.5%). 		Y Y
The exposure to crypto network (e.g. gas) fees
Direct cryptocurrency transactions come with specific network charges - with Ethereum this being known as 'gas' fees. Certain payment processors pay the fees, while others pass them on. 		N Y
sole control
The only one who can make outgoing transactions through your account. Any other person or entity cannot authorize transactions, unless they have access to the private password. 		N Y
Accept all cryptocurrency, on any network
The processors for crypto payments support a different range of crypto networks and coins. With custodial solutions, you're restricted to the currency they accept. Alternative solutions that aren't custodial can provide a more choices. 		N Y
integration
It's one thing receiving the payment, but it's a different thing to identify which client has made the payment, and to know for what purchase. Our partners have solid integrations that cover everything from setting up to managing daily. 		Y Y

Examine your options and select the right cryptocurrency payments provider to run your business.

The options for cryptocurrency can be confusing however it's well worthwhile to offer the best payment option that meets yours and your customers' requirements. Spend the time to go through the pros and cons of the two types of payment providers that use crypto, and then consider which specific provider will best suit your business.