How to accept crypto payments within my business model? More and more online businesses are looking for optimal answers to this question. To accept and process crypto payments, you have to choose a crypto payment gateway solution, that suits your business paradigm. Options range from your own custom solution to open-source crypto payment gateway product to an omni-channel gateway platform. As always, each scenario has its pros and cons. So, conceptually, the three main options are as follows.
Building Your Own Crypto Payment Gateway Solution
This approach the most flexible, yet the most challenging one.
You’ll need to write your own custom logic to accept payments. Besides that, you will have to support smart contracts to be able to implement transaction processing on a blockchain. Using your own solution allows you to save on transaction fees. However, complex development works discourage many businesses from choosing this option.
Benefits
• Full control over the payment process. You control all aspects of payment handling and merchant lifecycle. From merchant underwriting to funding to chargeback handling.
• No merchant underwriting limitations. You can tailor your solution so that it supports all your target MCC codes.
• No transaction processing fees. As you are not relying on any third-party processors, you don’t have to pay them anything.
Challenges
• Liability, in case of smart-contract exploits. As the developer of your solution, you assume full liability for its operation. Financial liability included.
• Upfront development and ongoing maintenance costs. According to rough estimates, development of your own custom solution from scratch costs at least $150-200K. Moreover, development process might take 6 to 18 months.
• Need for an additional solution for non-crypto payments. Cryptocurrency payment method is unlikely to replace fiat currency during the nearest decade. So, you will need to have fiat to fiat, crypto to fiat, and fiat to crypto payment gateway solutions at hand.
Third-party Crypto Payment Gateway Solution
This is the most popular option among businesses wanting to accept crypto payments online and at POS. The choice of cryptocurrency payment gateways is wide and growing. Examples include Coingate, Shopify Gateway, Coinpayments, NOWPayments, CoinsBank, and many others.
Under the third-party scenario, you integrate your platform with a cryptocurrency payment gateway through its API. If you choose this option, you delegate all blockchain processing to the third party. This approach significantly reduces your time to market and has no significant upfront cost. However, it requires you to pay fees for each transaction you process.
Benefits
• Fast initial setup and integration process. Under ideal-case scenario, you might be able to start processing in just 3 to 4 weeks.
• No significant upfront cost. Your development and integration efforts are relatively small. So, your upfront costs are also minimum.
• Limited liability in case of smart contract exploits. As the third-party crypto payment processor or gateway controls most of the process, it also assumes most of the liability.
Challenges
• Limited control over payments logic and the underwriting process. You can only underwrite merchants, whose MCC are supported by the crypto-currency payment gateway provider.
• Per transaction processing fee. As you do not own the solution, you have to pay transaction processing fees to the third party. Amount of these fees depends on the terms of your particular agreement. In case of each specific third-party crypto payment gateway solution, you should negotiate the fees with the provider.
• Need for an additional solution for non-crypto payments. As in the case of the previous option, the solution is not an omni-channel one. So, if you need to accept credit card and crypto payments, a crypto payment gateway solution will not suffice.
Omni-channel Payment Gateway Solution
This is the most flexible approach for businesses. However, it is not as widely available as the pure crypto payment gateway solution.
Businesses that can accept only crypto payments are few. Most need to accept other, fiat-currency-based forms of payment. These include credit cards, bank payments, as well as mobile and in-app payments. The latter ones mostly involve popular digital wallets such as PayPal, GooglePay, or ApplePay.
Just like under the crypto payment gateway scenario, you will need to go through an integration process. That is, you must integrate your platform with the omni-channel crypto friendly payment gateway using its API. As a result (and reward), in addition to blockchain payments, you will be able to support all other payment methods.
Benefits
• Single integration process for all (or most) payment forms. As you integrate your platform with the omni-channel gateway solution, you get support for all payment methods at once. Integration process takes much less than development of a custom solution.
• No significant upfront cost. You might go with a classical or white-label omni-channel gateway solution. You might also license an open-source omni-channel gateway product and get an opportunity to further customize it. In each of these cases the costs are much lower than in the case of custom solution development from scratch.
• Limited liability in case of smart contract exploits or system hacks. Most of the responsibility is assumed by the third party. If the omni-channel gateway provider delegates greater control over the process to you, it entails greater liability.
Challenges
• Limited control over payments logic and the underwriting process. If you use a third-party omni-channel gateway solution, this third party controls most of the processes. Besides, the third party might not support some of your target MCC codes. So, you won’t be able to underwrite the respective merchants and, consequently, lose part of your revenues.
• Per transaction processing fee. Transaction fees will be different for all payment methods supported by the omni-channel payment gateway solution.
• Dependence on a single processing partner for all forms of payment and MCC codes.
To summarize
In our view, despite the challenges associated with an omnichannel solution, it is still the best option for most businesses. It provides access to both traditional forms of payments and cryptocurrency payments through a single integration and a single business relationship. An omni-channel gateway solution provides much more flexibility in terms of payment types than any crypto-only gateway. An omni-channel gateway solution allows you to handle most of the major payment types. So, merchants that want to accept these payment types will be more willing to partner with you as a PayFac. Find out more about the new crypto payments offering from United Thinkers. Learn more about UniPay Gateway – an omni-channel payment solution for payment facilitators and software platforms.
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