Welcome to “The Merchants Guide to Accepting Crypto: The Questions to Ask”, a new PYMNTS series aimed at helping merchants large and small, online and in-store, who want to accept crypto payments, figure out what they need know to move forward.
In this second of seven articles, PYMNTS’ Karen Webster sat down with Stephen Pair, CEO of crypto-specific payment processor BitPay, which has been around for about 11 years, to discuss the range of cryptocurrencies and digital wallets. which should be offered and supported.
See also: Expertise, experience and focus are key when choosing a crypto payments processor
Once a merchant decides they want to accept cryptocurrencies at checkout, the next thing they need to do is decide which ones to accept – there are around 10,000 cryptos out there by some accounts.
“When you ask merchants which payment methods they would like to accept, the answer is often all of them,” Pair said.
However, the best answer, Pair said, is a payment processor that can accept all major cryptocurrencies — which really isn’t as intimidating as it sounds. For one thing, if you measure by market capitalization, the first dozen or so will cover the majority of potential buyers. BitPay currently accepts 13, covering around 70% of the wealth stored in crypto.
“Second, we are seeing some cool coins coming in, like dogecoin, that are getting a lot of interest and really have marketing value for the merchant,” he added. Third, merchants might also want to look into smaller cryptocurrencies that do cool things with payouts.
Next are digital wallets, and while there aren’t thousands of them, there are certainly hundreds of them. In this case, there’s a two-part answer, Pair said. The first is that your processor should assess and support as much as possible, but the second part is that the processor should test and understand each wallet.
“Some wallets perform better than others, so you want to make sure the processor is testing those wallets,” he said. “You want to make sure you’re not just accepting the payment because the wallet would generate it. Some wallets will get the payment exactly right, 100% of the time. Other wallets leave it up to the user to enter the amount to pay.
This means “there are many ways a wallet can go wrong, either overpaying or underpaying,” Pair said, citing different ways of calculating exchange rates, for example. “They could be wrong in different ways. And sometimes you also need to educate the buyer, depending on the wallet and how easy it is to use. There are pitfalls.
This means testing as many wallets as possible to ensure the consumer has the best possible experience and, if necessary, educating them on how to use that wallet or even “recommend the consumer consider another wallet”, Pair said.
From the merchant’s perspective, they have to accept that some wallet errors are unavoidable, “so you also want the payment processor to protect the merchant from all of that,” he said. “If these errors occur, it should be an automatic refund scenario or a way to correct the error that does not involve the merchant or their support staff.”
A practice followed by BitPay, he said, is to let the merchant decide if they want to take as many wallets as possible – accepting that there will be problems to solve – or only accept wallets that work all the time, accepting that some customers will be left behind.
“We will take care of all the details,” he said. “If someone accidentally underpays or overpays, we take care of the whole process with the consumer, collecting that money and redoing that transaction. The trader never even needs to be aware of it.
In terms of payment format, Pair suggests choosing a processor that can make payments in the merchant’s local currency rather than taking crypto into their own wallet.
Ease of use aside, tax rules for crypto can be complex and are not yet clear in the United States, including requiring a capital gains tax return on each specific cryptocurrency that has been accepted at one price and sold at another.
Apps are different
Payment apps like PayPal are often a different matter altogether, Pair said. While it sounds the same to both user and merchant, there are substantial differences, starting with the fact that payments aren’t really made in crypto and others are walled gardens for their own users and networks. tradespeople.
“Many services that allow users to invest in crypto don’t actually allow you to deposit or withdraw crypto and they don’t actually allow you to use blockchain for payment,” he said. . “They just deduct from those users’ balance.”
As a result, “you’re not reaching the widest crypto-spending audience,” Pair said, saying people who want to pay with crypto tend to be “power users” of crypto who want to keep the money instead. control of their digital assets. than leaving them on a hosted wallet.
“You really want the processor to be able to receive payments from any” of the hundreds of apps that support crypto, he said. Otherwise, you’re “missing out on hundreds of other apps that most people who use crypto actually use.”
Another subset of this is that the processor should be able to support the Bitcoin Lightning Network, a “layer 2” blockchain that sits on top of bitcoin and handles transactions, simply sending the results to the main blockchain. slow, often cluttered and expensive.
“Many companies support the Lightning Network,” he said, noting that it increases payment speed while maintaining the security — and popularity — of the bitcoin network. “I think it’s very important that the processor supports it.”
To make easy
Finally, Pair said that merchant integration is an area BitPay is focusing on, with the simplest integrations – a simple button on a small merchant’s website – taking minutes, while those using platforms -popular, cloud-hosted, or self-hosted e-commerce forms can usually be completed within hours.
Large merchants with custom e-commerce platforms can do this in just a week or two – plus testing – because BitPay has a “robust set of APIs and libraries, and most major languages” .
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