More online stores add crypto as their payment method. Cryptocurrency is convenient and reliable, and it is not a big deal to accept Bitcoin on your website. But is it as good as it seems to be? We are going to speak about the downsides of crypto acquiring to gain a realistic picture and assess the risks of this popular approach.
What is Cryptocurrency Acquiring
When online stores provide payments in cryptocurrencies it is called crypto acquiring by analogy with web acquiring. The process implies cooperation with a crypto payment processor which provides a service of sending coins from a customer’s crypto wallet to a merchant’s one. Processors charge a commission for it, and so does a blockchain. When miners confirm the transaction, the coins arrive, so the payment is considered completed and the purchase is done. What can go wrong?
Irreversible transactions
If customers wish to return their money in brick-and-mortar shops, there is a special procedure of reimbursement for fiat payments. However, it is quite a bit of a challenge in the blockchain. If a customer makes a transaction and then changes their mind or sends the wrong amount or to the wrong address, the process is doomed to be completed anyway. It is caused by the immutability of the blockchain. Once confirmed, the transaction is permanently recorded on the blockchain, and it is impossible to alter or reverse it. There is an option to cancel a transaction but not every processor gives such an opportunity and it can be done only if a transaction has not been confirmed by the network yet.
Safety and Security
The blockchain is anonymous but transparent at the same time. Nobody knows which address belongs to, but transactions are traceable in the network. Anybody can see in any explorer from which address, where to, and how many coins are sent. Many processors have a ‘blend pool’ for payments. It means a customer sends coins to a processor, and then a merchant only gets a corresponding sum from the processor, not associated with the customer’s address. So, in this case the merchant has no idea who these coins belonged to before. Such a design can be unsafe and insecure. Some crypto payment processors work differently and allow merchants to work with isolated wallets to make sure which coins you work with and trace the chain of addresses easily. Also, you can transfer exact coins from your wallet without affecting other payments. It is helpful if you do a KYC verification for each customer or if someone has sent you money marked as suspicious.
Volatility
Cryptocurrencies are incredibly volatile. For example, in 2021, Bitcoin’s value dropped 30% in one day. No matter what the reasons are, it can influence online stores using crypto acquiring. Most crypto payment processors collect all the payments they receive from customers and then send them to merchants at a particular time, for example once a day. Such practices can cause price changes. Sometimes it takes a shop hours to receive coins from clients and it can be unprofitable because the rate has fallen for this period and prices have changed dramatically. Is there a way out? Yes, fortunately, some processors provide immediate transactions and do not detain coins. In this case, the time you wait only depends on the network confirmation and not on the processor itself. And usually it is faster than the fiat payments via the bank system.
How to choose a crypto acquiring service
As we can see there are a lot of pitfalls that are worth thinking about before integrating crypto payments on a website. Some of them are associated with the blockchain itself, and some of them can be avoided by exploring services of crypto payment processors.
Apirone allows immediate transactions and provides isolated wallets and addresses to make operations with crypto fast and reliable. Also, these solutions help to accept crypto payments securely and mitigate risks associated with the volatility of cryptocurrencies.
The blockchain is not perfect, but it is not a reason to stay off the crypto acquiring in your e-commerce business. There are no ideal providers, but some downsides can be eliminated by making a reasonable choice based on what is important for your business.
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