How To Accept Cryptocurrency Payments? Best Solutions To Launch Business
In recent years, virtual money have enlarged its representation as a means of payment, no doubt. It is a financial instrument in many countries: El Salvador, Honduras, Switzerland, Turkey, to name a few. Giants like Amazon, McDonald’s, and Starbucks accept crypto payments almost everywhere. Fashion high-fliers, including Gucci, Off-White, and Balenciaga, are gradually adopting cryptocurrencies.
Nevertheless, surveys show that 67% of cryptocurrency owners and above 50% of non-owners feel that there are too few businesses accepting crypto and ask how to receive it conveniently. This data shows that cryptocurrency payments are underrepresented. It means you can be an ambitious visionary who will introduce crypto to more companies. In this article, we are discussing how to make a thriving business in cryptocurrency processing. Off we go!
What Is Crypto Processing?
It is a gateway that enables buyers to purchase goods in cryptocurrency. In fact, this tool resembles acquiring and p2p operations, yet is peculiar in certain aspects:
Transactions are cheaper, and fees rarely exceed 1% because no intermediary governs transactions
Tracking is convenient because a business can see what client sends money for which product
Exchange is automatic, which reduces volatility, plus removes the need to convert crypto to fiat for accountancy
Besides the general characteristics mentioned above, a poll among American entrepreneurs conducted by the audit company Deloitte in December 2021 demonstrated even more:
| Crypto Processing | |
| For Brand | For Administration |
| Improved customer service | Quick access to funds |
| Expanded customer base | Internal revenue administration |
| Innovative brand image | Blockchain-based technology for DeFi |
Initially, companies allowed a bitcoin payment method as part of their marketing strategy. Meanwhile, the situation changed drastically. Now businesses seek processing for economic efficiency and instant payments, planning to work with virtual money long-term.
Nevertheless, cryptoprocessing can be implemented into a solely crypto-based enterprise, for example, wallet. In white label cryptocurrency wallets, processing is part of the package.
How To Start Business In Crypto Processing?
Cryptocurrencies are becoming a cost-effective alternative to international bank transfers. Entrepreneurs of any level want to know how to accept cryptocurrency. In this regard, becoming a provider is a high-potential business. As per the payment service provider Paysafe, 56% of retailers admit that digital money is the future. Furthermore, they sense that without this instrument, they will lose customers.
What do you need to become a provider?
- Software
- Licence
- AML/KYC team
- Startup capital
Software
You should review developers who specialise in this field and can provide a turnkey service for your business, with maximum simplicity and minimum risks. Check the previous projects of your developer. We also recommend contacting owners and users to get unbiased insights into the capabilities of your future gateway.
To professionally weigh up the pros and cons, here is a checklist of questions to ask when searching for the right developer:
- What feature does your processor have? A quick note, an extensive set of features sometimes results in poor quality and damaged stability.
- How many cryptocurrencies does this service work with? Know in advance whether this crypto processing is a mono-service accepting only one currency, say bitcoin, or a poly-service.
- How many steps should your clients and their users take? Long scenarios repel the public away. When it is burdensome for your client to implement this tool and inconvenient for users, your business will quickly stagnate.
- What is your geography? The more countries your product can cover, the more businesses willing to accept crypto payments online you will attract. Also, think about the available languages of your crypto processing.
- Is there an automatic conversion? If a business takes cryptocurrencies, it is not necessary to store them. To mitigate volatility, software should automatically translate accepted crypto into fiat.
- How safe is this crypto processing? Reliable software must ensure the utmost security. It will help protect your partners against DDoS attacks and encrypt user data.
- What documents will confirm your cooperation? As an emerging crypto processing provider, you want complete information about commercial terms and other formalities to alleviate risks.
After accepting comprehensive answers, you can choose the most appropriate crypto processing engine and move on to another requirement.
Licence
Based on the country of your business, you will need to legalise your company accordingly. For example, in the US, a crypto processing enterprise is deemed a money service business, thus demanding you to get a licence and pay taxes. By comparison, Swiss and Estonian governments are more friendly, since they do not require that you pay VAT. All in all, it would be wise of you to follow regulatory framework updates for a chosen jurisdiction.
AML/KYC team
Remember the Deloitte survey? Analysts also asked its participants about the obstacles they faced accepting crypto payments. 43% of respondents note that the real concern is to guarantee customer security. A full-fledged crypto processing business cannot operate without meeting the prerequisites of AML/KYC standards.
An AML/KYC department holds responsibility for verifying customers when they transact money. These specialists also check the source of crypto, whether it was on the darknet, involved in terrorism, money laundering, or other prohibited activities. In other words, you need an AML/KYC team to fulfil the requirements of financial monitoring and maintain customer security.
Startup capital
How much money do you need to open your crypto processing business? Costs primarily rely on your processes. Here come the basic expense items:
- Software: ordering a turnkey product — the simplest and cheapest approach — or developing your software.
- Legalisation of a business: registering a company, getting licences, opening a corporate account.
- Organization of the working process: renting premises, purchasing equipment and furniture.
- Labour remuneration and budget payments: paying employee salaries, social contributions, taxes.
- Promotion and selling: running ads, hiring representatives, and arranging PR events.
- Other costs: repaying loans, buying stationary.
We recommend avoiding withdrawing funds from circulation before your enterprise profits. Spend the startup capital only on business needs. Furthermore, consider force majeure, for instance, a rent price hike. For that, always keep a reserve sum.
Calculating your startup capital in advance will boost your chances of establishing a thriving business. You will not fail because of funds insufficiency for rent or purchase. To highlight essential cost items, draw up a business plan first.
Key Takeaways
The Deloitte survey reveals that nearly 75% of retailers plan on embedding cryptocurrency within the next 2 years. With that said, think about launching your own company that will facilitate integration with a crypto payment gateway. As the developer of crypto solutions, Merkeleon offers you its white-label processing service and professional assistance at every step. To discuss this product and negotiate the terms of collaboration, contact our specialists at any time.
