How Do Crypto Payments Work?
Application of Cryptocurrency In The Real World
At first glance, cryptocurrency seems to be a whole different digital community that only seasoned investors can pursue. However, crypto is more common than you might perceive. And did you know that besides being an investment, it has another feature? Some establishments have slowly realized that consumers may now use their crypto assets to pay for goods and services, thanks to its commonality.
Much like debit and credit cards, e-wallets, and physical cash, users may now use their digital currency as payment for their purchases. It’s a convenient method that the world could use right now, especially with the rise of contactless payments. And because of technological advances, payment gateways offer a simpler and user-friendly way to send crypto payments. As a result, you’ll save on time, energy, and resources.
Establishments accept some of the most common cryptocurrencies are BUSD, BTC, and BNB. And if you’re curious, two of the most common businesses that accept crypto payments are companies like Microsoft and Starbucks.
How Do Crypto Payments Work?
Crypto payments work by transferring cryptocurrencies such as BTC and ETH from one user’s crypto wallet to another. However, you need to transfer it manually. The process is quite simple; you need to enter the recipient’s public address on your wallet and send the crypto payment.
Easy, right?
However, you must be careful. Even one error could lead to irreversible damage. And in the world of crypto, there are several concerns to watch out for. And two of the most common issues are sending the wrong type of coin or clicking on the wrong blockchain network.
Using Cryptocurrency Cards For Payments
Individuals often use their cards for utmost convenience to pay for goods and services. But did you know that you can use them to pay using cryptocurrency?
Besides manually transferring crypto funds as payment, you can also use credit and debit cards. Just make sure that they are linked to your cryptocurrency assets for an easier transaction. This way, crypto payments can be made even though the establishment only accepts fiat.
However, it takes more effort because you need to pre-load it by storing crypto coins and tokens by contacting your card provider.
But how does it convert into fiat?
Whenever you purchase an item or a service, the crypto exchange sells the digital assets stored in your card, equating to the fiat price you need to pay. Upon receiving fiat funds, it will transfer the payment to the establishment’s account.
Did you know that you may use your crypto coins to pay off your card’s monthly credit in some instances? Of course, you must clarify this first with your card provider to ensure that they accept crypto payments.
Another thing to consider is your card’s safety. With any transaction, protect card information because it can be used to access your account and, ultimately, your crypto assets.
The Pros And Cons of Crypto Payments
Pro: No Chargebacks
One of the best features of crypto payments is the lack of chargebacks. The moment your payment has been processed, neither refunds nor chargebacks are possible. It’s what makes crypto payments so tempting to high-risk businessmen and women.
Con: Lack of E-Wallet
Modern payment schemes typically stem from e-wallets such as Venmo and PayPal. However, most establishments today don’t have digital wallets — hence the need to translate coins into fiat.
Pro: Significantly Low Fees
Upon using crypto as payment, users will notice a significant drop in transaction fees compared to traditional credit cards. And in 2019, crypto transaction fees reached an all-time low on the market. Your long-term crypto investments will surely benefit from the low charges.
Con: Constant Fluctuation
It’s no surprise that cryptocurrency is constantly fluctuating — it’s not guaranteed that you wouldn’t lose on a swing. And because fiat’s exchange rate isn’t stable, you might lose more than you intend to upon using crypto payments.
The Most Popular Cryptocurrencies In The Market
If you’re wondering which cryptocurrency to try out, here are some of the most famous options you can check out:
Beta C (Bitcoin)
Beta C, infamously known as Bitcoin, is one of the most sought-after crypto coins. It’s a great starting point for most crypto enthusiasts because of its high value and easy trading system.
Ripple
Ripple is a coin primarily intended for financial players, and it’s here to stay for a long time. It’s a great investment because it typically translates well for XRP’s price daily.
Litecoin
Litecoin is one of the first altcoins that rose on the market, making it a hall of famer. On average, it holds its value significantly better than newer altcoins, making it a great investment choice.
The Takeaway
Crypto payments pave the way for a quick, affordable, and convenient method to transfer funds. It’s a new payment scheme that crypto enthusiasts ought to explore. However, it might be challenging to do so when standing in a busy line of people who only want to get their coffee fix for the day. So if you’re planning to try paying via crypto, make sure to do it in a not-so-busy establishment.
