Over the past decade, the world of finance has witnessed a significant shift towards digital payments, and cryptocurrencies have emerged as a popular mode of transaction. With the growing popularity of Bitcoin & CO, businesses are exploring various ways to integrate these digital currencies into their payment systems.
One such method is crypto acquiring, which is a process that allows merchants to accept digital currencies as a form of payment for goods and services. In this article, we will explore crypto processing, how crypto acquiring works, the difference between these two terms, and why it is becoming an increasingly popular option for businesses looking to expand their payment methods.
What Is Crypto Acquiring?
Although you may not be familiar with the technical definition of “acquiring,” you encounter this concept regularly in your daily life. Nowadays, most of us use cards to pay for purchases at shops, cafes, and other establishments. We also receive our wages via card and input our card details to make online purchases. This is what acquiring means.
In the payment industry, acquiring refers to the ability to make payments using cards. Banks that act as acquirers are licensed participants in the payment system and are responsible for processing and accepting transactions. However, not all banks can become acquirers, as they need to satisfy certain conditions set by the payment system to obtain the necessary status and license.
Crypto acquiring is a process that enables merchants to accept payments in digital currencies such as Bitcoin, Ethereum, and others. Similar to traditional card acquiring, which allows retailers to accept payments using debit and credit cards, crypto acquiring integrates with the merchant’s existing payment system and provides a platform for customers to make payments in cryptocurrencies.
Crypto Acquiring and Crypto Processing: Is There a Difference?
Crypto processing is the procedure of transferring cryptocurrency from one party to another. This can include sending and receiving digital payments and converting them. Crypto processing involves the use of a cryptocurrency exchange, which acts as an intermediary between buyers and sellers of digital assets.
Furthermore, crypto processing involves the use of a crypto-to-fiat conversion service. The service provider will convert the cryptocurrency payment into traditional currency, minus their transaction fee, and settle the funds to the merchant’s account. Crypto processing enables businesses to accept cryptocurrency payments while avoiding the volatility and risks associated with holding digital assets.
So, is there a difference between crypto acquiring and crypto processing? The answer is yes. Crypto acquiring involves accepting and receiving cryptocurrency payments into a wallet, while crypto processing involves converting those payments into fiat currency and depositing the funds into a bank account.
How Does Crypto Acquiring Work?
To accept crypto payments, merchants need to partner with a crypto-acquiring service provider. Once the integration is complete, customers can make payments using their preferred cryptocurrency by scanning a QR code or by sending the payment directly to the merchant’s digital wallet address.
Then a cryptoprocessor would convert the cryptocurrency payment into the fiat of the merchant’s choice, such as US dollars or euros, and deposit the funds into the business’s account. The conversion rate used by the payment processor is typically based on the cryptocurrency’s current exchange rate for the payment.
How to Start Accepting Cryptocurrency with Whitepay?
Whitepay is a SaaS company that provides cryptocurrency solutions for businesses and charities: crypto acquiring, POS terminals, crypto payment gateway for WooCommerce, and payment pages.
To add accepting cryptocurrency payments with Whitepay, you just need to leave your contact details on the site. After that, the team will contact you and assist you at all stages of software integration. You will receive complete information on how to accept crypto payments and all the available ways for your customers to pay for their purchases with crypto.
Let’s examine the steps involved in setting up Whitepay’s crypto-acquiring process:
- Sign up for a Whitepay Account. Go to the Whitepay website and sign up for an account by providing the required details.
- Configure Your Account. Once your account is set up, you’ll need to configure it by adding your bank account details and linking it to your cryptocurrency wallet. Whitepay supports more than 140 cryptocurrencies, so make sure you choose the ones you want to accept.
- Generate a Payment Request. Once your account is set up and configured, you can generate a payment request for your customers. This can be done by providing your customers with a cryptocurrency address or QR code to scan and send the payment to.
- Receive the Payment. Once your customer sends the payment, it will be processed by the Whitepay system, and the cryptocurrency will be credited to your account.
- Withdraw Your Funds. Once the cryptocurrency is credited to your account, you can withdraw it to your bank account or cryptocurrency wallet.
It is worth noting that the conversion rate of digital currencies can be volatile, and merchants may face price fluctuations in their preferred currency. To mitigate this risk, Whitepay allows merchants to lock in the price for 2 minutes.
Is Crypto Acquiring Safe?
The safety of crypto acquiring depends on several factors, including the reputation and security measures of the exchange or platform you’re using and your ability to secure your crypto assets.
It’s crucial to take steps to secure your digital assets yourself. This can include using strong passwords and two-factor authentication, not sharing your private keys with anyone, and storing your cryptocurrency in a secure hardware wallet.
Advantages of Crypto Acquiring: Benefits for Business
● Increased Customer Base. By accepting cryptocurrencies, businesses can reach a wider customer base, including individuals who prefer to use digital assets as their primary payment method. This can help entrepreneurs expand their reach and tap into new markets.
● Lower Transaction Fees. Traditional payment methods often incur high transaction fees, which can affect a business’s profits. On the other hand, cryptocurrency transactions typically have much lower fees, which can help businesses save money.
● Enhanced Security. Cryptocurrency transactions are secured using advanced encryption techniques, which makes them virtually immune to fraud and hacking attempts. This can help businesses reduce their risk of financial losses due to fraudulent activity.
● International Accessibility. Cryptocurrencies are not bound by the same restrictions as traditional payment methods, which can make them an ideal option for businesses that operate globally.
Disadvantages of Crypto Acquiring
● Limited Acceptance. While the use of cryptocurrencies is growing, they are still not accepted by all merchants and businesses. This can limit the utility of accepting cryptocurrency payments and make it difficult to convert them back into traditional currencies.
● Security Risks. Cryptocurrency transactions are irreversible and are not backed by any government or financial institution.
● Complexity. Accepting cryptocurrency payments can be complex and time-consuming, requiring merchants to set up a digital wallet and understand how to process transactions on the blockchain.
Conclusion About Crypto Acquiring
The fundamental principle of cryptocurrency is to eliminate third-party involvement in financial transactions. While this concept may be welcomed by those who embrace change, some may be hesitant to accept it. Crypto acquiring is still a new concept, and in a world where value has always been associated with physical assets, it may be challenging to comprehend.
However, as a business owner who understands cryptocurrency, you may not have any reservations about accepting it. If you fall into this category, intermediaries like Whitepay can help you address your concerns by providing immediate fiat currency exchanges. This allows you to conduct your business finances as you see fit while giving your customers the payment options they desire.
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