How to choose a crypto payment provider
Accepting cryptocurrency on your ecommerce store can open up new opportunities to expand your audience while lowering transaction fees and improving cash flow. If you’re excited about the benefits of accepting cryptocurrency in your WooCommerce store and ready to get started, then this article is for you.
We’ll walk you through some of the key decisions you need to make and outline the features available from different solution types. We’ll also demystify a little jargon along the way.
Understanding the two approaches to crypto payments
In general, if you want to accept cryptocurrency on your website, you have two options:
- Cryptolite: If you want to accept cryptocurrency for payments but have little interest beyond that, this is for you. They will look for solutions that simply ensure that you get the right amount of money in your bank account as quickly and inexpensively as possible.
- A bit more: This category can get complicated quickly. If you want to keep some or all of your crypto as crypto, accept a wider range of currencies, or sell NFTs, you need more advanced solutions.
Choosing between a crypto payment provider with and without custody
When it comes to accepting cryptocurrencies on your WooCommerce website, the most important decision you need to make is whether to go with a custody or non-custodial payments provider.
This goes hand-in-hand with your choice of “crypto lite” or “something more”.
Depository crypto payment providers
For many traders, this option offers security and a familiar user experience. You have access to support, you can rely on the terms of service and you can use other functions (e.g. automatic billing with your bank) because your service provider manages your crypto accounts on your behalf.
If you are going after “Crypto Lite”, crypto payment providers with custody are the only choice.
The advantages of a crypto payment provider with custody include:
- A fully integrated WooCommerce extension
- The ability to accept one or more cryptocurrencies from customers
- Payments are sent directly to your bank account in fiat currency
- Account access with email and password
- Support Services
- Low transaction fees and protection against refunds and chargebacks
Crypto payment providers without custody
If you are knowledgeable about cryptocurrency and want access to advanced features, consider a non-custodial solution. With no-custody solutions, you have full control and sole responsibility for the security and management of your crypto accounts. This is not to be taken lightly, but for skilled shopkeepers it unlocks the full potential of cryptocurrency.
The advantages of a no-custodial crypto payment provider:
- Access and control your cryptos as soon as they’re received — no waiting for third-party billing.
- Fewer terms and conditions restrictions – no one can suspend or cancel your account or services.
- Actions subject only to applicable law and your own ability. You can sell whatever you want, to whoever you want, and manage your cryptocurrency however you see fit.
- Sole responsibility for your account security – no privacy breaches or third party hacks can affect your funds.
Crypto Vocabulary Check
Fiat currency: Currency issued by a government (e.g. USD, EUR, GBP).
Cryptocurrency: Currency secured by cryptographic principles (e.g. BTC, ETH, DOGE).
Stablecoins: A type of cryptocurrency tied to a fiat currency. (e.g. USDC, where 1 USDC = 1 USD).
Features of Crypto Payment Providers
There are many features to consider when choosing between a provider with and without custody.
Below is a full list of features and considerations to illustrate the differences between the options. When using the table, it is important to understand that this is a general guide to what is possible. Not all partners offer all functions.
| feature | care | non-custodial |
| contract with a third party You sign up for a service with a company that is subject to the Terms of Service. |
Y | N |
| Account Recovery If you lose access to your account, you can request a password reset from the provider or access account recovery services. |
Y | N |
| Support You can access the provider and get support. |
Y | N |
| Automatic exchange to stablecoin/other crypto You can choose to automatically convert crypto to another crypto or stablecoin. |
Y | Y |
| Automatic switch to Fiat You can choose to automatically convert crypto to fiat. Note that exchange rate calculations and rates vary by partner. |
Y | N |
| Automatic settlement with your bank You can choose to have your money automatically transferred to your bank. |
Y | N |
| Get the exact value in fiat currency This helps avoid crypto price fluctuations. Non-custodial solutions can mitigate but not eliminate volatility by choosing to only accept stablecoins. |
Y | N |
| Dealer Specific Features Some providers offer features to save traders time and energy. This includes things like risk profiling (to ensure you don’t receive funds from bad actors), under/overpayment protection, and email invoicing. |
Y | N |
| Transaction Completion Protection Blockchains rely on “blocks” being produced to complete transactions. The more blocks produced after a given transaction, the more secure that transaction is. The protection helps to avoid sending goods and the subsequent reversal of the transaction. |
Y | N |
| fund insurance Both non-custodial and non-custodial solutions carry a hacking risk. Fund insurance can protect those using a custody account solution. However, protection varies widely and merchants should carefully research their partners’ insurance and refund policies. |
Y | N |
| No automatic chargebacks or refunds Chargebacks and automatic refunds are features offered by traditional payment networks. Crypto eliminates the risk of chargeback fraud and avoids having funds removed from your account by third parties. However, as we mentioned in our introductory post, you need to resolve disputes. |
Y | Y |
| Supports subscriptions/recurring payments Customers paying with cryptocurrency must authorize each transaction. Therefore, recurring payments aren’t possible, but some custodial solutions provide tools to automatically create and send invoices on a schedule. |
N | N |
| Low transaction fees Both deposit and non-deposit payment providers typically offer significantly lower transaction fees (1-1.5%) than traditional payment providers (2-3.5%). |
Y | Y |
| Charged by crypto network fees (e.g. gas). Direct cryptocurrency transactions come with their own network fees — in Ethereum, these are called “gas” fees. Some payment processors cover these fees; some pass it on. |
N | Y |
| sole control You are the only person who can make outgoing transactions from your account. No other entity/person can authorize transactions unless they are given access to your private key. |
N | Y |
| Accept any cryptocurrency on any network Crypto payment processors support a different set of crypto networks and coins. With deposit solutions, you are limited by the supported currencies. Non-custodial solutions can offer a wider range of options. |
N | Y |
| WooCommerce integration It’s one thing to receive payment, but another to know which customer made payment for which order. Our partners offer robust WooCommerce integrations, covering everything from configuration to day-to-day management. |
Y | Y |
Review your options and choose the right cryptocurrency payment provider for your business
Cryptocurrency solutions can seem confusing, but it pays to offer payment options that best suit your needs and those of your customers. Take the time to go through the pros and cons of the two types of crypto payment providers, and then consider which specific provider is right for your business.
