Why Is Cryptocurrency Payment Processing On the Up Despite the 2022 Bear Market?

Intro: Of course, we’re all aware of the market situation, with Bitcoin, the cryptocurrency processing market’s flagship, falling over 60% from its November 2021 high. Marked calamities such as the FTX debacle, the Terra Luna crisis and the overwhelming amount of cross-bridge hacks taking place.

It seems curious, therefore, that 77% of merchants accepting crypto as a payment medium are observing increases in cross border sales. As a result, around a quarter of all online businesses are looking to integrate cryptocurrency payment gateways into their systems by 2025. Today, we ought to understand why that is exactly – after all, it just doesn’t make sense – or does it?

Crypto Payment Processing Industry Remains Unaffected by the Crisis

Despite the protracted bear cycle and digital asset industry shedding over $2 trillion in capitalisation, crypto gateway payments are experiencing an increase in consumer interest.

According to the internal analytics of CryptoProcessing.com, the largest bitcoin payment provider by processed volumes, businesses continue to use digital asset transactions despite the dramatic price fluctuations and negative news sentiment. For example, the transactional volumes of the company’s clients have not been at all affected by the Terra Luna crisis.

Moreover, the demand for less volatility crypto assets has also increased. Even though bitcoin payment processingremains the largest in terms of volumes, businesses have been adding stablecoins such as USDT and USDC to their offerings.

Regulation Is Key to Crypto Gateways’ Adoption

Digital assets are beginning to shake off their criminal reputations, and this is largely thanks to regulatory intervention, which is increasing the trust that consumers and merchants feel towards the crypto industry as a whole. Some jurisdictions are leading the way here.

For example, in Singapore, exchanges and other crypto businesses were brought into the scope of domestic regulation by the Payment Services Act 2019.41. Moreover, the UAE recently announced a new regime and regulator for virtual assets. This is without mentioning the EU’s Markets in Crypto Assets (also known as MiCA) which is coming into force very soon. This will forge a regulatory stance on crypto in its 27 member states and will bring a degree of welcome certainty when finalised.

2022 has seen adoption skyrocket, and the findings of MIT are truly thought-provoking. 40% of 18-35 year olds say that they would like to pay for goods and services using crypto some time throughout the year of 2022. This can be attributed firstly to increasing adoption, but it could also be due to the reduction in the perception of crypto as an incredibly volatile commodity with the rise of stablecoins, and the increased number of merchants actually accepting crypto.

What Motivates Businesses to Integrate Cryptocurrency Gateways?

The truth is, regardless of the capitalization of the crypto market, there are a number of benefits when it comes to implementing payment gateway for cryptocurrency.

• Fees are much lower compared to traditional finance

Whereas with fiat payments, merchants can expect to pay up to 3.5%, with a reputable crypto payment provider this number can reach lows of 0.8%. There are also varying discount schemes that can push this number even further down. Moreover, there’s a huge financial incentive for accepting crypto payments as required rolling reserves are naturally dismantled as a result of the impossibility of chargebacks. These funds can therefore be directed to more important corporate facets to improve company performance.

• Cryptocurrency processing is 24/7 and borderless

We should also mention the global nature of digital assets. Unlike the traditional banking system, crypto gives its users an unbeatable global power where they are able to quickly and seamlessly transfer, withdraw and deposit funds regardless of where their locations and status. This is huge for merchant cross-border potential. Customers can finally be more than just local, and there are no disincentives for people paying from different countries. Moreover, there are increased advertising opportunities for merchants as they are able to work on a global scale, tapping into every corner of the niche they occupy.

• Digital assets offers swiftness that banks cannot

Crypto payments are, in most cases, instantaneous, while for merchants using PayPal, 5 working days is an expected timeframe for international payments. These inefficiencies that lead to a loss in revenue in the long term can be mitigated with fast payments. That is exactly what cryptocurrency payment gateways offer. As an added bonus, when it comes to increasing speed, you’re also able to decrease drop-off rates in conversion. Whereas old-fashioned automated AML systems will often reject payments for no good reason, crypto removes such a calamity entirely. CryptoProcessing.com, for example, offers a 99% payment acceptance rate, which differs from the standard 78-88% that is advertised by credit card companies.

Best Cryptocurrency Payment Gateways in 2022

Of course, there are both pros and cons to crypto processing. The biggest cons come with the legal hurdles, integrations and developer management. However, if you choose one of the top 5 crypto payment processors in the world, you should be able to easily navigate these issues. Here are some of the contenders:

BitPay

BitPay is the oldest dog in the cryptocurrency processing market. Since 2011, BitPay has been enabling clients to accept crypto by providing instant fiat conversions. This means that merchants can get paid in real currencies as opposed to the kinds of crypto that their clients prefer to use. With a 1% processing fee, they are not the cheapest on the market, but still very inexpensive when compared to traditional banking.

BitPay supports 8 different currencies and allows deposits in 38 countries around the world. Regardless of the fact that the service has suffered some bad press, with a notable high-level phishing scam in late 2014, and a line of infected code running rampant in 2018, BitPay remains a strong option, with these being largely isolated incidents.

CryptoProcessing by CoinsPaid

CryptoProcessing.com is the number-one crypto payment provider in the world in terms of transactional volumes, with over 16 billion EUR processed in crypto. The service is responsible for approximately 8% of all Bitcoin transactions worldwide.

Importantly, the platform is totally global, offering ready-made solutions to fit any business model. One of the key CryptoProcessing.com’s perks is instant conversion into fiat such as EUR and USD with no volatility risks. The merchants are able to operate their business as usual and don’t need any background in crypto, since the service provides a dedicated manager and 24/7 tech support.

CryptoProcessing.com has a wide range of supported assets, including 20 top digital currencies and 40 fiat currencies. It also offers multiple payment options, including invoices, links, plugins,and channels to satisfy all payment needs of the business. The service is one of the lowest-priced on the market, offering fees as low as 0.8%, and by offering a large array of payment options, is incredibly convenient and user-friendly.

Corporate clients put security and legality above everything else, making CryptoProcessing.com a popular and secure choice for businesses. The company is an EU-licensed crypto payment provider which complies with the KYB and AML regulations. On top of that, the service has integrated 2 blockchain scoring systems to detect any suspicious activity and guarantee transparency for the customers.

The CoinsPaid ecosystem also offers a multi-currency crypto wallet for businesses and individuals that can be integrated and put to use in a matter of minutes, being suitable for any operations with digital currencies.

Coinbase

Coinbase is a name that you’ve likely heard of before – they operate one of the best hot wallets in the world. However, they also offer a crypto payment gateway. Much like the other contenders on this list, they provide instant conversion of Bitcoin to fiat without the merchant needing to request a withdrawal. It’s also pretty cheap too – no fees are paid for the first $1,000,000 in transactions. Thereafter, a 1% settlement fee is paid on each transaction. While Coinbase’s solution is only available in a limited number of countries, it does offer a notable range of currencies to choose from.

Crypto.com

Lastly, Crypto.com also offers a cryptocurrency payment gateway as part of its merchant servicing endeavour. This is branded as ‘Pay Checkout’. Indeed, the system is one of the more tailored solutions on the list. With its premade plugins perfect for services such as Shopify, Crypto.com is more often than not the best option for e-commerce. While limited in applicability somewhat, with 0.5% settlement fees, this is an incredibly cost-effective solution. There is certainly a notable whiff of over-automation on the platform, so you do get what you pay for, but the tailored approach really pays off for certain businesses.

Summing Up

Overall, it’s clear why crypto payments are increasing in volume, despite the current state of the market. The speed, convenience, price and marketability when it comes to crypto payments makes it a fantastic choice for merchants looking to not only hop on the Web3 bandwagon, but also those who are looking to increase their cross-border payments.