It’s undeniable that cryptocurrency is rapidly becoming a part of finance. Some people even believe that it is the future of finance. They are not wrong since many businesses, including mainstream companies like Microsoft, have begun accepting cryptocurrency as a payment method.
If you’re looking to jump into the bandwagon and accept one of the many cryptocurrencies as a form of payment for your products or services, you’ll need a cryptocurrency merchant account.
Read on to learn everything there is to know about opening a cryptocurrency merchant account.
What Are the Benefits of Cryptocurrency Merchant Accounts?
Before getting a cryptocurrency merchant account, it’s only normal to want to know what it has to offer. Here are several benefits of cryptocurrency merchant accounts.
It’s Almost Impossible to File a Chargeback with Cryptocurrency
One of the main advantages of cryptocurrency as a payment method is that it’s almost impossible for customers to file a chargeback. Once a client makes a transaction with cryptocurrency, it immediately goes to the Blockchain. This makes it impossible for them to file for a chargeback, saving the merchant time and money.
Opens Doors to the Global Market
Another benefit of cryptocurrency is that it enables business owners to get customers from across the globe. Unlike other forms of payment, cryptocurrency isn’t bound by exchange or interest rates. This makes it an ideal payment method for people across the world.
So, a business that accepts cryptocurrency as one of its methods of payment is more likely to attract international customers.
Since cryptocurrency allows companies to conduct business with international customers, they are more likely to experience an increase in their sales. Besides, more people are embracing cryptocurrency. Therefore, they are more likely to choose businesses that accept cryptocurrency as a payment method.
Crypto has a different payment processing procedure compared to other payment methods. With crypto, businesses can have their payments transferred to their wallets/accounts quickly.
CMAs Are Automatically Classified As High-Risk Merchant Accounts
Typically, cryptocurrency merchant accounts are considered high-risk merchants. Unlike other high-risk merchants like online dating and gambling, which have factors like high chargeback rates that make them high-risk, cryptocurrency merchant accounts have different factors that make them high-risk.
Here’s why a cryptocurrency merchant account is deemed high-risk.
Cryptocurrency Is Still in Its Infancy Stages
The cryptocurrency industry dates back to approximately 2009, so it’s still in its infancy. Because of this, most payment processing companies and acquiring banks haven’t fully grasped the knowledge of cryptocurrency. So, it’s still not clear how stable this method of payment is, making a cryptocurrency merchant account high-risk.
Cryptocurrency’s High Volatility
Another reason a cryptocurrency merchant account is considered high-risk is cryptocurrency’s high volatility. Regardless of a cryptocurrency’s value, there will still be a significant dip in its value. This makes a cryptocurrency merchant account high-risk.
A good example is Bitcoin. This cryptocurrency has significantly increased its value over the years but would still drop by thousands of dollars quickly.
Cryptocurrency money laundering is a major concern for banks and payment processing companies. Cryptocurrency exchanges have become a new way for fraudsters to engage in money laundering. And the worst thing is most of these cases are often undetected.
Cryptocurrency Is Classified As a Card-Not-Present (CNP) Transaction
When a customer pays with cryptocurrency, a card is usually not present, making it a card-not-present transaction, which is common in high-risk merchants. One of the main disadvantages of CNP transactions is that business owners experience a high number of chargebacks, most of which are cases of friendly fraud.
What Does One Need When Applying for a Crypto Merchant Account?
There are a set of requirements one needs when applying for a cryptocurrency merchant account. Among them include personal and business credit history, a certificate of incorporation, a fully secure and compliant website, proof of bank accounts, and payment processing history, to name a few.
How to Choose the Best Crypto Merchant Account Prvider
Research is vital when choosing a cryptocurrency merchant payment processing and merchant account service provider. It’s advisable for business owners not to select the first provider they come across. Instead, they should research, enabling them to choose a provider that offers what they need. It’s also recommendable that merchants compare different providers, see what each one offers, and then decide which one is ideal for them.
There’s no denying that the cryptocurrency industry is rapidly growing. More and more businesses are dipping their toes into cryptocurrency each day. However, it’s essential to consider all the possible factors before applying for a cryptocurrency merchant account.