Cryptocurrency Merchant Account FAQs
Traditional banks and payment service providers (PSP) generally turn down doing business with cryptocurrency merchants, who are classified under the high-risk category. That’s where cryptocurrency merchant account providers come in — to enable businesses to accept cryptocurrency as a secure, fast, and legitimate payment method.
How do cryptocurrency merchant account services work?
Cryptocurrency merchant account services providers like EU Paymentz understand the crypto industry well. If your business needs cryptocurrency payment solutions, we have the means to connect you directly with PSPs who also welcome high-risk businesses. This way, you don’t have to waste precious time obtaining a merchant account at a financial establishment that will eventually reject your application.
Cryptocurrency merchant account services work similarly with traditional ones, but with an additional feature: the ability to send or receive payments in Bitcoin and other cryptocurrencies. Once you open a cryptocurrency merchant account, it generally includes:
- Cryptocurrency payment processing/ payment gateway
- Global payouts
- Flexible license requirements
- Fraud and chargeback prevention
- API and HPP integration
- PCI DSS certificate
- 24/7 customer support
Essentially, once your business signs up for a cryptocurrency merchant account, the application programming interface (API) needed for cryptocurrency payment processing will be connected to your website. You can then start receiving cryptocurrency as payment through the various platforms and mediums offered by your merchant account services provider and their trusted partner banks and financial institutions.
The steps are as follows:
- Your customer chooses to pay for their purchase using cryptocurrency at the checkout page
- Your customer pays the amount in the exchange rate applicable at the time of the transaction
- The cryptocurrency payment service automatically converts the coins into your preferred currency (to eliminate the risk of volatility)*
- The converted funds are sent to your merchant account
- The money gets credited to your associated bank account
*You may also choose to receive the coins in your own cryptocurrency wallet instead of exchanging the digital currency for fiat ones.
It’s worth noting that during the transaction, your payment service will send the necessary details to the blockchain network for authentication and record purposes. Miners who verify and add the transactions to the blockchain will also receive a fee.
Bitcoin payments are known to have relatively lower transaction costs than standard credit card payments, generally charging a 1% settlement fee compared to the 2%-3% credit card processing services charge.
Do brick and mortar cryptocurrency merchant services exist?
Yes. Although the majority of customers don’t pay in Bitcoin yet, the trend of cryptocurrency payments expands even to physical stores.
Brick-and-mortar merchants use cryptocurrency-enabled point-of-sale (POS) terminals, which are connected to a bank account or a business wallet, to accept crypto-based payments. Customers enter the amount due and scan a QR code to pay for their purchase.
How to Obtain a Cryptocurrency Merchant Account
To apply for a cryptocurrency merchant account, contacting a provider’s representative is the first thing to do so you’ll know the requirements to submit and the rates and fees to pay.
Documents often required to open a cryptocurrency merchant account includes:
- Payment processing records
- Certificate of Incorporation
- Payment processing history, including statements with business name and information on total sales, returns, refunds, and chargebacks
- Know-your-customer (KYC) documents
- Business banking/utility/billing statements
- Local documents as per business jurisdiction
- Copy of valid IDs of the business proprietors and directors
Your website also needs the following:
- Deposit/Refund Policy
- Terms & Conditions
- Company name displayed in the footer
- Contact us button, with phone number and email
- Visa and Mastercard logos for businesses who offer debit/credit card as payment methods
Approval may take 48-72 hours, but some factors contribute to the length of approval time, such as your industry type and your payment processing and credit history.
How to find the best cryptocurrency merchant services provider for B2Bs and ICOs
As a high-risk industry, cryptocurrency-related businesses are vulnerable to high levels of fraud, chargebacks, and scams. That's why it's crucial to seek the best merchant account services provider if you're a merchant dealing with cryptocurrency, whether it's B2B or ICO (initial coin offering).
By working with the most suitable cryptocurrency merchant services provider based on your core business needs, you’ll be able to mitigate the risks of using cryptocurrency as payment or investment and obtain safe, secure, and seamless cryptocurrency payment solutions.
To find the best crypto merchant services provider, you need to:
- Calculate the costs
Fees differ between merchant account providers. While affordable rates are important to keep your business expenses at a minimum, it’s not the end-all-be-all factor in choosing the best cryptocurrency merchant services provider. Shop around first, compare the rates, then see if their core competencies are worth the price.
- Know if the provider is licensed and registered
The first step is to verify whether your cryptocurrency merchant services provider is registered and in compliance with the rules and regulations enforced by the Financial Crimes Enforcement Network (FinCEN). FinCEN’s programs include anti-money laundering, among others. By ensuring your potential business partner follows all security protocols and compliance programs, you can be assured that signing up for a cryptocurrency merchant account with them guarantees safety and security for your high-risk business.
- Check the company’s privacy protection
Cryptocurrency gets a lot of praise for its ability to allow quick, decentralized, and anonymous transactions. Talk to a representative and see what they offer in terms of privacy protection, so you’ll know if the company’s privacy practices are in accordance with your own standards.
- Determine the cryptocurrencies supported
Bitcoin is the most popular cryptocurrency, but there are plenty of other digital currencies that are also in demand. Ask if your merchant account services provider supports other cryptocurrencies, such as Ethereum (ETH) and XRP. The more currencies they support, the better you can accommodate your payers’ preferences.
- Assess the quality of customer service
Digital transactions are relatively smooth, but technical issues are sometimes inevitable. Do your research by looking for reviews, if possible, so you can get a clear picture on how well the merchant account services provider handles customer concerns. It’s also worth checking how many support channels are available, and how long it takes to reach a customer support representative and resolve an issue. In the long run, speedy assistance and effective results will keep your merchant account and its related services always up and running for your business needs.
At EU Paymentz, we know exactly what it means to work in a high-risk industry. That’s why we specialize in providing merchant services for high-risk merchants, including businesses dealing with gaming, Forex, and cryptocurrency. We want to make payment processing secure and seamless so your business can grow and succeed. Talk to us to learn more.