For businesses, figuring out how to set up cryptocurrency payments can feel complicated. You have to integrate each cryptocurrency into your checkout process, figure out how to price products, auto-convert payments, and ensure a seamless process for your customers. On top of that, regulatory requirements vary by country.
Once you decide on the best cryptocurrency options for your business, you don’t have to replace your existing payment stack. Instead, you need to figure out how to integrate your cryptocurrency list into your current payment technology.
To learn about the most popular cryptocurrencies and what to expect in your payment process, read on.
TL;DR
- The types of cryptocurrencies you might use in your business fall into a few separate categories. You’ll typically get to choose from store-of-value coins, smart contract platforms, community coins, remittance-focused networks, stablecoins, and privacy coins.
- Each type of cryptocurrency coin, network, or platform offers different benefits, risks, fees, and settlement speeds.
- Store-of-value coins, such as Bitcoin, are a popular addition to the checkout process because customers already have them in their digital wallets.
- Stablecoins are generally pegged to the United States dollar or euro, which ensures less volatility. It also means you don’t have to adjust the prices of your products based on the customer’s currency selection.
- Meme coins are less useful as investments or payment options, but they have a niche following among certain communities. Because of this, some companies use them to market to specific client bases.
- Cryptocurrency payments and traditional payment processing often connect after the cryptocurrency payment has been made. The payment is then converted into the merchant’s domestic currency and deposited into their account.
- To decide if accepting cryptocurrency is right for your business, you must consider the volatility, fees, technical requirements, accounting updates, customer demand, need for liquidity, tools, and regulations involved.
PayCompass can support your payment processing needs through multi-currency pricing, specialized underwriting, localized checkout, and other key tools.
What Are the Most Popular Types of Cryptocurrency Coins Used by Businesses?
From store-of-value to privacy coins, there are a few typical ways that cryptocurrency is used by merchants and businesses. By understanding how these real-world payments function, you can decide which option makes the most sense for your payment processes.
Store-of-Value
Some of the most popular cryptocurrencies are used to store value. This is similar to the way that people invest in gold or stocks to retain value over time. Bitcoin is one of the most common examples of this type of coin. When someone uses store-of-value currencies at checkout, it is typically because they already have an account that holds that particular cryptocurrency. For day-to-day transactions in Bitcoin, companies will typically use a platform like Lightning to complete the purchase.
Stablecoins
Stablecoins are designed to track the United States dollar or the euro. This type of setup is ideal for payment processing because you can just price your products in dollars or euros. No mental conversions are required. They also don’t experience the price volatility that other cryptocurrencies do. Because of this, stablecoins are popular for cross-border commerce and business-to-business (B2B) invoices.
Smart Contract Platforms
A smart contract platform uses blockchain technology to run the app or platform. Ethereum, Solana, and other cryptocurrencies can be used to make purchases through the platform. For merchants, picking the right platform is essential to minimizing fees and ensuring a good customer experience.
Often, smart contract platforms will have their own native currency. For example, Cardano uses ADA.
Community Coins
Community coins are a unique part of the cryptocurrency list. Unlike store-of-value coins, they are more of a branding or marketing tool. These spend-for-fun coins are often purchased because customers feel a connection to them or think they’re fun. While Dogecoin is the leading example of community coins, Shiba Inu, Pepe, Bonk, and Floki are also common options.
Because they have niche appeal, merchants primarily accept these coins for marketing or branding reasons. Alternatively, some merchants use community coins because their customer base consists of avid users.
Remittance-Focused Networks
This type of cryptocurrency is ideal for large currency transfers, especially across borders. Stellar (XLM) and XRP are two common examples of remittance-focused platforms and protocols. These types of platforms are predominantly used for remittances and large transfers. They are generally not used for day-to-day purchases.
Privacy-Focused Coins
Monero and similar coins are designed to ensure the maximum amount of privacy. Because of the compliance requirements and risks involved, these cryptocurrencies are rarely handled by mainstream payment processors. For most merchant accounts, privacy-focused coins are simply not worth the hassle.
How Real-World Payments and Cryptocurrencies Interact
While card payments and cryptocurrencies occur in different ways, there are still interaction points where they connect. Typically, cryptocurrencies are involved in the payment rail and the money being transferred. However, card networks and fiat banking are where the company’s cash flow actually resides.
With normal card payments, the payment is authorized, captured, and settled in a process that involves the merchant, issuer, acquirer, card network, and customer. In comparison, many crypto payments simply involve the customer pushing a button to make the payment. Then, the payment is sent to the company’s account.
In a typical transaction, the customer pays in crypto, but the transaction is settled in fiat.
- The customer receives a quote that is typically priced in United States dollars.
- The merchant accepts the cryptocurrency through their blockchain ledger.
- The payment is converted to government-issued, fiat currency. In many cases, the conversion happens automatically.
- The payment is deposited in the merchant’s account.
It’s important to note that cryptocurrencies can be sent through multiple platforms and networks. Just like real-world currencies, the fees, confirmation time, and fraud prevention tools can all vary based on which platform you decide to use.
Top 10 Cryptocurrencies for Merchants and How They’re Used
Whether you need to accept payment for digital goods or want to attract a specific customer base, the following top 10 cryptocurrencies are popular among merchants and consumers. To determine which one is the best cryptocurrency for your needs, consider what the cryptocurrency is, how it is used for payments, and any other unique factors.
| Cryptocurrency | What Is It? | How Is It Used for Payments? | Notes About Payment Processing and Merchant Accounts |
| Bitcoin (BTC) | It essentially functions as digital gold. Bitcoin is famous for being the first and most widely adopted cryptocurrency. | Customers pay using digital wallets. For fast, small payments, the Lightning Network is generally used. | During congestion periods, transferring Bitcoin can be slow. Additionally, many merchants automatically convert Bitcoin because of how volatile it is. It is best used for high-ticket goods and international customers. |
| Ethereum (ETH) | This open-source blockchain platform features smart contracts and decentralized applications. | While it is sometimes used for payments, it is more commonly a base rail for the tokens and stablecoins that are actually used in the checkout process. | Stablecoins on alternative networks tend to have lower fees than ETH on the Ethereum network. Pricing buffers and auto-conversion are recommended. This option works best for selling digital goods and working with customers who already have Ethereum. |
| Tether (USDT) | Tether is a stablecoin that is pegged to the United States dollar. | This coin is popular among customers who want to avoid volatility while making international purchases. | Network fees can vary significantly, so merchants should be proactive about researching their options. Tether is popular for high-value transactions, international payments, and B2B invoices where customers want the stability of the United States dollar. |
| USD Coin (USDC) | This stablecoin is also pegged to the United States dollar. | It is used for customers and merchants who want a crypto rail with stable pricing. | This is one of the most stable ways to accept cryptocurrency payments. For best results, merchants should review the payment platform’s refund and chargeback policies. USDC is a popular option for international invoices and subscription payments. |
| XRP (XRP) | XRP is a common option when liquidity is a concern. | It is an effective choice for fast, international payments. Typically, XRP is used for cross-border transactions. | This option is effective if you operate internationally. However, most merchants still auto-convert XRP payments right away to avoid volatile price fluctuations. |
| Binance Coin (BNB) | Binance Coin uses the Binance ecosystem. This is a volatile coin that fluctuates in value with changing market demand. | BNB is primarily used by customers who already have BNB and is available with several crypto payment platforms. | Acceptance can vary significantly from provider to provider. It is more common in web3 communities, gaming, and NFT purchases. |
| Cardano (ADA) | It is a smart contract platform. The native currency, ADA, is the one used by the platform. | ADA is used significantly less than other options on this list, but some customers may ask for it. | The hardest part about using Cardano is finding a provider that can support it. Because of this, it only makes sense to offer Cardano payments if you already have customers asking for the option. |
| Solana (SOL) | Solana is a cryptocurrency that is known for its fast, efficient transaction times. | Some platforms allow Solana to be used for merchant checkout. It’s known as a fast, low-cost way to receive payments. | It is ideal for crypto-native transactions. Thanks to its speed and efficiency, Solana is growing quickly in popularity. |
| TRON (TRX) | TRON is a popular transfer rail. It features a smart contract network that is useful for digital payments. | While it is an effective payment option, TRON is less popular than many available stablecoins. | Although there are more popular options, some merchants and customers opt for TRON because of the low fees and fast confirmations it offers. |
| Dogecoin (DOGE) | Dogecoin is a memecoin that has a committed community of users. | People use Dogecoin because they like its image. It is not known for stability, low fees, or any other normal advantages. | Merchants primarily use Dogecoin for the marketing win and because certain customer demographics like it. However, it is more volatile because of its inflationary supply, which means it doesn’t have a fixed maximum supply. |
Which Cryptocurrencies Are the Most Popular With Customers?
Looking at the top 10 cryptocurrencies by market cap will give you a good idea about the benefits and drawbacks of each option. It’s also essential to offer crypto payments that are widely used and accepted. The following cryptocurrency list includes the largest cryptocurrencies, according to their market cap at the time of writing. However, it’s also important to note that some cryptocurrencies, like Ethereum, Dogecoin, and Monero, don’t have a hard supply limit.
- Bitcoin: $1.91 trillion
- Ethereum: $398.27 billion
- Tether: $186.81 billion
- BNB: $127.1 billion
- XRP: $125.97 billion
- Solana: $80.48 billion
- USDC: $75.51 billion
- Lido Staked Ether: $29.47 billion
- TRON: $29.08 billion
- Dogecoin: $23.66 billion
What To Consider Before Accepting Cryptocurrencies
To find the best cryptocurrency options and payment methods for your business, there are a few factors you should think about.
- Volatility: Cryptocurrencies are notoriously volatile, especially when compared to fiat currencies. If you are risk-averse, a stablecoin may be the best option. If you don’t use stablecoins, it is a good idea to auto-convert transactions so that the cryptocurrency’s value doesn’t have a chance to fluctuate.
- Local and International Regulations: Know-your-customer (KYC) requirements, anti-money laundering (AML) rules, and other regulations play a role in determining which cryptocurrencies you and your payment processor can use in different areas.
- Operational Capabilities: You also need to review hosted checkout options, payment gateways, invoices, point-of-sale (POS) systems, and other tools to make sure you can support cryptocurrency-based transactions.
- Liquidity: If your cash flow is locked up in cryptocurrencies, it could lead to liquidity issues. However, you may be able to mitigate some liquidity concerns by using auto-convert to immediately transfer cryptocurrency into your domestic currency.
- Customer Demand: When choosing the right cryptocurrency, consider the customer demand for each type. Major cryptocurrencies, like Bitcoin and Ethereum, are popular choices. However, meme coins and lesser-known cryptocurrencies appeal to specific customer demographics.
- Technical Choices: Once you select the cryptocurrencies you want to accept, you’ll also need to consider the rails, payment gateway, wallet compatibility, and other technical factors involved.
- Accounting Requirements: Your accounting systems must accommodate the new payment method. For example, you’ll have to determine how to record transaction values that are priced in USD and paid in cryptocurrency. Similarly, adopting cryptocurrency as a payment method can make reconciliation and taxes more complicated.
- Fees: Finally, you’ll need to consider the fees charged by the processor and the network. You will typically have to pay a foreign exchange spread, cross-border fees, and currency conversion fees.
How PayCompass Supports International Businesses
PayCompass supports businesses’ multi-currency, global payment solutions by ensuring secure payment gateways, localized checkout, and robust payment processing. Once you sell to customers in a target market, we can help you accept and process payments through our range of currency conversion options, pricing support, and settlement options.
Cross-border payments have unique regulatory requirements involved, so you need a payment partner that understands your needs. Once you find the right cryptocurrency platform for your stack, we can help you integrate it with the rest of your payment processing tools. From reducing foreign exchange friction to ensuring the best underwriting alignment, we make sure your company is ready to succeed on a global stage.
Final Thoughts
Whether you want alternative payment options or have already created a cryptocurrency list, our team of payment experts can help. For global businesses, cryptocurrencies are an increasingly popular way to accept payment. Many companies use crypto acceptance as a part of their marketing and branding efforts.
By reviewing the most popular cryptocurrencies, you can determine which ones make the most sense for your company. Each one carries different risks, fees, and processing speeds. While stablecoins are known for their price stability, many cryptocurrencies experience more volatility. Choosing the right coin, adopting auto-convert measures, and finding a secure digital wallet can help ensure a safe, steady cash flow at your company.
To learn more about the best cryptocurrency options for your business and how to integrate them into your payment processing systems, reach out to the experienced payment experts at PayCompass today.
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