Crypto Payment Processors Explained: How They Help Bridge the Fiat Gap?

Businesses today have to keep up with the rising consumer need for flexible payment options while expanding their reach and driving growth. Crypto payment processors are one such solution that’s increasingly gaining traction. Businesses can now accept cryptocurrencies such as BTC, ETH, and USDC while receiving fiat currencies (EUR/USD) into their bank account. 

In this guide, we’ll break down how crypto payment processors work and how crypto transactions convert to fiat to bridge the gap.

What are crypto payment processors? 

A crypto payment processor allows businesses to accept cryptocurrency payments, such as BTC, ETH, or USDC. Similar to traditional payment processors, the crypto payment processor converts crypto to fiat and deposits the funds into the business’ bank account. This way businesses can expand their payment options without handling crypto themselves. 

How payment processors convert crypto to fiat?

Step 1: Customers initiate payments 

When customers choose their preferred cryptocurrencies as payment methods, they use a payment link or a crypto checkout option integrated via API to complete the transactions. 

Step 2: Payment gateways secure transactions 

Upon receiving the payment request, the crypto payment processor then generates a unique payment address. Customers send their cryptocurrencies to these unique addresses, and the transactions are encrypted and recorded on the blockchain, ensuring they are secure and traceable. 

Step 3: Confirming the transaction

After transactions are sent, the blockchain network verifies and confirms it. The process can take anywhere between a few seconds to a few minutes, depending on the blockchain being used. The processor also monitors the transaction. 

Step 4: Crypto to fiat exchange 

Once the transaction is confirmed, the crypto payment processor then converts the received crypto into fiat currency.

Step 5: Funds transferred to businesses’ bank accounts 

Once the cryptocurrencies are successfully converted into fiat, the payment processor then deposits the funds directly into the businesses’ bank accounts. Businesses receive the exact invoice without needing to manage crypto wallets or manually convert it. 

How businesses can benefit from crypto payment processors 

Simplified payment solution

Crypto payment processors help businesses accept crypto without any technical integration. The payment link solution allows customers to make payments within seconds. On the other hand, businesses that require more customisation can choose the API solution for a more tailored experience. 

Instant conversions

Crypto payment processors help businesses eliminate price volatility with instant crypto to fiat exchange.

Lower transaction fees

Traditional banking fees are exorbitant, especially for cross-border payments. Crypto payments allow businesses to cut down on international transaction costs. 

Global reach 

Businesses can serve a wider customer base without worrying about conversion rates and banking restrictions thanks to crypto payment solutions. 

Secured and transparent

Blockchain technology is immutable and transparent. Businesses and customers can make transactions with an added level of security that protects them from fraud and chargebacks. 

Choosing the best crypto payment processor for your business

When selecting the right crypto payment processor, there are a couple of pointers to keep in mind to ensure it meets your business needs best. 

Transaction speed: This is non-negotiable for a smooth user experience. The processor must be able to handle payments efficiently with fewer delays to ensure customer satisfaction. 

Supported currencies: Choosing a processor that supports multiple currencies provides your business with more flexibility for crypto to fiat exchange and a scope to cater to a wider audience. 

Fee structure: A reliable processor provides clear information on transaction fees to avoid discrepancies, so make sure you understand the full cost breakdown.

Mobile compatibility: Most consumers prefer to make everyday payments with their mobile phones. So, partnering with a processing company that operates smoothly on mobile devices is crucial. 

User-friendly: Having a user-friendly UI is key to reducing consumer drop-off. The more intuitive the interface, the easier it is to adopt. 

Customer support: Any processor with an unstable customer service can disrupt payment operations drastically. Choosing a reliable and accessible provider with effective support channels is a must. 

Why should you partner with a crypto payment processor?

Crypto payment processors make crypto payments more accessible. Here’s how:

One, businesses don’t need to have extensive crypto knowledge or even hold a crypto wallet. You receive the funds in your bank account and continue focusing on scaling your business operations without worrying about manual conversions. 

Two, the solution is designed in a way that clients pay the transaction fees, so that there are no added costs to your business. You will receive the exact invoiced amount every time.  

Three, a regulated and licensed processor ensures your transactions are handled with the highest standards of security and compliance. Not only that, but the processor takes care of all the onboarding and technical requirements so you can start accepting crypto payments from your clients from day one. 

Four, payments are automatically converted and processed into fiat with the requested payment description so that accounting teams can continue using their standard processes without needing any crypto knowledge. 

Five, accepting crypto payments allows businesses to tap into a growing customer base of over 700 million crypto owners and offer their products to high-net-worth and tech-advanced individuals. According to a Nasdaq research, 80% of young millionaires now own crypto. 85% of merchants accept crypto to reach new customers, and 77% cite lower transaction fees as a major advantage to accepting payments.

Crypto payments are the current norm, and it’s the fastest way to expand payment methods while providing security and access to a growing market.