Cryptocurrencies have been an enormously growing trend in the eCommerce market. They are a fast and cheap way for merchants to provide services and goods. They also have many advantages compared to credit cards and other payment methods. Online merchants can benefit from accepting digital currencies as a payment method, but to do so, they need a high-risk merchant account.
What are cryptocurrencies?
A cryptocurrency is a digital currency that uses blockchain technology to assure safe financial transactions and to manage the creation of new units of cryptocurrencies. The blockchain technology allows information to be decentralised, transparent and immutable, so it will be distributed but not copied.
You have no doubt heard of the most popular of cryptocurrencies: Bitcoin. Bitcoin are made through a process called ‘mining’. Mining is an exceptionally technological process whereby complex mathematical problems are solved mechanically with computers. Fragments of bitcoin are generated as the problem gets solved.
Statistics show that at the end of the second quarter of 2020, there was a massive 299,733 Bitcoin transactions recorded each day worldwide. The industry with the highest share of Bitcoin payments was the financial industry, which amounted to 23.3%.
Advantages of digital currencies
Fraud-proof transactions: The trading of cryptocurrency is utterly secure. Every approved transaction is safely stored in a public record to ensure authenticity. Purchases made using Bitcoin are never associated with the identity of the buyer, which makes fraudulent transactions virtually impossible. Only the owner of the currency has control over it, so banks and government institutions are not at all involved. Customers can make large or regular transactions as the currency uses an uncrackable code that ensures fraud-free transacting.
Availability: Being a decentralised currency that is not controlled by any institution, Bitcoin are accessible to everyone. The only thing needed for cryptocurrency trading is the internet, which has become a rather widespread commodity. This is why people are starting to steer towards the cryptocurrency trend rather than more traditional means of payment.
Quick and easy settlement: Thanks to blockchain technology, using cryptocurrency is a straightforward process. As mentioned above, the only necessity is the internet (and a device) and the technology is available.
With all these advantages, why is cryptocurrency considered high-risk?
The cryptocurrency market is volatile. Because there is so little concrete information about cryptocurrencies, banks tend to shy away from them. They see the currency more as an apparition than a real thing. And they aren’t wrong. Cryptocurrency is not tangible. You cannot go to a bank and draw it into cash. This makes any financial institution think twice before dealing with digital currencies. This is one of the reasons these merchants are categorised as high risk.
Cryptocurrencies exist entirely online. This means that card-not-present transactions are going to be needed, and hence, another reason to be categorised as high-risk. Cryptocurrencies are stored, sent, and received using online wallets and merchant accounts. These coins can only be used to make purchases from merchants that accept cryptocurrency. It is important to know what you are in for when choosing a Bitcoin merchant account provider, as being rejected by a bank is a definite possibility. Having a company like Octapay help you along the road to success should be an easy choice to make.
Start accepting digital currencies today
Bitcoin is an extremely useful payment method to add to your business. Because using digital currency is cheaper, and the rate of chargebacks is very low, they become an attractive way of transacting. The first step to start accepting Bitcoin as a payment method is to open a Bitcoin merchant accountthat will allow you to process payments.
Octapay specialises in Bitcoin payment processing. We provide high-quality, customised services at fair rates for high-risk businesses. Contact us today and find out more about our solutions. Our team of experts will help you through the entire application process and keep you informed the entire way through. We look forward to a profitable relationship.