[Checklist] Cryptocurrency Payment Gateways: How To Choose the Right Solution?

Are you searching for the best cryptocurrency payment gateway to accept Bitcoin on your website? This article provides a checklist with all factors to consider when choosing a crypto payment solution and is divided into the following sections:

• Checkout Page
• Payment Features
• Merchant Account
• Taxation & Financial Reporting
• Technical Integration
• Costs & Fees
• Company

Offering a crypto payment method in the shopping cart checkout process will be one of the major tasks to do in 2022 for those who haven't implemented one yet. As the trend of adoption of mainstream cryptocurrencies like Bitcoin, Ethereum or Stellar continues to grow and new currencies and stablecoins continue to appear, holders and owners of digital currencies are looking for real-world use cases and ways to spend them. Obviously, buying the next pair of shoes or paying the annual membership fee of your favourite IDE with Bitcoins is one of them.

But how to go ahead and decide on the right crypto payment processor for your business? There are quite a number of crypto payment solution providers available on the market and identifying the best fit for your business needs is:

• Not easy, especially if the experience and know-how for payments in general and cryptocurrencies in particular is not available in the company and
• Very crucial, as you don't want to switch your chosen solution that is tied into your financial processes again later-on.

So, here comes a little help in form of a checklist with features that your favourite payment solution should include. Create a shortlist with leading cryptocurrency payment processors like e.g. BitPay, COINQVEST or CoinBase Commerce and compare the functionality one-by-one. A good comparison site is crypto-payment-gateways.com.

CHECKLIST for choosing the right crypto payment solution for you business: 

Checkout Page:

 This is where the customer pays, therefore it's the most important and critical element to look at. Usability and security are key here to reduce shopping cart abandonment.

• Usability - Is it easy to use, well designed, clearly laid out and mobile responsive?
• Trust - Is it secure and do you receive feedback like API responses about the state of the payment?
• Speed - How fast are transactions processed (including across blockchains)?
• Is it hosted or self-hosted?
• Is a white-label version available?
• Is a demo version available?

Payment Features:

 At the core of a payment gateway is a robust and scalable payment engine that has proven itself processing thousands or better millions of transactions.

• Checkout/Shop Currencies
  • [Info] The currency of the products listed on your online shop
  • Does the service provider support your shop currency? If your checkout currency is USD or EUR you are mostly on the safe side. But what about other fiat currencies like CHF, SGD or ARS

• Billing/Payment Currencies
  • [Info] The cryptocurrencies that the customer can use to pay
  • How many cryptocurrencies do you need to offer? Obviously the most important ones like Bitcoin, Ethereum, Litecoin, Stellar Lumens, etc. But do you really need a list of 50 or more cryptocurrencies for the client to choose from? User experience and shopping cart abandonment rates are key here and research shows that payments are almost exclusively made in a few most common cryptocurrencies. 

• Settlement Currencies
  • [Info] The currency the merchant wants to receive. Mostly it is the same as the shop currency, but can also differ. For example, products are sold in ARS but the merchant wants to receive USD.
  • Why is this important? Because as a merchant you most likely don't want to hold Bitcoin or Ethereum and be subject to high volatility rates. If your accounting is in USD, you want to receive USD even if you customer pays in Bitcoin.
  • What settlement currencies are available?
  • Do payments get auto-converted into your settlement currency of choice (crypto or fiat)?

• Fund Withdrawal
  • [Info] The process how to send funds from your merchant account to your bank account.
  • Integration with national payment rails like SEPA for Europe or ACH for United States available?
  • Does the solution provide direct withdrawal to bank accounts for fiat currencies? Or do you need to route your funds through a crypto exchange?
  • How long does it take until funds end up in your bank account?
  • Are incoming payments available for withdrawal right away or does the provider withhold them a certain time?

• Swaps
  • Can you swap between crypto and fiat currencies directly in your merchant account?

• Deposits
  • Can you deposit funds into your account to distribute them and make payments to e.g. pay bills, suppliers or staff?

• Refunds
  • Can payments be refunded and at what cost?

• Payment Exception Handling
  • [Info] Unlike credit card payments that are pulled by the merchant, crypto payments are pushed by the payer. This can lead to errors. The sender can make mistakes like sending too little, too much, too late or send a payment twice. These variations must be detected automatically.
  • Does the service provider handle underpayments, overpayments, delayed and repeated payments and notify you and the sender about it to take actions (like making a second payment if the first payment was not enough)?
  • Can you auto-accept payments that slightly differ from the payment amount? For example, if the payment you receive is 2% lower than the original payment amount, do you still want to accept it? Some payment providers offer the possibilitiy to set a thresold which makes payment handling much easier.

Merchant Account:

 The merchant account is the user interface for your interaction with the payment service provider. This is where you manage incoming payments, payment exceptions, refunds, swaps, withdrawals, customer data, etc.

• Manage multiple fiat & cryptocurrencies in one account
  • Can you manage multiple currencies in one single merchant account or do you need one merchant account per currency?

• Request payments in multiple currencies
  • Can you switch between currencies to request payments from clients?

• Withdraw to bank account
  • Can you withdraw your accrued funds to bank accounts and crypto wallets in various currencies?

Financials & Reporting:

 Accepting crypto payments in a transparent and tax compliant way and to keep clean accounting ledgers requires payment data to be integrated into your company's financial processes.

• Transparency
  • Is the payment connected with customer and order data?
  • Are the sender and recipient of the financial transaction available?

• Financial reports
  • Can accountants access reports like sales per month/year/customer/currency, etc.
  • Are real-time balances and monthly/yearly balances provided?

• Data exports
  • Are data exports available for use in other financial and accounting systems?

• Invoicing
  • Does the solution provide an invoice for each payment?

Technical Integration:

 There are several ways to integrate a cryptocurrency payment gateway into your website, and it depends on the technical setup of your application, for example,  if you use a content management system (CMS),  a shopping cart solution or prefer direct integration via REST API.

• REST API
  • Is it a state of the art, scalable and for enterprise level designed API?
  • Is a detailed API documentation available?
  • Are API logs available for easy debugging?

• SDKs
  • Is an SDK for your programming language offered?

• Plugins
  • Is a plugin for you CMS or shopping cart system available?

• Hosting of the Checkout Pages
  • [Info] Hosted checkout pages are designed by and located on the server of the payment company vs self-hosted checkout pages are located on the servers of your company and can be white-labeled, i.e. designed in your branded look-and-feel. 
  • Does the provider offer hosted checkout pages?
  • Is it possible to self-host / white-label the checkout pages?

• Testing
  • Is a test environment or sandbox offered?

• Blockchain
  • [Info] Does the service provider build on one specific blockchain and use assets that are issued on this blockchain? An example for this would be the Stellar blockchain where BTC, ETH, USDC, etc. are available as tokens on the Stellar Network. Or does the crypto payment processor integrate with each blockchain like Bitcoin or Ethereum proprietarily? Why does it matter? Think about if new cryptocurrencies become popular, how easy and fast can they be offered by the payment gateway as a payment option? Or if you want to expand your business to new markets, is the fiat currency and integration into the target market's banking rails already available?
  • Single blockchain integration?
  • Proprietary integration with each blockchain?

Cost & Fees:

• Setup Costs
  • Is a one-time setup fee charged?

• Maintenance Costs
  • Do you have to pay monthly or yearly fees?

• Transaction Fees
  • How high is the fee per transaction?

Company:

• Customer Service
  • How responsive and competent is the service provider to your inquiries?

• Compliance
  • Does the payment service provider follow required KYC and AML requirements for customer accounts?
  • Does the crypto payment gateway have the required operating licenses?
  • Which financial regulator supervises the payment provider?

• Transaction Volume
  • How many cryptocurrency payments does the payment service process per year?

Conclusion:

This checklist gives you a pretty comprehensive set of features that you should look at when you compare crypto payment service providers.