The cryptocurrency industry has recorded tremendous growth over the years. From Bitcoin (BTC) to Ethereum (ETH), Dogecoin (DOGE), and several others, cryptos have become a widely accepted means of exchange worldwide. However, a merchant account is inevitable when it comes to crypto processing.
In today’s article, we will be sharing with you the steps you need to take to get a merchant account for your high-risk cryptocurrency business.What is Cryptocurrency?
Cryptocurrency or Crypto is a digital or virtual form of currency that can be used as a medium of exchange, just like traditional currencies. However, the difference between both forms of currencies is that, unlike traditional currency, cryptocurrency isn’t controlled by a central body. Instead, verification and records are handled by a decentralized system using cryptography – a system based on blockchain technology.
Bitcoin (BTC) is the most transacted cryptocurrency across the globe. The entire blockchain market is poised to go up to $23.3 billion by 2023.Why is Cryptocurrency Defined as High-Risk?
The primary reason the cryptocurrency business is considered high-risk is because of its decentralization. Since there is no central control of what happens in the market, many financial institutions desist from doing business with cryptocurrency companies.
Another reason is the volatility of the market. External factors influence virtually everything that goes on in the cryptocurrency world, which further affects the prices. Therefore, a fluctuation in the market sentiment can result in a sudden change in prices.
Similarly, because of anonymity (there are no individual profiles linked directly to accounts), cryptocurrency is considered an easy money laundering and fraud channel. As a matter of fact, in 2020, US exchanges reportedly sent $41.2 million worth of bitcoin to criminals.Things Merchants Should Consider When Getting a Merchant Account
All merchant accounts are not created equal, hence, as a business owner, you must understand your business demands in terms of technology and support in order to decide which payment provider to work with. Significant factors to consider before opting for a merchant account include:
- Business Size
The size of your business and the volume of card transactions done really matter in determining the kind of merchant account you should get. There are different payment processors for small businesses and enterprise-level businesses.
- Account Costs
There are no free merchant accounts, so another critical factor to consider is the cost of acquiring a merchant account and its subsequent maintenance fees. Note that cheap doesn’t mean effective when it comes to payment processors.
- Processing Rates and Fees
There is an expected percentage of each transaction that goes to the merchant account provider for processing your transactions. Therefore, these additional rates and fees should be put into consideration when choosing a crypto payment provider.Final Thoughts
Getting a cryptocurrency merchant account is somewhat tricky – especially when it comes to understanding which one best suits your business type and the payment rates charged by payment processing companies. Also, as a high-risk business, available options are limited when it comes to account approval for a credit card to bitcoin payment gateway by some highly-rated processing institutions. At the same time, others will charge you rates higher than the industry average.
PurePay will help you do due diligence in understanding your cryptocurrency business model and making the right payment choice that will enhance it. We will do the homework and get you the best terms in the industry. Click here to get started with getting your cryptocurrency merchant account.