How to Streamline eCommerce Global Payments with Crypto?

We live in a world where we can get groceries delivered to our doorsteps in minutes, but transferring money to another country can take weeks or months. Because even today, we are using legacy systems for transferring money. International bank transfers are not just time-consuming but also cost more and are unreliable.

It’s time to leave behind traditional payment systems and embrace cryptocurrencies. You can transfer millions of dollars to any part of the world almost instantly via Blockchain — the technology that powers crypto transactions. Virtual currencies circumvent all the existing challenges with traditional payment methods and can help merchants streamline global transfers.

In this blog, we will understand how cross-border payments work, the challenges associated with them, and how merchants can streamline global payments with crypto.

Eliminate currency conversion

If you transact via traditional payment methods, currency conversion can erode a significant chunk of your payment. Conversion rates are not as straightforward as other charges. Credit card companies and banks often impose foreign transaction fees on top of conversion and processing charges — making transactions expensive and complex.

On the other hand, crypto payments are simple and straightforward. There are no exchange fees whatsoever. You can send and receive crypto payments from anywhere around the world without any conversion or foreign transaction fees.

No intermediaries

Traditional payment gateways route money through several intermediaries before it reaches your account. A single transaction can include four or more payment bodies: first, it’s the issuing bank, payment processor, receiving bank, credit card companies, and the customer themselves. When so many entities are involved in a single transaction, the chances of something going wrong multiply.

Cryptocurrencies can solve this. All the payments made via crypto are direct and peer-to-peer. There are no intermediaries involved in cross-border payments, making them faster, more efficient, and dictatorship-free. No one can freeze your funds or reverse a transaction at any point. This makes cryptocurrencies ideal for international transfers.

Lowest transaction fees

Credit card companies charge a foreign transaction fee of up to 3% on top of existing payment processing charges for every international payment. Banks, too, have unreasonably high exchange rates, making foreign transactions expensive and unfavorable. A Remittance Prices Worldwide report reveals the global average cost for sending remittances was 6.30% in 2021. A few methods can even cost up to 10% of your transaction value. This means if your monthly volume is $4412, which is the average revenue for all sole proprietorship eCommerce businesses in the U.S., you will be paying almost $500 in transaction fees.

However, when you transact in cryptocurrencies, all you pay is a network fee — which is a tiny fraction of your payment. The average transaction fee for transferring Bitcoins (a leading cryptocurrency) is 0.000044 BTC, or $0.957.

In 2021, a transaction worth $2 billion was processed for a fee of only 0.00001713 BTC. That’s just $0.78.

If you had to receive $2 billion via credit cards or banks, it would cost you 200 million dollars, not to mention the weeks of processing time, regulatory limitations, and other concerns influencing your transaction.

Enhanced security and transparency

According to a report from Boston Consulting Group, financial firms are 300 times more likely than other firms to experience cyberattacks. In 2015, the Carbanak cyber gang stole $1bn from 100 financial institutions worldwide — making it one of the biggest financial cyberattacks of the century. Bottom line: banks are not the safest place to keep our money.

On the flip side, cryptocurrency offers higher security and transparency for international transactions. All the payments are secured by cryptography. Meaning they cannot be tempered or reversed without the owner’s authorization. What’s more, all the payments are also recorded on Blockchain — a publicly distributed ledger that’s shared across everyone on the network. Thus, you can trace all the transactions to their origin — making payments transparent and safe for everyone.

Instant transfers

Transfers made via traditional payment gateways can take days or weeks to settle. That’s primarily because there are several intermediaries involved in a single transaction. If any one of the intermediaries ‘feel’ the transaction is unauthorized or has other security concerns, they will reject the payment. This is frustrating for companies as it hampers their cash flow and overall revenues.

Crypto transactions are instant and irrevocable. You can transfer any amount of money anywhere in the world in a matter of minutes. It can achieve this speed by eliminating all the middlemen from a transaction. This means you can send and receive money 365 days a year. Your payments won’t be halted due to bank holidays or delays caused by third parties.

Seamless and efficient cross-border payments

Crypto’s efficiency and wide accessibility make international transfers seamless and flexible. Businesses can send and receive payments in multiple currencies, such as Bitcoin, Tether, Ethereum, or even stablecoins, without having to go through complex bank procedures.

That’s not all. Crypto also facilitates micro-transactions — unlike other financial institutions. Bitcoin, a leading cryptocurrency, supports payments as small as 1 satoshi (nearly equivalent to $0.000262). Enabling fractional payments helps small to medium-sized businesses transact globally while reducing the risk of overpayment or underpayment.

Easy onboarding

Unlike traditional payment methods, onboarding a crypto payment gateway is relatively easy and requires minimal documentation. You can get started with a crypto payment processor in just a few clicks. All you need is a valid email address and access to the internet to get things moving.

What’s more, most platforms offer ready-made crypto payment plugins for eCommerce that allow users to enable crypto payments into their stores in a matter of minutes. You can also use developer-friendly APIs to integrate the payment gateway into your platform.