Receiving Bitcoin and Cryptocurrency Payments Online

The flexibility of cryptocurrencies are astounding and the multitude of options is truly amazing. It's remarkable how you can self custody them or hold them at an exchange just like you can with cash that is held in a bank or in your wallet.

To Self-Custody or Not

Self-custody is the gold standard when it comes to Bitcoin and Cryptocurrencies which is fine for the everyday private citizen or small business but for larger entities self custody introduces a great deal of risk. While multisig wallets reduce this risk by allowing multiple users to control the Bitcoin and crypto assets there are other considerations larger entities need to consider which usually have a more complicated structure and would therefore not be able to self-custody so easily.

Receiving Payments Via a 3rd Party

Currently, the most common way to receive crypto payments is through an exchange such as Coinbase, crypto.com, CoinPayments and a multitude of other service providers that essentially operate like a bank or PayPal giving you the option to forward those payments to a self-hosted wallet or sit in your accounts with them.

The biggest benefit of this approach is that you will not need to integrate payment processing for every different type of crypto asset or blockchain you want to accept assuming of course you want to accept more than one. For every different blockchain, you will need to integrate a different configuration and process but using an exchange allows you to have one single integration point for multiple cryptocurrencies.

Another drawback of this process is of course the fees which are generally low and competitive when compared with Visa and Mastercard. There also, of course, is the risk of hacks these exchanges are exposed to and while some have insurance there is also a limit and things can get quite messy. However, with the more established exchanges, this is still a low risk.

Receiving Payments Direct To Your Wallet

Traditional Solution

This is very similar to how payments are currently made with the real difference being the replacement of the traditional payment gateway such as Paypal, MasterCard and Visa with a wallet address. By displaying your wallet address, the customer can then transfer funds to your wallet from theirs. Your website would then need to have some sort of trigger to confirm payment and display that to your customer.

Web3 Solution

This is where the power of Web3 really shines. A web3 application connects with your customer's wallet from where they can make payments. You could then decide how to manage that payment and this leads us to smart contracts which provide an infinite way of interacting with customers, funds, 3rd parties and much much more.

A scenario of this implementation would look like this

• Your products and services are available to customers on your web application
• Customer selects what product or service they want to pay for and they will connect their wallet and confirm the transaction where they will also be notified of transaction fees which typically depend on how busy the blockchain is although Proof Of Stake chains are usually cheaper.
• Once the customer has accepted the payment the funds leave their wallet and you could programmatically connect to an exchange to then convert it to any other crypto you would rather have before depositing it into your wallet.  

Whether it's the traditional solution or the Web3 solution it could take a long time for transactions to get confirmed depending on network congestion. Although they usually take seconds.

Conclusion

We have covered a few ways you could receive payments from customers using cryptocurrencies. The space is evolving very quickly and will be very unrecognisable in a few years to come but whatever the case cryptocurrencies are here to stay and becoming more and more prevalent as the financial landscape evolves and technology disrupts the status quo as usual.