How to solve a volatility problem in crypto payments?
Cryptocurrency is actively making its way into a digital payment system. No longer it is merely the asset of investment. Crypto owners and the tech-savvy population are enthusiastic about using cryptocurrencies to make payments. Accepting crypto payments to your ECommerce stores has ample benefits and will help you penetrate into a deeper market region. You might be using a personal cryptocurrency wallet, cryptocurrency exchange, or cryptocurrency payment gateway to accept crypto payments in your store. Besides, you might have already experienced and seen the positive benefits of accepting crypto payments. However, even today, a large chunk of store owners are skeptical to integrate cryptocurrency gateway owing to the high volatility of cryptocurrencies. Through this article, we will help you solve the crypto volatility problem in crypto payments.
Why is the Crypto payment industry at a steady standstill? One of the prominent reasons holding back the ECommerce store owners from accepting crypto payments is volatility in cryptocurrency. Cryptocurrency is a decentralized money asset, and it doesn't experience stability like fiat currencies. The 10-20% increase or decrease in crypto prices every day is quite casual, while this volatility per cent has never exceeded 1% for USD and EUR in 30 days cycle. Owing to such volatile price risk changes, people are still skeptical about accepting Crypto payments.
The question that remains is, why is there a need to make space for cryptocurrency payments if current fiat payment modes are working just fine. Well, it's the lucrative benefits attached to Crypto payments that volatility issues don't seem extravagant. The benefits get an upper hand because there are solutions to address this volatility problem without risking a penny. Before we look at the solutions, let us glance at the benefits that accepting cryptocurrency payments has to offer.
- Crypto Payments are quick and secure. You can transfer cryptocurrency at a lightning speed, unlike other payment modes that take up to a week to complete.
- Cryptocurrency transactions are secure. Since there is no banking system as a middle man, the cryptocurrencies are securely transferred from one place to another. The chances of fraudulent activities reduce considerably with cryptocurrency payments.
- Transaction fees on cryptocurrency payments are surprisingly low compared to other payment modes. The low transaction fees are attractive to merchants who otherwise pay 3-5% on transactions.
- There is additional security attached to crypto payments. It is impossible to reverse a crypto payment without the merchant's consent and this reduces the chances of counterfeit currencies and frauds.
- 11% of Cryptocurrency owners have used cryptos to make and accept payments and purchase things. This proportion is expected to rise prolifically in the coming years.
- Accepting Crypto payments will attract tech-savvy customers and would give you access to an otherwise unknown market. In other words, you get to penetrate deeper and wider into the market segment by offering cryptocurrency payment modes to your customers.
Given the undeniably strong benefits, one needs to focus on making the process smooth and not avoid it.
Now, we shall discuss the two prominent ways to address the high volatility of Cryptocurrency in detail.
Bitcoin, on average, is 12.5 times more volatile than Dollar. Despite the best efforts to plunge the dollar value, it is quite stable compared to other forms of currencies and commodities. This high volatile nature of Bitcoin puts the store owners at risk who accepts Cryptocurrency payments. In order to secure the future of crypto payments, the market had to explore a non-volatile crypto solution. The first Stablecoin was introduced in 2015 to bring a new wave of change in cryptocurrency payments.
Now, stablecoins are pegged to US Dollar. They are backed by a 1:1 ratio to safeguard the holders' fund. Hence, it can be regarded as a safe digital asset. Stablecoins enjoy the benefit of cryptocurrency but at the same time offer a cushion against volatile crypto changes. Merchants accepting stablecoins as payment can interpret them as equivalent to fiat dollars. This to say, 1000 Stablecoins received can be interpreted as 1000$.
USDT and USDC are the prominent stablecoins that also happen to be amongst the top 10 cryptocurrencies by market stabilization. It leads the industry in terms of 24 hours trading volume and is the most liquid asset for you. The owners of stablecoins enjoy the store of value and it's quite easy to use and spend. As an ECommerce store owner, integrate a cryptocurrency payment gateway to your website and start accepting stablecoins as payment. You will gain a useful store of value and save yourself from the market volatility of cryptocurrency.
UniPayment is a cryptocurrency wallet that will make a safe place to store all your stablecoins and crypto tokens. Spend them easily when you wish and convert them into USD promptly. For the security of your crypto tokens, visit Unipayment.
2. Convert cryptocurrency to fiat currency in your bank account.
Many cryptocurrency payment gateway service provider offers this service. It converts the cryptocurrency into desired Fiat currency and transfers that fund instantly to a merchant account. This removes the room for volatility as the funds are converted and transferred immediately. The processing fees for converting digital currency into fiat currency vary for each service provider. However, even after consideration of processing fees, merchants find transaction fees for cryptocurrency payments much lower than regular payment modes.
With a cryptocurrency payment gateway, you get your funds secured even when the volatile changes happen in prices during the transaction. Moreover, since the cryptos are immediately converted, you don't have cryptos sitting in your wallet subject to volatile price changes. You get paid for what you sell.
Compare and checklist services offered by cryptocurrency payment gateway service providers and choose the one that suits your need.
Conclusively, stablecoins and the transfer of fiat money to a bank account will help you keep your risk quotient minimal while accepting crypto payments. The volatility of cryptocurrency is indeed a problem that hampers the growth of cryptocurrency payment solutions, but these two methods are efficient in reducing that risk to zero. Unipayment works as a crypto wallet and a point of sale. We accept multiple currencies and offer instant money transfers, which would be a perfect asset for your business. Click here to know more.