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Blockchain payment solutions are gaining popularity due to the rising demand for cryptocurrency. Blockchain technology has disrupted the financial sector since its introduction, and blockchain payment solutions have since been improved, leading to the efficiency and transparency of these payment processes.
Businesses are starting to recognize the benefits of using blockchain technology to expand their operations. But how exactly do blockchain-enabled payments work, and what are the trusted payment solutions? Keep reading to learn more.
Top Blockchain Payment Solutions for 2023:
What Is Blockchain?
Blockchain is a type of database system used in storing information. It’s a digital ledger of transactions, which is duplicated and distributed across a network of computers.
In a blockchain, information is collected in groups called blocks. These blocks have specific storage capacities that are sealed and linked to previously filled blocks. This would form interlinked data called the blockchain. Every new piece of information that comes after that newly added block is combined into the block, which is then added to the chain once it’s full.
If one block in one chain is altered, it will be obvious that the block has been tampered with. Therefore, to interfere with a blockchain system, a hacker would have to alter the entire chain of blocks in all of the distributed versions of the chain.
Blocks are continuously being added to blockchains like those used by Bitcoin and Ethereum, enhancing the security of the ledger. If a Bitcoin’s transaction record is tampered with, all other blocks will cross-reference each other and instantly identify the tampered block. This system aids in creating a clear and precise sequence of events.
What Are Blockchain Payment Solutions?
Blockchain payment solutions ensure quick, secure, affordable, and transparent payment processing without the interference of a financial institution. Due to their efficiency, you don’t have to wait for money transfers to be approved or processed by a third party. This leads to more convenient international transfers, making transactions borderless.
When used in conjunction with smart contract platforms, blockchain payment solutions automate payments and can cease payments when contract agreement terms are infringed.
How Blockchain Payment Works
In the context of payment, blockchain records information pertaining to accounts (balance and transaction history). A block contains digital records of transactions that are time-stamped.
The block can’t be altered after being added, making the blockchain a series of unchangeable records. Suppose two individuals are members of a secure blockchain and hold a distributed ledger, payment can be made by adding a new transaction to the chain with the payment information. Afterward, the two parties authenticate the payment, and the entire process is completed in a few seconds.
Top Blockchain Payment Solutions
Coinbase is one of the most prominent blockchain payment solutions, with over 108 million users. It’s the ultimate cryptocurrency investment, earning, spending, and trading platform. Coinbase also provides payment processing solutions to companies that want to accept cryptocurrencies like Bitcoin as payments. You can get paid by your customers in the form of 10 popular cryptocurrencies (Bitcoin, Bitcoin Cash, DAI, Dogecoin, Ethereum, Litecoin, USD Coin, Tether USD, Shiba Inu, and ApeCoin) by using Coinbase.
Coinbase can be used as both a payment solution and a traditional exchange. It enables instant crypto-to-fiat conversion without a withdrawal request. Payments get delivered to your bank account within 2 to 3 days.
CoinsBank is popular in the blockchain industry for its user-friendly payment system. It’s free to download on your Android or iOS devices.
CoinsBank supports major fiat currencies like EUR and USD. It’s an excellent payment solution for businesses due to its fast deposit and withdrawal processing. In addition, you can use CoinsBank’s 24-hour access for transfers without extra charges. To protect your wallet, it leverages two-factor authentication and meticulous verification of your transactions and activities.
Users have better control over their money because all transactions are made at real-time market rates. If you require assistance resolving any issues, there’s a customer care system available round-the-clock to attend to you.
CoinGate is a payment solution that allows its users to make payments in Bitcoin, Ether, and 50 other cryptocurrencies. It was founded in 2014 in Vilnius, Lithuania, with a mission to raise the acceptance of cryptocurrencies globally as a dependable means of payment to meet the needs of business owners and their clients.
CoinGate allows you to receive crypto payments at real-time market prices in Euros, thereby protecting you from the volatile nature of crypto. Merchants can automate their payments at every stage, such as when creating invoices and confirming payments.
CoinGate also offers a variety of plugins (OpenCart, WordPress, and others), API, and payment buttons, which you can create for any website. The CoinGate API comes in handy for online businesses and their clients who want to accept cryptocurrencies as a payment option.
With advanced payment options that businesses can adopt, CoinGate manages all aspects of payment flow, starting from checkouts to settlements. On every transaction, CoinGate charges a 1% fee. There’s no registration fee or extra charges.
ALFAcoins is among the best payment gateways for businesses that accept cryptocurrencies as payment. It can be linked to your current payment process or website using an API, e-commerce plugin, and widgets.
It allows payment to be divided between fiat and crypto. As a result, businesses can keep a certain amount in cryptocurrency and make a profit from rising prices.
ALFAcoins charges 0.99% as a transaction but doesn’t impose any additional fee during installation and subscription. The fact that ALFAcoins is usable everywhere (except North Korea and Iran) is an added plus. It supports major fiat currencies, such as USD, EUR, and GBP.
For businesses who prefer to adjust the security level for their transactions, BitPay allows you to set transaction speeds (low, medium, and high). Its authentication feature is a fantastic addition that helps keep accounts secure.
Its whole process is designed to accommodate less tech-savvy businesses, making it a simple payment solution to set up and use. For every transaction, it charges a 1% fee. This payment solution also has a cap of $1,000 for daily transactions and $10,000 for annual transactions.
BitPay is a great option for startups and small enterprises. Note, however, that BitPay only permits direct bank deposits in 38 countries.
Ripple has developed its crypto and blockchain system for over a decade, making its services quicker, more transparent, secure, and cost-effective than regular financial ones. Solutions delivered by Ripple are utilized by users to facilitate crypto payments, engage their audiences, and generate income.
With the use of blockchain technology, Ripple promises a seamless experience for sending money internationally. Businesses, financial institutions, and governments can process their clients’ payments from anywhere by being a part of Ripple’s expanding global network.
The digital currency XRP can be used by banks and payment service providers to cut costs and penetrate emerging markets. The goal of Ripple is to create an Internet of value, where money can move just as quickly as information does today.
Circle is a financial technology company based in Boston that aims to help businesses to use crypto coins and blockchain technology for buying and selling, sending payments, and more. It has enabled businesses to make over 100 million transactions worth billions of dollars.
Circle’s payment solution features intelligent tools that businesses can use in managing fraud and decreasing the risk in their transactions. Merchants are guaranteed automated payment flows for more convenient fund operations. Furthermore, businesses can access key analytics by simply accessing the platform’s intelligent dashboard where they can monitor transactions and generate reports.
SpicePay is a blockchain payment platform that makes it simple and inexpensive to accept Bitcoin and other cryptocurrencies from anyone, anywhere in the world. One of its best features is that it allows businesses to withdraw crypto payments via PayPal and debit cards.
Dashboard tools can be used to automate merchants’ exchange preferences, and withdrawals can be made in USD, EUR, CAD, and GBP. Note that payments in Euro can take up to 24 hours to complete, which is relatively slower than some of the faster exchanges.
SpicePay allows merchants to use iframes, email invoices, plugins, buttons, and payment APIs to set up cryptocurrency payments. As a new business, you can enjoy free transactions for a limited time. Generally, SpicePay charges 1% on all transactions.
GoUrl is an excellent way to receive Bitcoin if your business does not have a bank account. It’s compatible with major Bitcoin wallets and provides a high level of anonymity. Its WordPress plugin is highly popular because of its easy integration. The plugin is also open-source and doesn’t require you to pay monthly fees.
GoUrl provides clear payment breakdowns, making order management a breeze. Payments are received within 30 seconds of being made. Keep in mind though that fees are high when compared to other payment solutions, with 1.5% on all transactions made through the site.
Stellar is a blockchain-based ledger that makes it possible for money to be saved and transferred while also handling cryptocurrency and fiat currency exchanges. The Stellar network can be used to develop banking applications, smart devices, and mobile wallets.
Some banks have begun to experiment with blockchain technology to improve the efficiency, transparency, and security of their services. Stellar is a blockchain payment solution that can assist in the development of secure and quick fintech applications, tokens, and digital assets.
Tron is a blockchain payment solution that aims to build a decentralized web. Tron lets developers use complete protocols through smart contracts on the blockchain. It can handle up to 2,000 transactions every second, which is at the same level as leading payment processors, such as PayPal.
Tron was designed with high-scale capabilities and uses the delegated proof of stake concept for enhanced blockchain security. Currently, Tron is one of the most rapidly expanding public chains.
NOWPayments is another safe and scalable blockchain payment solution. It’s an easy way for businesses to accept crypto payments and receive immediate payouts. The platform boasts of low fees but high transparency in implementing its services. Its transaction fees start at 0.4%.
NOWPayments supports more than 100 cryptocurrencies that you can convert into fiat or your preferred crypto. The system is easy to set up and integrate into your website. It also works with numerous platforms such as Shopify, WooCommerce, Magento, and more. By joining its network, you get 24/7 customer support and an account manager that can offer you personal guidance and assistance.
Mastercard intends to offer seamless digital currency solutions by making it easier to convert cryptocurrencies to fiat currencies through collaborations with companies like Paxos, Circle, and others. Partner banks and businesses will be able to process international payments more quickly and securely, thanks to this platform.
By employing smart contract rules to automate administrative activities and speed up transaction settlements, Mastercard blockchain can be utilized for clearing credit card transactions. To transfer money that has been committed on the blockchain, MasterCard’s blockchain is incorporated into the company’s payment network, which comprises thousands of financial institutions.
Corda is an advanced blockchain platform that enables institutions to interact directly with smart contracts by eliminating expensive transactions. Corda does not have its own cryptocurrencies or built-in tokens. Being a permissioned blockchain platform, it restricts access to the entire network. This improves privacy and provides granular access control to digital records.
Corda was primarily developed by the banking industry for financial purposes but is currently being used in a variety of other use cases, including supply chains, healthcare, and government agencies. As many as 60 firms and institutions have invested in Corda and used Corda as a blockchain payment solution. With Corda, cross-border payments are made more efficient and transparent.
Use Cases of Blockchain in Payment
✔️ Digital Identity Verification
With present payment systems, each transaction requires the user to authenticate their identification. Verification techniques such as video chats or repeating logins might make users feel uneasy and prolong the transaction process.
With blockchain payment systems, a person's confirmed credentials can be safely maintained in the blockchain, and because blockchain is immutable, the data's authenticity is ensured. This will reduce the time spent on digital identity verification because users will no longer have to enter their verification credentials every time they make a payment.
It will also allow users to choose who they want to share their verification credentials with. You can also upload all your documents, and the payment platform will validate them and create a digital identity for you.
✈️ Improved Cross-Border Payments
Cross-border payment is a necessary component of doing business. However, processing a cross-border payment currently takes a long time. Even without a banking channel to conduct the transactions, it can take 4 to 6 days.
Standard payment methods for cross-border transactions are secure but expensive and time-consuming. There are multiple intermediates in the system, resulting in high commission fees.
On the other hand, blockchain payment solutions are:
- Come with lower transaction fees
- Do not require third-party authorization
Some banks collaborated with different blockchain payment solutions like Ripple to develop a low-cost cross-border blockchain payment system. Several banks and businesses intend to adopt blockchain payment systems to increase the efficiency of their transactions.
💰 Peer-to-Peer Transfers
Peer-to-peer transactions are another important use case. Employing blockchain technology lets you transact with another user directly without having to go through an intermediary or an authorizing body like the government.
Although P2P transfer programs are currently available, they do not provide complete independence because they all have some type of limitation. They could, for example, only support a single geographic region or have a defined zone. In contrast, there are no limitations when it comes to blockchain-enabled payment systems.
💰 Lower Processing Fees
When it comes to payment providers, processing fees are a major concern. The burden falls on both businesses and their customers. Some of the processing fees increase annually, and the fluctuations of processing fees can be complex. As a result, it becomes difficult to monitor the processing costs and how much they will cost in the long term.
However, when using blockchain payment solutions, the middle man is removed. As a result, you will not be charged any processing costs. This drastically reduces the transaction fees paid by both businesses and consumers.
🛡️ Security Against Cybercrime
A major concern with payment systems is the rise in cybercrime. This occurs when companies fail to provide the necessary security processes. As a result, it becomes easy to hack into a system and steal money or a customer's information. With a blockchain payment system, best practices are utilized to better manage risks and attacks.
🗄️ Maximize Data Security
Blockchain payment solutions have a high level of data security. Some merchants fail to take the necessary precautions to keep their customer's data safe. For example, they neglect to prioritize card data security. However, with a blockchain payment solution, the situation can significantly change.
Blockchain provides a secure network procedure that allows merchants to store consumer information in a way that no one else will be able to access it. This can effectively reduce data security issues.
How Do You Choose a Blockchain Payment Solution for Your Company?
As a company, there are a number of factors you should consider when choosing a blockchain payment system. It’s best to carry out an in-depth analysis and ask the following questions.
What is the development status?
Do your research to confirm how active a platform's development is on GitHub or on other communities. Ensure that the platform's code has been tested several times or if it’s still under development.
What kind of blockchain does your company need?
It’s important to understand the various types of blockchain before understanding which of them best fits your use case. Choose a solution for your company based on the network it supports, such as a private, public, or hybrid blockchain network.
How popular is the payment solution?
Look out for recommendations on reputable payment solutions from the general public.
How does the platform establish consensus using the blockchain consensus protocol?
Working on the blockchain system is difficult if you do not have prior knowledge of its consensus protocol. Because there are many types of consensus algorithms, like proof of burn, proof of work, proof of capacity, and others, understanding which blockchain platform supports which consensus protocol is critical.
What level of scalability is required for your solution?
A blockchain system should be able to scale to meet your growing number of transactions and clients. You should choose a payment solution based on quality, access, user experience, and cost.
Pros and Cons of Blockchain Payment Solutions
Aside from blockchain payment solutions’ benefits that range from increased user privacy and security to lower processing fees, there are some drawbacks you should be aware of as well.
Improved accuracy by eliminating intermediaries and reducing cost
Transactions per second are low
Transactions are safe, private, and quick
Regulation varies by jurisdiction and is still uncertain
Facilitated cross-border payments
Data storage constraints
Automation with smart contracts
High competition among payment systems
Lack of reversible transactions
Alternative to banking
In the long run, leveraging blockchain technology for payments can help eliminate different issues found in traditional payment methods. Enterprises that struggle with using centralized payment systems can attest to the numerous benefits of blockchain payment gateways. As the technology matures, we can expect more and more firms to leverage it for accelerating transaction processes, lowering payment processing costs, increasing data security, and addressing potential business hazards.