Cryptocurrency Merchant Account Services – Digital Currency Solutions

Cryptocurrencies are all the rage with Bitcoin and Ethereum leading the charge. As the market continues to expand, many major companies are starting to accept crypto. A cryptocurrency merchant account allows customers of bitcoin/crypto exchanges the ability to buy crypto with credit and debit cards.

At Corepay, we specialize in high-risk merchant accounts, and have an intricate understanding of cryptocurrencies and their importance in today’s market.

Cryptocurrencies have a secure blockchain-based technology that protects them, making it near impossible for individuals to file chargebacks on crypto transactions.

Whether you are a cryptocurrency exchange or another type of business, accepting payment forms that customers are looking to use is crucial for landing sales. Cryptocurrency merchant solutions are in this case, exactly what your business needs.

If you need hard evidence that Bitcoin and other cryptocurrencies will continue to be adopted by mainstream companies, Venmo recently announced that their 70 million users can now buy, sell, and hold Bitcoin and other cryptos.

When a major company like Venmo hops on board with cryptocurrencies, the industry notices other companies follow the lead. Having the ability to exchange and process Bitcoin and other cryptocurrencies may prove incredibly beneficial if you are a merchant.

Before getting a cryptocurrency merchant account, it is essential to note that cryptocurrencies are considered high-risk – you will need a high-risk account.

Digital currency/cryptocurrency solutions mixed with traditional merchant accounts could prove to be revolutionary for the entire merchant services industry. There is a bit of irony, in the sense that cryptocurrency’s biggest asset is also one of its biggest downfalls.

All transactions are peer to peer and final. While a money trail can be tracked, criminals are finding ways to create wallets in which they can hide and disperse funds as a way to launder their money.

If you are a cryptocurrency exchange or a company wanting to incorporate cryptos, you have come to the right place. Corepay is proud to offer our partners the following:

  • Highly competitive rates as low as blended 2.95%
  • Fast approvals (as quickly as same day)
  • No application fees
  • Zero setup fees
  • Waived annual fees

Cryptocurrency Exchange Solutions

Corepay makes doing business with licensed Bitcoin exchanges convenient for you and your customers.  Bitcoin/other cryptos are similar to cash transactions. All Bitcoin transactions are anonymous; however, purchasing bitcoins online requires personal information. 

Proper licensing for cryptocurrency exchanges are needed when applying for a crypto merchant account. An exchange license in the USA can be issued on the national level, meaning validity in the entire U.S.A. or just a state level, meaning valid in those specific states. If done at a state level, it will be based on that state’s specific guidelines and rules.

One of the main differences between these licenses is price. Exchanges wanting to do business nationwide will pay a substantial upfront fee, plus ongoing annual fees. At the local level, the cost of your license will certainly be less. If you are considering a business in more than one state, it might be more cost-efficient to get a national license.

The same logic applies to Crypto exchanges in regions such as the European Union. While licenses in some EU countries may be easier to obtain than others, fraudsters have taken advantage of this and therefore damaged the reputation of some regional licenses.

For example, exchanges licensed in Estonia became increasingly popular in the last few years, but most reputable acquirers will no longer accept these licenses. Instead, it is a good idea to explore a more mainstream license in a country such as Malta, as the requirements to obtain said license is more rigorous.

Cryptocurrency exchanges will need to know who the buyers are, and buyers will need to identify themselves before acquiring digital currency. In addition, the exchanges will have to ensure stringent KYC/AML practices to ensure compliance with all local and regional legislative mandates.

All cryptocurrency transactions are recorded in a public list which is called the blockchain. The purpose of blockchain is for security, and ensures that virtual currencies cannot be cloned/copied.

Corepay works with cryptocurrency exchanges and we can work with you a variety of ways to make sure you are getting everything that you need from a payment processing provider.

Why Are Cryptocurrency/Bitcoin Merchant Accounts Deemed High-Risk?

Applying for a cryptocurrency account will be slightly different than applying for another high-risk merchant account, such as a CBD merchant account or an online dating merchant account.

With a cryptocurrency merchant account, reputational risk isn’t as big of a factor in being labeled high-risk. Cryptocurrency doesn’t have a bad or taboo reputation; however, with crypto comes the unknown. 

A cryptocurrency account is considered high-risk for the following reasons:

  • Lack of industry knowledge
  • Pricing volatility
  • Money laundering fears
  • CNP transactions

Lack Of Cryptocurrency Knowledge

Cryptos

The cryptocurrency industry dates back to approximately 2009, making it a relatively new industry.

Because of this, most acquiring banks and payment processing companies don’t have a full grasp of what they should charge and what they can expect. Also contributing to this is the fact that digital currency differs greatly from traditional forms of payment.

The whole idea of cryptocurrency is to take power away from banks and traditional regulative authorities, thus giving individuals more control. One can easily understand how this can be troubling for banks. Time will prove to be cryptocurrency’s biggest ally, provided that it can show stability.

Cryptocurrency Volatility

Cryptocurrency is highly volatile. Even when it surges as it has been for most of 2021, there are still significant dips in its value. 

The best example of this is Bitcoin. Bitcoin has climbed from just under $30,000 to almost $60,000 in the last few months. During this surge, it often would dip by thousands of dollars overnight.

Significant drops are not only seen in Bitcoin; they are seen throughout the cryptocurrency industry. With this being said, millennials continue to lead the charge in bringing out worldwide acceptance of Bitcoin and other cryptocurrencies. With more emphasis on security, including in wallets and other electronic money institutions, and better exchangeability, consumer confident will rise. Improved trust should lead to a decrease in price volatility.

Crypto Money Laundering

Cryptocurrency money laundering is a significant concern for payment processing companies and banks. Cryptocurrency exchanges are often used as a new way to launder money.

According to a study, the United Nations estimates nearly 2 trillion dollars is laundered annually worldwide. What is concerning is that over 90% of this goes undetected making money laundering a genuine concern for cryptocurrency as we advance.

Another report states that 2.8 billion was laundered through US exchanges in 2019.

It is common to see high-risk industries used as a form of money laundering; however, it differs from how cryptocurrency is used to launder.

Should a bank or payment service provider face legal action from money laundering, this can potentially damage their reputation.

CNP Transactions

When individuals acquire cryptocurrencies, likely, the card was not present. This is known as a card not present transaction (CNP), and it is often seen in high-risk merchants.

Card not present transactions are notorious for chargebacks as it can be difficult to prove whether or not an individual meant to purchase the goods/services. Using a chargeback solution such as CB-ALERT, our partner product, can significantly reduce the number of chargebacks that result from friendly fraud.

Applying For A Cryptocurrency Merchant Account/Solutions

Applying for a cryptocurrency/Bitcoin merchant account is similar to other high-risk industry applications; however, it varies in the sense that you will need to provide anti-money laundering controls.

  • Certificate of incorporation
  • Voided check/proof of bank account(s)
  • Personal and business credit history
  • Organizational chart
  • Compliance with the anti-money laundering act
  • Six months of processing history
  • Fully secure and compliant website

When dealing with cryptocurrency, your website must be highly secure. Websites that are not secure are putting their customers at tremendous risk.

Corepay assists in the application stage by swiftly getting you approved. If accepted, we will also handle any and all of the technical implementations.

Benefits Of Cryptocurrency Merchant Accounts

Crypto benefits

There are some significant benefits to accepting Bitcoin/cryptocurrencies as forms of payment for merchants, especially cryptocurrency exchanges.

Merchants should always be conscious of accepting as many legitimate forms of payment as possible, so they are not losing potential customers/sales.

It is likely Bitcoin isn’t going anywhere; therefore, it’s in the merchant’s or individuals best interest to accept Bitcoin transactions.

The most significant advantage to accepting Bitcoin and other cryptos is that merchants can’t get hit with chargebacks. Chargebacks are one of the most costly things that merchants deal with, and they are also one of the main reasons merchants are considered high-risk.

The following are the main benefits of accepting Bitcoin for merchants:

  • No chargebacks/fraud reduction
  • Can lead to more sales
  • Global market
  • Lower business costs
  • Immediate settlement

Bitcoin can also serve businesses as an investment, if deemed to be in-line with company policy. While businesses can accept Bitcoin or other cryptos and convert it the same day to fiat currency, they are not required to.

Businesses can choose to hold onto Bitcoin for as long as they so choose to. If the value of Bitcoin increases over the amount of the payment initially received, that value will be stored until the Bitcoin is sold or the market drops.

At Corepay, we are happy to provide your business with Bitcoin merchant service solutions.

No Chargebacks With Bitcoin

Once a transaction is made with Bitcoin, it heads to the blockchain. Once it is in the blockchain, it is nearly impossible to reverse the transaction.

This process makes it impossible for someone to file a chargeback, ultimately saving the merchant time and money.

Another point is that Cryptocurrencies are digital currencies that cannot be counterfeit like cash can be.

So, what is blockchain? A blockchain, in simple terms, is a type of database. 

Unlike fiat currency such as gold or silver, the Bitcoin blockchain is used in a decentralized way, meaning no single person or group has control. Instead, all users collectively supervise. 

The main benefit of a decentralized blockchain is that they are immutable, meaning that it becomes irreversible once the data is entered. Transactions are permanently recorded and viewable to anyone at any given time.

Increased Sales

As Bitcoin proves to be more stable, more trust is instilled from merchants and banks.

When merchants have the ability to accept Bitcoin and other cryptos, they increase the likelihood of acquiring new customers. The cryptocurrency community is also highly knowledgeable when it comes to businesses/exchanges that are crypto-friendly.

This means that individuals may be more likely to shop, buy or work with your business to support the cryptocurrency community. Becoming aware of the cryptocurrency market is vital for your business, even if you don’t choose to implement crypto payments at this time.

Global Market

Cryptocurrencies can be used at an international level simply because it is not bound by exchange rates, transaction rates of foreign countries, or interest rates. An example of a company taking advantage of this is Overstock.com. 

Cryptocurrencies offer the ability to break down barriers of financing in developing nations. With solely a mobile device, an individual can access cryptocurrencies without needing a banking infrastructure.

Lower Business Cost

Fees are typically lower when it comes to cryptocurrencies, and businesses usually don’t face Bitcoin transactional fees. While fees are lower for businesses, the ever-present element of the unknown is concerning for companies as they could potentially lose out on hundreds of thousands of dollars when cryptos dip in price.

Immediate Settlement

A significant benefit of crypto is that major transactions can be made and posted in your wallet within an hour of being sent. This can be valuable in large purchases such as buying a home or a car. Once the deal is signed and payment is sent, the seller will see the transaction post in their wallet within an hour rather, than waiting for it to post.

Most Popular Cryptocurrency Exchanges

Below is a list of the most significant crypto exchange companies in the world today.

  • eToro
  • Kraken
  • Binance
  • Coinbase
  • CEX-io
  • Coinmama
  • Coinfloor
  • Xcoins
  • Foxbit
  • BITMEX

With the rapid growth of Bitcoin and other cryptos, cryptocurrency exchanges are proving to be highly profitable businesses. While it is competitive, it is important to note that it’s competitive because it can be extremely profitable.

Bitcoin Merchant Account Acquiring Banks

Bitcoin merchant accounts

Acquiring banks deem cryptocurrency merchant services to be high-risk because of the fear of the unknown. There is a dearth of knowledge about the crypto industry, and even with cryptocurrency becoming more mainstream with each passing year, it’s still proving to be volatile.

With cryptocurrencies being reasonably new, most acquiring banks simply do not understand how they should evaluate them. This makes finding cryptocurrency merchant services difficult. 

Corepay can help get you approved for cryptocurrency merchant services with our network of partner banks and provide you with highly competitive rates.

How A Cashless Society Affects Cryptocurrency Accounts

The idea that the world is moving towards a cashless society is genuine. We expect this trend to continue with not only credit/debit cards, but other alternative payment methods such as Alipay, Wechat, and Venmo.

Just the fact that a vast majority of the world’s population is becoming more accepting of non-traditional payment methods is a significant sign that cryptocurrency will continue to bloom.

Cryptocurrency Merchant Service Rates

Cryptocurrency merchant service rates depend on the services required and the strength of the application that is received. Corepay aims to provide clients with highly competitive rates and cutting-edge service.

At Corepay, we waive application, setup, and annual fees as we strive to earn your loyalty through providing top-notch cryptocurrency solutions.

Depending on the account, a reserve will also be kept to prevent chargebacks. A reserve account can be as much as a cap of 50% of approved volume/month, depending on the specific business case.

Cryptocurrency Merchant Setbacks

The most significant risk factor in accepting Bitcoin and other cryptos as a merchant is stability. Bitcoin is notoriously rising and falling in ways that are impossible to predict.

While it is clear that Bitcoin and cryptos are increasing in value as more trust and awareness is built, crypto can still be volatile.

All Bitcoin transactions are recorded in a public database. While this ensures complete transparency and is often considered a benefit of Bitcoin, if a wallet address is hacked, this is obviously catastrophic.

Companies That Accept Bitcoin As A Form Of Payment

The list is rapidly growing for companies that currently accept Bitcoin as a form of payment. As Bitcoin and other cryptos become more stable, it will be more widely accepted amongst merchants.

It is also important to note that it is still early. Each company accepts Bitcoin differently; some accept it through an exchange, while others accept Bitcoin as payment.

Until March of 2020, Starbucks only accepted Bitcoin through an exchange, but they are now accepting Bitcoin as a form of payment.

The following retailers accept Bitcoin/various cryptos as a form of payment:

  • Microsoft
  • Overstock
  • Home Depot
  • Name Cheap
  • Starbucks
  • Whole Foods
  • Newegg
  • Lolli
  • KFC Canada

Overstock accepts the most forms of cryptocurrency from the above companies and leads the charge as far as accepting cryptocurrencies goes.

As time goes on, merchants must entertain the idea of cryptocurrency solutions and payment processing.

How To Choose The Best Cryptocurrency/Bitcoin Merchant Account Solutions

Research is essential when it comes to deciding on the best cryptocurrency payment processing/merchant account solutions. This is the case with all high-risk merchant solutions; however, with cryptocurrency, it’s even more so the case.

Different payment processing providers will possess additional capabilities when it comes to Bitcoin/cryptocurrencies.

Fees will vary when looking for different cryptocurrency solutions depending on the payment service providers and their partnering banks.

Make sure that whichever payment service provider you choose specializes in high-risk accounts. At Corepay, we have over two decades of payment processing experience, with a primary focus on high-risk solutions.

Cryptocurrency Industry Overview

The cryptocurrency industry erupted in 2020. It continues to expand and grow in popularity, and there are currently over 5,500 cryptos in existence.

While there are over 5,500 cryptocurrencies, it is important to note that many do not possess any trading value or volume.

A large percentage of the value and volume comes from about 15 different cryptocurrencies, with Bitcoin leading the charge.

The cryptocurrency market value is currently over 2 trillion dollars as of April of 2021, with Bitcoin attributing to 1 trillion of that amount.

Here’s a look at the top 10 cryptocurrencies in the world today as of April of 2021.

Companies that accept cryptocurrency
  1. Bitcoin
  2. Ethereum
  3. Binance
  4. XRP
  5. Tether
  6. Cardano
  7. Dogecoin
  8. Polkadot
  9. Uniswap
  10. Litecoin

As cryptocurrencies continue to gain popularity, merchants must offer as many payment solutions as possible to potential customers.

A quick look at the rapid expansion of mobile payment services tells what cryptocurrency could lead to with reduced fraud and global market options.

Why Choose Corepay For Your Cryptocurrency Exchange Merchant Account

Corepay is dedicated to serving your business’s needs from the ground up. We understand high-risk payment solutions, the volatility, and intricacies that is cryptocurrency.

A cryptocurrency account with us will help your business achieve more sales and guarantee your company is up to date with changes in the cryptocurrency industry. As the crypto world evolves and becomes more widely accepted, having a partner such as Corepay will be vital to staying compliant and up-to-date in the industry.

Whether it’s Bitcoin or another cryptocurrency, Corepay will prove to be integral to your cryptocurrency exchange business.