Why pay with cryptocurrency?
21.02.2022
Originally posted on Finextra
It seems that the Ministry of Finance and the Central Bank of the Russian Federation have managed to overcome the crisis known in psychology as the Kübler-Ross model. It describes five stages of dealing with a crisis situation, beginning with denial and continuing with anger, bargaining, depression, and, finally, acceptance. Apparently, this is what happened with cryptocurrency in Russia. The government has accepted that digital currencies are the new reality and stopped thinking about banning them.
As we see it, two concerns have hindered the recognition of cryptocurrencies in Russia so far:
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The welfare of non-professional investors who could lose all their money on risky investments
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Massive cryptocurrency use on the black market
Interestingly, when you talk to people about cryptocurrencies, they often cannot imagine any other ways to use them: in the eyes of an average person, cryptocurrencies are still considered a way to get rich quickly.
As it happens, people in countries with a developed and open financial system (and Russia certainly belongs to them) often do not think about, or rather do not know about, the fact that in most countries of the world, where the vast majority of people live, any currency purchases or currency transfers outside of the country are strictly controlled. To understand the extent of the problem, it would be enough to say that these countries include China, India, and almost all of Africa and Southeast Asia, with a combined population of over 4.5 billion.
At the same time, in all these countries (except maybe China), cryptocurrencies are legal, thus creating a situation where they become a more convenient payment method than fiat.
This is especially important for small IT companies. At UpTrader we develop software for small companies in finance, and this type of business is the most common in emerging markets.
Therefore, the legalisation of cryptocurrencies in Russia is a real gift for us. Moreover, I think that it will favour the inflow of foreign capital into Russia and the country's image. It also means that there will be more money, which means everyone will be better off.
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Contrary to skeptics’ expectations and predictions, the volume of cryptocurrency transactions continues to grow. The so-called stablecoins show the greatest stability, as they are used in payments more often than super volatile Bitcoin or Ethereum. Let us remind you that Bitcoin was losing more than 60% of its value last November. It does not make much sense to use such currencies in transactions. Stablecoins, tied to fiat and backed by bank reserves, are a different story. According to coinmarketcap.com, the most popular stablecoins with the largest capitalization are currently Tether (USDT), USD Coin (USDC), and Binance USD (BUSD). Taken together, these findings allow us to make long-term predictions for the continuous increase in cryptocurrency transactions, and this is a good sign for Forex brokers.
Why Forex brokers are better off with a crypto gateway
Those brokers who don't yet have a cryptocurrency gateway to accept payments should take care of it now. Regulators are closely monitoring financial companies. As a result, licenceless brokers can no longer accept payments by bank cards. This means that if a company cannot have a bank account, accepting Visa or Mastercard payments is not available to it. As an option, the broker can accept payments through electronic payment systems and other intermediaries who charge exhorbitant commission, easily in the 8-10% range. Also, due to the tightening regulation in the financial sector, customers from some countries in Asia, Africa, and the Middle East no longer have access to bank processing. In addition, cryptocurrency holders are interested in working with companies that are willing to accept it. From what we have seen in recent years, the trend of financial overregulation is going to continue all over the world. So if a broker wants to expand their geography and get more varied customers, gain a competitive advantage or just stay afloat, it is better to start learning how to work with cryptocurrency now.
In our previous articles, we talked about the pros and cons of accepting cryptocurrencies and how to automate these payments in your company.
07.02.2023
Is accepting cryptocurrency always a good thing for a company, and which companies are better off avoiding cryptopayments altogether?
What is a cryptocurrency payment gateway?
A cryptocurrency payment gateway is a service that allows merchants to accept cryptocurrency as a payment method. Crypto gateways make it easy for businesses to accept cryptocurrency as payment alongside fiat money and settle transactions in real time.
Crypto gateways are growing in popularity due to the widespread use of cryptocurrencies and the security benefits they provide. Many companies are starting to accept cryptocurrency payments to get ahead and enter new markets.
With UpTrader Pay already built into the UpTrader CRM, every broker can automate cryptocurrency payments in literally two clicks. If your company uses another CRM, integrating UpTrader Pay crypto gateway is just as easy because it's a standalone product.
So what are the pros and cons of accepting cryptocurrency?
Most often, brokers accept payments directly to their own wallets. This way, they are able to completely avoid some sensitive issues. For instance, cryptocurrency transactions exclude chargebacks and risks associated with intermediaries. Every broker has probably encountered a situation where large amounts of money are stuck with payment intermediaries for months and sometimes years. In some cases, this money is never returned and the broker bears reputational and financial costs.
The difficulty with accepting payments in cryptocurrency may arise for licensed brokers who avoid dealing with cryptocurrency so as not to anger the regulators. The best way for them to de facto not deal with cryptocurrency is to use cryptocurrency gateways such as BitPay, PayPal, and Coinbase Commerce. In return, companies get fiat currency into their bank accounts and stay within legal bounds. This way, companies can offer customers alternative payment methods and eliminate uncertainty related to cryptocurrencies.
Accepting cryptopayments automatically
Manually accepting crypto payments may overburden your financial department, because processing these transactions is quite a task: you need to compare the requested amount in the CRM and in the wallet, then you need to identify the customer who made the request by the amount they requested, and often two sums are not the same. Then you have to call your customers to find out who transferred the money, and so on. Of course, it is better to automate the process, and we have already written a piece on how to do this:
Connect crypto gateway or how to start accepting crypto without stress.
07.02.2023
Last year MetaQuotes suspended selling White Label that caused the forex industry to start looking for alternatives. Most sensitively it was perceived by small brokers who can’t afford to spend a couple of extra thousands dollars for the MetaTrader 5 Full license. Therefore the good alternative for them turns out to be с-Trader White Label, whose policy is pretty mild and price is reasonable. However MetaQuotes remains the main trading platform provider and it still sells the Full License MetaTrader and companies are still looking forward to the opportunity to work with MetaTrader. It’s still possible, but the price for the base version has been increased from $5000 to $7500. For those companies who can’t handle this price, a good alternative is c-Trader White Label.
Please learn more about c-Trader and MetaTrader Full License from our previous article.
Or contact us directly to get more information.
02.02.2023
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