Résumé
Cryptocurrency payments are increasingly accepted by merchants, individuals and businesses. While you can transfer funds manually, payment gateways offer an easier way to accept cryptocurrency payments. This saves you from manually copying addresses and making mistakes. You can also use a crypto debit or credit card to make fiat currency payments with the cryptocurrencies you have in a linked account.
Crypto payments offer a cheap and fast way to transfer money. There is no need to use local fiat currencies for international transfers. A payment service is often more intuitive than a wallet and also benefits from customer support. Additionally, a payment gateway offers less control, may charge fees, and takes more time to set up than a standard wallet.
You can start making cryptocurrency payments using Binance Pay. This service is available to all Binance users with a cryptocurrency wallet and has no fees. Once you're ready, you can start making payments to any other supported Binance Pay user or merchant. You can also order a free Binance card if you prefer to make payments with a credit or debit card.
Introduction
Although crypto is famous for speculation and investing, it has another use case: payments. It's easy to forget that people use cryptocurrencies like BNB, BTC, and BUSD to transfer value. Large retailers, such as Microsoft and Starbucks, and small businesses have started accepting crypto payments for their goods and services.
This is usually done through a payment gateway to simplify the process. You can even use cryptocurrencies to pay for items in fiat currency with a crypto card. So whether you want to pay back a friend or purchase an item, there are multiple options that use blockchain technology.
How do crypto payments work?
At its simplest level, a crypto payment transfers cryptocurrencies from one wallet to another. To do this manually, you will need the recipient's public address. Using your wallet, you copy the address and send the funds. Although it seems easy, the process can be complicated and intimidating for newcomers. It's not uncommon for users to make irreversible mistakes, like sending the wrong type of cryptocurrency to a certain address or selecting the wrong blockchain network. Since there is no way to return a crypto transaction, this often results in significant losses.
To help make the process foolproof, crypto service providers like Binance have created more intuitive crypto payment methods. These gateways transform a complex process into one that can be completed in just seconds. The exact steps differ depending on the payment processor, but the usual method is as follows:
1. A customer decides to pay for a good or service, or someone wants to pay a friend.
2. The recipient creates a digital invoice to pay using their payment gateway. This is usually a QR code containing the recipient's wallet address and the amount. For example, purchasing a $10 (USD) meal would require $10 of a specific cryptocurrency at the current market rate.
3. The payer scans the QR code with the app and confirms the payment.
4. The cryptocurrency is transferred to the beneficiary's account or digital wallet.
This process is done in just a few clicks. It is also safer and more convenient than trying to follow all the steps manually.
Crypto payment cards
Another option for cryptocurrency payments is to use a cryptocurrency-linked credit or debit card. So, you can make payments using cryptocurrencies even if the recipient only accepts fiat currencies. To use a crypto card, you must store coins and tokens with your card provider. When you buy something, the cryptocurrency exchange sells your digital assets for the required fiat and sends it to the beneficiary. In some cases, you may also repay your monthly credit using cryptocurrencies. The exact conditions will change depending on the issuer or financial institution.
You can use crypto cards in more places than crypto payment gateways. However, it is trickier to pay a friend directly, unless they can accept payment by card. If the beneficiary wants to be paid in cryptocurrency, the card is not suitable either. Visa and Mastercard currently offer crypto card options through different financial service providers.
What are the benefits of crypto payments?
Paying someone in crypto has benefits even without using a payment gateway or crypto card. Combined with a payment system, the experience offers the best of both worlds:
1. Bitcoin (BTC) and other cryptocurrencies can be used in almost all countries. This saves you from having to convert your funds to local fiat currency when making international payments.
2. Depending on the crypto payments provider, your transactions can be completed almost instantly. This usually happens when you both use the same service. Even if your transaction isn't instant, it can often be faster than a bank transfer and cheaper, with fewer transaction fees.
3. A crypto payments service has a customer support team to help you with technical issues. This is usually not the case when you transfer funds manually using a custodial wallet.
4. A crypto payment gateway is, for many people, easier to use than setting up and managing a wallet yourself.
What are the disadvantages of crypto payments?
While the benefits are easy to see, experienced users may encounter limitations when making crypto payments:
1. You have less control than if you created a wallet yourself. Many people prefer the traditional experience of having full custody of their cryptocurrencies. A payment gateway adds an intermediary to the process.
2. Cryptocurrency prices can experience high volatility if you are not using a stablecoin. This can make it difficult for the beneficiary to plan their finances accurately.
3. You may have to go through a lengthy registration process with KYC and AML checks. Although they offer higher security, it is more difficult to create a wallet on your own.
4. Some payment networks charge a fee for the service they offer.
5. Acceptance of cryptocurrencies as a payment method is still not widespread.
What is Binance Pay?
Binance Pay is a crypto payment service offered to all Binance users. It offers a borderless and contactless way to quickly transfer and receive cryptocurrencies. To send cryptocurrencies, you will only need someone's email address, mobile number or payment ID. You can also create a QR code that specifies an amount, a cryptocurrency and a message to send to the payer. Binance Pay also has a list of merchant stores that accept payments through the service.
How to use Binance Pay?
If you already have a Binance account, go to the Binance Pay tab. You will then be prompted to create a nickname for the service before you begin making and receiving payments.
The [Send] tab will allow you to make a payment using an email address, mobile number or payment ID. The [Receive] tab will display your personal QR code, along with the option to customize it for your specific transaction. For more detailed instructions, see our FAQ How to make a payment to an individual with Binance Pay?.
Use a Binance Card
If you want to use your crypto to pay for everyday purchases in fiat, a crypto card is your best option. You can sign up for a free Binance Visa card with your Binance account, provided you have completed KYC and AML verifications. To use it, simply transfer the cryptocurrency you wish to use on the card to your Funding Wallet. When you make a card payment, the crypto will be sold against the local currency you are paying in and transferred to the seller.
To conclude
Since the first real purchase of pizza with bitcoin for 10,000 BTC in 2010, people have been using cryptocurrencies to make payments. More than a decade later, we have moved from a manual process to integrated digital currency gateways offered by FinTech banking and crypto services. If you want to start experimenting with cryptocurrency payments yourself, check with your cryptocurrency exchange to see what services they offer.
