Deciding Which Crypto Payment Systems Work Best For Your Business

Cryptocurrencies are touted for their ability to facilitate payments without trusted third parties. This is a vital safeguard against corruption, coercion, and high transaction overheads that have plagued traditional payment rails.

Many cryptocurrencies have achieved a level of success in this regard, but a wholesale transition to crypto payment systems is still a long way off. There are a few available mechanisms for businesses to leverage with crypto payments, and deciding which one works best for you can be a challenging task.

That’s why we’re here to help. Our experts have extensive experience in both traditional payment rails and cryptocurrency development. With both concepts under our belt, were are poised to offer unparalleled consultation and development services for your business.

The natural choice for securely sending high-value transactions anywhere in the world with settlement in minutes is Bitcoin. By far the most secure and decentralized cryptocurrency, Bitcoin regularly sees multiple transactions upwards of $100 million per day. These transactions settle in minutes, and there are no intermediaries. If you control your private keys, you own your Bitcoin.

If you’re a company looking for cross-border payments (i.e., supply chain management, import/export), then Bitcoin offers a compelling solution for you to drastically lower transaction overhead costs.

If Bitcoin is too fringe of a concept for your business, other methods such as Ripple or Stellar may provide a more familiar process. Ripple (XRP) and Stellar are less decentralized than Bitcoin but are more integrated with legacy payment systems. Stellar is working with IBM on an international payments system, and Ripple has integrated with several banks and payment processors to join its enhanced banking settlement network.

Low-value transfers have been a point of emphasis for second-layer blockchain solutions and also a point of contention in the broader cryptocurrency ecosystem.

Bitcoin Cash split from Bitcoin to increase the block size, reduce transaction fees, and function more akin to a traditional payments network. However, Bitcoin’s Lightning Network (LN) has seen incredible growth over the last year and is only accelerating. Should the LN become ubiquitous, Bitcoin’s second layer could become the ‘P2P Digital Cash’ that Satoshi Nakamoto envisioned with the underlying blockchain functioning as a robust settlement layer.

Other cryptocurrency networks — such as Nano — explicitly focus on becoming a payments network, driving their technology towards near-instant settlement and zero fees. These types of networks also have important implications for micropayments, a promising concept of machine-to-machine interactions between IoT devices and merchants.

Micropayments have tremendous potential to revolutionize finance, but trusted intermediaries and the lack of social scalability with traditional payment channels have limited its ability to grow organically. Utilizing the advancing developments within specific cryptocurrencies, companies can seamlessly perform global transactions with virtually no fees or settlement costs.

Settlements of credit and debit cards typically take a couple of days on the back-end. With cryptocurrencies, it is nearly instant. However, cryptocurrencies still face formidable scaling problems, and it is yet to be seen whether or not they can adequately function as a mechanism for everyday PoS transactions.

There have been several significant developments on this front, again, primarily with Bitcoin’s LN. A future PoS ecosystem that utilizes cryptocurrencies will likely be a hybrid traditional payment and blockchain-based system, but that depends on whether conventional payment processors like Visa and Mastercard are willing to adapt and evolve to a financial system that is clearly changing rapidly.

We believe that it is vital for enterprises and organizations to understand the potential benefits of evaluating these technologies now and how they can benefit from them. Forgoing research and time invested in cryptocurrencies is not a prudent long-term strategy. If your business or enterprise is looking for payment development services, cryptocurrency and blockchain consultation, or a mix of both, we’re here to help.

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