Traditional Online Payments vs Cryptocurrency Payments: Which Payment Method Is Better for Your Business?

Online payments have made shopping quite convenient, especially online shopping. One can pay online without worrying about 'change'. Also, you can keep records of online payments more easily compared to offline payments. However, the crypto payment method has grown significantly due to its advantages and the growing trend of blockchain development.

So, many businesses are now confused about which payment method to choose: traditional or crypto. Here, we will compare the two methods and help you find which one is better for you.

Traditional Online Payments

These payments are usually processed in fiat currencies such as USD, INR, EUR, etc. Customers can pay in fiat currencies via invoices, bank transfers, cards, or regional online transfer services (e.g., UPI for India). This payment method is mostly used in online shopping.

Advantages

• Widely Used and Trusted: A large number of customers prefer to pay in fiat currencies, as they are familiar with available payment options.
• Regulated and Secure: Traditional payments are regulated by strict government and banking rules. Therefore, there are negligible issues related to monitoring, safety, and compliance for businesses and customers.
• Easy Payment Gateway Integration: Tools and plugins for integrating traditional payments are widely available and easy to use. So, you can add traditional payments to your business website quite easily.
• Helps You Offer Multiple Payment Options: You can offer options like UPI, card payments, bank transfers, etc, on your business website. This way, you can attract and serve more customers.

Disadvantages

• Limited Cross-Border Capability: International payments may not be possible in fiat currencies. They may face issues related to government restrictions and currency conversions.
• Slow Settlements: Even when the customer pays instantly, the payment may take some days to reach your bank account. This can disturb your business's cash flow.
• Chargeback Risks: Customers may issue a fraud chargeback even after a successful and satisfactory purchase. This way, you may lose both your product and money.
• Centralization: A single payment passes through many mediators, including banks and service providers. This can increase time, costs, and the risk of technical failures and human mischief.

Cryptocurrency Payments

In this method, customers usually pay using cryptocurrencies like Bitcoin, Ethereum, Litecoin, USDT, USDC, and others. Here, transactions are processed directly from wallet to wallet, making the process faster and more secure.

Advantages

• Faster Payments and Settlements: Cryptocurrency payments are typically faster due to wallet-to-wallet transactions. There is only one intermediary: the miner. Once they confirm the transaction, you receive the payment in your wallet.
• Secure: Cryptocurrency payments are protected by cryptographic security, which makes transaction details tamper-proof. Also, the anonymity of payers and receivers ensures no privacy or security concerns.
• Suitable for International Payments: Cryptocurrency payments don't come with different transaction fees for different countries. Also, there is nothing like currency conversion taxes. So, crypto payments are considered ideal for fiat payments.
• Lower Fees for International Payments: Since there are fewer or no intermediaries, transaction costs are lower with crypto payments.
• No Chargebacks: Crypto payments are irreversible, so customers cannot issue chargebacks for fraud.

Disdvantages

• Complex Integration: One needs to be familiar with blockchain technology to integrate cryptocurrency payments. However, this can be fixed by relying on a third-party payment gateway integration service.
• Limited Accessibility: The crypto payment method is not as widely used as the traditional payment method, so it may be useless for domestic payments.
• Volatility: Cryptocurrencies witness frequent price fluctuations. So, you may lose a big amount if there is a sizeable price drop during the withdrawal or exchange.
• Limited Awareness: Not many customers use cryptocurrencies, and many of them do not consider them legitimate. So, the adoption may be limited.

Conclusion: Which Payment Method Is Better for Your Business

Both payment methods have their advantages as well as disadvantages. However, you can consider the following for choosing an ideal payment method for your business:

Choose Traditional Online Payments If

Your business operates domestically.

• You have limited technical expertise.
• You want a regulated payment method.
• You want to target a wide customer base.

Choose Traditional Online Payments If

• Your business operates domestically and internationally.
• You can market your business globally based on cryptocurrency payments.
• You have the budget or technical ability to integrate crypto payments.
• You want faster settlements.