As cryptocurrencies increase in popularity, it is becoming more common for customers to want to purchase bitcoins using their debit cards or credit cards. Many consumers are often searching for different types of digital currencies to purchase for various purposes. There are bitcoin merchant accounts for cryptocurrency exchanges, cryptocurrency platforms, and other companies that sell virtual coins. It is now easy and convenient for customers to purchase any type of cryptocurrency using their debit cards or credit cards online.
Bitcoin is a specific cryptocurrency, but the word sometimes refers to many different types of cryptocurrencies that are based on digital coins or tokens. There is now serious competition between bitcoin and cryptocurrencies created using blockchain technology. Bitcoin is a generic term since it was the first digital currency. A bitcoin merchant account provides consumers, who use bitcoin exchanges, with the ability to purchase different types of cryptocurrency using their debit cards or credit cards.
Bitcoin Merchant Services Can Increase Sales
Merchants who provide their customers with an easy way to purchase bitcoins using debit or credit card processing can quickly experience an increase in their level of sales. Having a bitcoin and cryptocurrency merchant account provides a more convenient way for customers to purchase online from merchants. There is a lot of competition when it comes to providing this type of service and accepting online credit card payments is quickly becoming the norm.
Banks and Bitcoin Merchant Accounts
Many banks consider a cryptocurrency merchant to be a high risk business. This is usually based on a lack of knowledge concerning the industry. Many don’t understand the reasons for the pricing volatility of the bitcoin industry, which is understandable as it is an industry that is very new. Banks do not know the best methods to use for monitoring or evaluating the risk connected with a bitcoin merchant account. Instead of embracing the many opportunities offered by cryptocurrency merchant services, some banks are choosing to decline to provide cryptocurrency payment solutions. Many merchants are still able to work with a variety of banks that do handle payments for debit and credit card processing of cryptocurrency.
Opening a Cryptocurrency Merchant Account
Secure websites are part of using a cryptocurrency exchange. It is important that all the pages on a merchant’s website load easily and are properly displayed. A merchant’s refund, privacy as well as other types of relevant policies must be clearly visible. Phone numbers and emails for customer service should be easy to locate. It is common for an underwriter to email or cold call a company’s customer service. The goal will be to identify the quality of customer service a company provides. It is okay for calls to be routed to a voicemail. It should have a message stating the name of the business and when the customer can expect to be called back by their customer service representative. It is also okay to use an email autoresponder. A business needs to be sure the receipt of the email is confirmed. The author of the email needs to be advised when they can expect a reply. It is essential to respond within the time that was promised.
Merchant Identification Number
Whenever a merchant has established a cryptocurrency site, they will be required to have their customers provide a username or password to sign into their account for debit or credit card processing. This means a test or demo login will be used by an underwriting team so they can see what customers view when they log onto a merchant’s site. The processing statements will be reviewed to determine processing volumes and establish ratios of chargeback. Should a chargeback ratio be on the rise, it may require an explanation for the reasons behind it as well as what the company is doing to lower chargeback ratios. A company’s bank statements will be carefully examined to determine if it has sufficient funds in their bank account to properly operate their business. A company’s business documents will be reviewed, and other supporting documentation will be examined. When a company’s account is approved, it will be assigned a merchant identification number. The login credentials for the credit card processing to use a bitcoin payment gateway are emailed securely to an approved merchant. Once this is done, a merchant can start immediately processing payments.
Special Requirements
A major area of concern when a bank provides a cryptocurrency merchant account is to make sure these accounts can’t be corrupted by money laundering. When an application is reviewed, it should include a company’s policies concerning anti-money laundering. A cryptocurrency merchant will need to have this information readily available. A merchant needs to know their customers. This will involve keeping current with standard due diligence documents necessary from a customer who wants to purchase cryptocurrency. Steps a merchant routinely takes to prevent unlawful transactions, as well as how its blockchain computer security computer systems function, will be examined.
Each bitcoin merchant account is considered to be unique. All accounts will have to pay similar fees. This is for refunds, discount rate plus a per-transaction fee, rates for chargebacks, and more. It is possible to negotiate terms for reserves. This can be done in a way that won’t negatively impact a business.
Why Flow Payments?
Over the years Flow Payments has built relationship with banks and processors that have experience and a desire to operate in the digital or cryptocurrency space. We have the experience with working with FinCEN registered MSB’s and non-registered closed loop solutions. Contact us today for your free personalized quote.