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How To Pay With Cryptocurrency? Crypto Payments Basics

Read all you need to know on how to pay with cryptocurrency, how crypto payments work and many more.

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Key Takeaways:
  • Crypto payments are slowly becoming more widely accepted by retailers, individuals and businesses.
  • All you need to accept a crypto payment is a wallet with funds and the recipients’ address. 
  • Crypto-linked credit and debit cards are rapidly becoming the preferred option to spend crypto, but they require you to relinquish control over your tokens.
  • Crypto payments offer users a cheap, simple, and quick way to transfer funds both locally and internationally.

The cryptocurrency sector is well known for being a speculative investment opportunity. Today’s expansive digital asset world, industry enthusiasm, and global notoriety represents a notable path forward for modern cryptocurrencies, which largely toiled in obscurity for many years since the invention of assets like Bitcoin

Despite the numerous use cases and specialized sectors that have arisen since the Bitcoin blockchain came online, the use of cryptocurrencies for payments remains one of the most applicable uses for the nascent technology as the world moves towards a multipolar design. 

Here’s a rundown of the basics of using cryptocurrencies for payments as more businesses around the world focus on accepting crypto payments for goods and services. 

How do crypto payments work?

Crypto payments continue to rise in popularity as brick-and-mortar retailers and those outside of the digital asset world get more comfortable with crypto. Even though virtual currencies make headlines for their investment potential, more are interested in crypto payments as they see coins like Bitcoin and Ethereum as both a medium of exchange and a store of value. 

A Checkout.com report from April 2022 presented enlightening statistics. Per their findings after surveying 30,000 consumers and 3,000 merchants across 11 nations, 40% of 18-35 year old consumers planned to pay for goods and services with crypto within the next year. 82% of merchants noted that embracing crypto payments helped attract new customers and reach new demographics. 

Notably, industry leaders like Microsoft, Overstock, Home Depot, and Whole Foods accept crypto payments. Microsoft and streaming platform Twitch were very early adopters, permitting Bitcoin payments back in 2014 before digital assets were mainstream. 

The mechanics of a crypto payment  focuses on transferring digital currencies from one crypto wallet to another. Users do not need to have a traditional bank account or even go through a middleman to accept and receive crypto payments, as peer-to-peer transfers remain popular. 

Research revealed many in Venezuela conducted peer-to-peer crypto transactions to avoid hyperinflation and devaluation of the bolivar. Chainalysis said the South American nation ranked 7th in 2021’s Global Cryptocurrency Adoption Index, largely based on growing acceptance of crypto payments. 

Crypto users will need to have a digital wallet on their computer or mobile device to carry out crypto payments. Many crypto exchanges provide wallets for their users, but those interested in paying with crypto have a wide array of wallet choices. 

Crypto veterans often find the payment process simple and pain-free. However, those new to digital assets or less comfortable with technology might find sending and receiving cryptocurrencies a bit daunting. Many also worry about making a mistake as a wrong step can lead to a total loss of funds. 

However, users can rest assured if they follow the steps below, their recipient will receive payment without any issue. 

How to pay with cryptocurrency 

Once you have a cryptocurrency wallet set up with funds, the first step is to click ‘send’ and enter the recipient’s public address in the field provided. 

When sending crypto, most wallets will verify the address entered is in the correct format for the network in question. Still, it's always a good idea to double-check that you are operating on the correct network. You will lose your funds if you send money to the wrong address or network, as crypto transactions are unable to be reversed. 

After verifying the network and receiving address, enter the amount of crypto you wish to spend and hit the send button. Again, be sure to carefully check the recipient address and pertinent transaction details. 

After clicking send, your part of the transaction is complete. You will need to wait until the recipient receives the funds. The timeline for this process depends on factors like the network activity and gas fees paid.

Many crypto platforms know users might be a bit hesitant to copy-and-paste long wallet addresses and navigate various tools. Some cryptocurrencies payment providers have built payment methods and tools that cut down on the risks of mistakes. 

For example, some allow digital invoices to be created with clear details about the recipient address, and then ask payees to scan a QR code to confirm the payment and send the funds. This simplifies the payment process into just a few clicks and is much more convenient. 

How to receive crypto payments


Whether you’re a business or an individual, receiving crypto payments opens you up to an entirely new world of finance. A Summer 2022 report from PYMNTS and Bitpay found that 85% of surveyed businesses with an annual income of $1+ billion were adopting crypto payments

A wallet is the most important tool needed to accept crypto payments. It’s best to set up a multi-cryptocurrency wallet that supports a wide range of digital assets. After setting one up, you will need to give the payee your wallet address in order to receive funds. Businesses can turn to cryptocurrency payment gateways to accept digital currency payments connected to a wallet. 

After receiving a crypto payment, it is best to move funds to a secure location like a hardware (cold storage) wallet. Crypto should always be moved off of exchanges as soon as possible due to risks of hacks and theft.

Crypto cards for payments

A popular crypto payment option is credit or debit cards linked to a cryptocurrency wallet. These help to bridge the gap between retailers who only accept fiat, and crypto holders who hold most of their wealth in tokens

It’s important to note that this method requires you to relinquish control of your cryptocurrencies to a trusted provider. However, it remains the best option for using, and paying with crypto, in everyday life where credit or debit cards are accepted. 

How do crypto cards work? To use a crypto card, a user will need to deposit tokens into a wallet controlled by the card provider, which the provider will use to deduct any payment requests from. When you make a purchase, the provider will sell a portion of your holdings in order to obtain the required amount of fiat to complete the purchase and send funds to the payee. 

Another method involves building up a tab throughout the month that is paid off in one transaction using crypto in your account. Users will need to check with each company to verify the method in which cryptos are utilized for repayment. Both Visa and Mastercard are known to work with multiple different crypto payments processor platforms to offer crypto card options. 

Advantages of crypto payments

  • Cryptocurrencies can be used in most countries without the need to convert them into the local fiat currency to make international payments.
  • Crypto payment provider transactions process almost instantly and generally offer cheaper fees to save time and money. 
  • Crypto payment services have customer support to help with technical issues, which is not the case when transferring funds directly from a self-custodial crypto wallet. 
  • Payment gateways are easier for newcomers to use than crypto wallets, leading to fewer mistakes or lost funds. 

Disadvantages of crypto payments

  • Payment gateways introduce middlemen into the equation, which move away from the self-custody nature of crypto that many users prefer. 
  • Volatile crypto prices can make it difficult for both payers and payees to plan their finances if they are not using stablecoins. 
  • Payment providers require KYC and AML checks, which can be lengthy and require more effort than setting up a digital wallet. 
  • Some payment networks charge additional fees for the services provided, on top of any exchange and on-chain network fees involved. 
  • Direct crypto payments are still not a widely adopted/accepted payment method.

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