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This article is a part of IOV Labs’ series focused on helping newcomers to the world of Web3 understand the value of decentralized finance. Read on to explore the top 5 reasons more businesses are accepting cryptocurrency as a payment method, the best ways to implement this, and how to tackle the associated challenges.

Payments are the fastest-growing use case in the DeFi space. In 2021, the global cryptocurrency payment app market size was valued at $545M and is projected to expand at a rate of 16.6% each year until 2030. This growth is driven by multiple factors, such as that crypto payments offer faster and cheaper alternatives, expand the reach of businesses to global markets, and protect merchants from fraud chargebacks.

Crypto payments market growth between 2020-2030. Source: Grand View Research

In this article, we will explore how to accept crypto payments, the benefits and risks of doing so, and what the future holds for the expected exponentially growing crypto payment market.

How can you accept payments in cryptocurrency?

There are two leading methods for accepting cryptocurrency payments — a centralized way via gateways, and a decentralized way via crypto wallets.

1. Crypto payment gateways (centralized)

Crypto payment gateways, or crypto “service providers,” allow merchants to receive payments in crypto through their platform. As a merchant, all you need to do is follow the step-by-step guide the gateway provider provides to integrate them into your structure. Once integrated, the gateway provider will act as an intermediary and allow all customers to pay with crypto. If desired, it can also automatically convert that crypto to a fiat currency which the merchant will receive directly as payment.

These applications make crypto payments scalable and user-friendly, helping to push greater adoption. However, they rely on heavily centralized third-party service structures to process payments, which can cause security concerns.

2. Direct crypto payments (decentralized)

The other option for paying with crypto is direct peer-to-peer transactions over the blockchain. This is achieved by integrating a crypto wallet for direct payments and does not rely on any intermediaries.

Once integrated, all processing activities will need to be manually monitored by the merchant, including supervising confirmation on the blockchain, tracking transactions, generating invoices, and converting to fiat currency when necessary.

Using this setup is currently relatively complex for non Web3 native businesses and still requires good technical knowledge of crypto before starting. But as more user-friendly DeFi options evolve and new technologies are developed, direct crypto payment integration will become more intuitive and grow in popularity.

Different Web3 businesses are working on developing tools and services to help businesses accept cryptocurrency payments. For example, Bitso, a LATAM-based DeFi company, offers an API that allows merchants to integrate cryptocurrency payments into their websites and apps. Bitso also provides tools for merchants to manage their cryptocurrency payments, including real-time transaction monitoring and reporting.

Such efforts could improve Fintech’s adoption of crypto payments if offered with easy-to-navigate UX to serve a wider range of users and support them tackle everyday payment matters.

What are the benefits of crypto payments?

Here are some of the key reasons why cryptocurrency payments are expected to boom in popularity over the coming years:

1. Cheaper transaction costs

Cryptocurrency payments typically have lower transaction costs compared to traditional payment methods as they remove the need for intermediaries and their associated fees. For example, Visa currently charges merchants a 1.25-3.25% fee for every transaction, whereas using modern crypto solutions, such as Layer 2s which use less computational resources, mean fees can be lowered to just a fraction of a cent per transaction.

2. Faster transactions

Another benefit of accepting crypto payments is the speed of transaction processing. Traditional payment methods can take several days to process, causing delays for both the business and customers. Cryptocurrency transactions can be processed and settled almost instantly (depending on the network), which can provide a significant advantage for businesses that need to receive payments quickly.

3. Wider market reach

Cryptocurrency is global. It can expand a business’s customer base beyond traditional geographic boundaries, offering a way to tap into new markets. Crypto can be used to make payments at your local corner shop or to a business on the other side of the world. The fees and settlement time will be the same, without the need for currency exchange.

4. More inclusive of underbanked communities

Accepting cryptocurrency payments can appeal to people in underbanked regions of the world. According to the World Bank, around 24% of adults worldwide do not have a bank account. However, in regions such as Latin America, the number of unbanked is closer to 50%. And according to Mastercard’s New Payments Index 2022, 51% of consumers in the LATAM have already made a transaction using cryptocurrency, and more than a third say they have made a payment for an everyday purchase with stablecoins.

5. Merchant protection against fraud chargebacks

A risk of accepting traditional payment methods is the potential for fraud chargebacks. Cryptocurrency payments are processed over the blockchain and irreversible once sent (without the involvement of the receiver). As long as the blockchain remains secure, it is impossible for fraudsters to claim back or reverse a transaction.

What are the risks of crypto payments?

Despite the benefits of accepting crypto payments, some hurdles still need to be overcome as adoption increases. Some of the risks that still exist for businesses accepting crypto include the following:

Price volatility

One of the most significant risks of accepting cryptocurrency is the high volatility of crypto prices. The value of cryptocurrencies can fluctuate rapidly, sometimes by as much as 10-20% in a single day. This can pose a risk for businesses that accept cryptocurrency payments if the value of the payment drops before it can be converted into fiat currency. However, this risk can be mitigated through the use of stablecoins.

Wallet security

Due to the existing complexity of integrating direct crypto payments, they have become popular targets for hackers and fraudsters. New safeguarding measures for both merchants and customers are being implemented by more modern crypto wallets and payment providers to mitigate this risk.

Regulations and tax implications

DeFi is still young, and regulations within the space are still evolving. When accepting crypto payments, merchants must be on top of the latest legal requirements (e.g. identity verification, KYC/AML, audit trails) mandated by regulators within their region and be sure to accept crypto assets that are approved by such regulators.

Moreover, in certain counties, crypto payments are subject to taxes, the requirements for which can be unclear to taxpayers. Detailed records of all transactions need to be kept, and there may be a need to pay capital gains taxes on any increase in the value of the crypto received. Both regulatory uncertainty and tax implications create additional burdens and costs for businesses who want to adopt crypto payments as they would need to hire staff to handle regulatory changes, and ensure compliance.

Using a payment gateway provider can be beneficial for businesses that may not be equipped to handle such obligations— they will do much of the leg work in keeping up to date with the latest regulatory requirements and generally offer tax statements as part of their service.

The future of crypto payments

Despite the challenges that still need to be overcome, the overwhelming sentiment is that cryptocurrency payments and DeFi, as a whole, are set to boom over the next decade. As crypto payment solutions gain further adoption, they will also grow to become more user-friendly and easy to implement, causing a cascading effect that will change the expected norms of payment options. It will become a barrier for new customers not to offer the option to pay with crypto.

As crypto payment solutions evolve and become more commonplace, the side-by-side implementation of other DeFi solutions, such as lending, staking, and others, will give businesses greater flexibility to offer incentives for paying with crypto.

We can also expect to see more regulatory clarity on the requirements for businesses accepting crypto as payments. Including which cryptocurrencies are considered “safest” to accept as payment from a regulatory standpoint, and the required level of KYC and audit trails needed.


Crypto payment solutions have the potential to disrupt traditional financial systems and change the norms of how people pay for goods and services. At the same time, they will create new opportunities for innovation and collaboration between traditional financial institutions and crypto companies. Overall, crypto payments are going to be a vital driver of growth in DeFi space over the next decade. As more people adopt and become familiar with cryptocurrencies, the demand for applications that facilitate crypto payments will increase, leading to more innovation and growth in the DeFi space.

If you believe that integrating crypto payments in your business will improve your users’ experience and optimize your services, start by exploring the RIF Product Suite. Learn how you can benefit from the RIF Wallet to integrate cryptocurrency borrowing, lending and saving services into your existing products or launch a brand new wallet. See how RIF Relay can minimize gas fees for your users and optimize their experience, and explore the different DeFi use cases that your business can leverage to revolutionize your business.

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