Welcome to “The Merchants Guide to Accepting Crypto: The Questions to Ask,” a PYMNTS series aimed at helping merchants, big and small, online and in-store, who want to accept crypto payments figure out what they need to know to move ahead.
In this sixth of seven articles, PYMNTS spoke with Stephen Pair, CEO of crypto payments technology firm BitPay, about exchange rates, exceptions and refunds and the question of customer experience that companies considering working with a crypto payments processor partner need to ask.
See also: Expertise, Experience and Focus Are Critical When Choosing a Crypto Payments Processor
One of the most important, Pair said, is to make sure they have an experience that is not only as easy and seamless as possible but also as familiar.
“Crypto payments can be intimidating to the first-time user,” he said. “Walking them through it and giving them a great experience that they’re ultimately familiar with as they conduct payments is really important.”
That’s why BitPay not only does extensive testing on wallets and supports more than 100 of them.
“It’s important for merchants to really ask the question, what is the customer experience going to be like? When either a consumer or a client business goes to conduct that payment, what is that experience going to look like at the end of the day?”
Much the same thing applies to the merchants themselves, Pair added. “At the end of the day, it all comes down to usability on the merchant side, which is making it as simple as possible to integrate payments.”
See also: Supporting the Right Cryptos and Wallets Is Key When Choosing a Payments Processor
Among other things, that means making it easy to integrate it into their business software for things like generating invoices, he said. BitPay lets clients write their application programming interfaces for integration, but it also has a large selection of “client libraries in different programming languages and platforms that they could just incorporate into their e-commerce platform.”
The same applies to its ready-built plug-ins for commercial or open-source platforms, like BigCommerce of Shopify.
The Right Rate
As far as the payments process, one important thing is to choose the right cryptocurrencies, he said.
“They’re literally thousands of cryptocurrencies out there that could be used for payments, but not all of them work well. Not all of them are going to be around forever,” Pair warned.
So, making sure your payments processor supports the right set of the most important cryptocurrencies is critical.
One big potential hurdle is exchange rates — something customers tend to be very aware of, Pair said.
“It’s very important to us that the buyers on our platform, whether they’re consumers or businesses, perceive that they’re getting a good value for their cryptocurrency,” he said. Otherwise, he added, they’ll just sell it on an exchange, send dollars or another fiat currency to their bank account, and then make the payment.
This is one reason to consider whether you want a payments processor that is an exchange, he said.
See also: Getting Crypto Payments Compliance Right Requires Deep Experience
BitPay is “not an exchange, we are customers of exchanges,” Pair noted. “We monitor the prevailing exchange rates across many exchanges and determine where the market is across all of them, and give buyers the best value for their cryptocurrency.”
Errors and Returns
There are some differences, he said.
“You don’t really have declines in the crypto world in the same way that you do in the credit card world,” Pair said. Nor the type of fraud you see with debit cards.
“What you can see are wallets that misbehave or users that make errors — where they pay too little or too much.”
His firm has a BitPay Protocol, Pair said, that ensures payments are correct every time, so there are “zero exceptions” for wallets that support it.
“When those payment exceptions do occur, most of the time it’s invisible to the merchant,” he said. “For example, if they don’t pay enough cryptocurrency for the invoice … we work with a buyer” to redo that transaction or cancel the transaction, so the merchant doesn’t have to deal with that.
But regardless of what crypto payment processor you might use, those payment exceptions will happen.
“When they inevitably do, it’s very important to know how the processor handles it — a lot of them leave it to the merchants and that can create significant work and effort on the merchant’s part to deal with those problems,” he said. “We try to completely shield the merchant from that.”
Then there are refunds, whether because the buyer overpaid or for another reason. That process, he said, should be transparent to the merchant, with the processor handling it unless the merchant initiates it.
But, that inevitably runs into the volatility of crypto prices, Pair said, warning that can be a touchy process which the processor should make as easy as possible for the merchant.
See also: Savvy Retailers Demand Sophisticated Answers to Evolving Crypto Questions
From the merchant’s perspective, if the settlement is in dollars, which most choose, if they were paid $100, they’re refunding $100. But, Pair noted the client is getting back bitcoin or another cryptocurrency, whose value may have changed.
“We deal with all of that,” he said. “Educating the buyer, making them aware that their Bitcoin is being converted into dollars and sent to the merchant, so if they ever need a refund in the future, for whatever reason, it would be based on the dollar amount at the time of the refund, and whatever the prevailing exchange rates are at the time.”
Making sure consumers are educated about that and making the process as simple and transparent as possible for merchants — and their sales associates if it’s a retail setting — is important, Pair emphasized.
See also: Integrating Crypto Payments Into the Merchant POS Demands Flexibility, Industry Savvy
“We make that process a great user experience for the merchant — to be able to go in and initiate that refund.”
It should, he said, “work no differently than what they’re accustomed to with card acceptance.”
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