Every payment system a business accepts comes with a cost of its own, and they all have benefits. Credit cards make it easy and convenient to make a purchase, especially for businesses that handle thousands of transactions.
Cryptocurrency offers another option, allowing customers to pay with digital assets through payment gateways or directly through blockchain networks. It also shows a business is open to innovation and is willing to open its doors to international business.
However, comparing the two methods is not as simple as checking their advertised fees. Crypto payments reduce processing expenses, and they are especially useful for international payments and large purchases. The goal is for the payment system to be convenient and reduce costs.
What Businesses Actually Pay for Credit Card Payments
Processing Fees and Other Charges
There are several charges related to credit card payments. Interchange compensates the cardholder’s bank, while card networks charge fees for operating their payment systems. There’s also a charge from the acquiring bank for handling transactions and providing related services. These costs are bundled into a rate.
For instance, Stripe has been public about its costs. They amount to 2.9% plus $0.30 per successful transaction for domestic online card payments. International cards incur an additional 1.5%, and the conversion rate is one percent.
Other processors may have different rates, and it depends on the currency being converted.
Why Transaction Size Matters
Fixed charges are the same regardless of the amount being transferred, but when a fee is set as a percentage of a transfer, the size of it matters. At Stripe’s example rate, a $100 sale costs $3.20 to process. A $1,000 sale costs $29.30. Although the percentage remains the same, the absolute expense increases considerably.
For businesses with thin margins, the fees start to cut into the profits.
How Much Does It Cost to Accept Cryptocurrency?
Payment Gateway Fees Versus Direct Wallet Payments
Businesses can accept cryptocurrency through a payment processor or receive it directly into a digital wallet. Using a gateway makes the process simpler and allows for quick checkout, payment confirmation, transaction records, and settlement. Using these services comes with a cost, but makes the administrative work less labor-intensive.
BitPay’s published merchant pricing starts at 2% plus $0.25 per transaction for businesses processing less than $500,000 monthly. The rate is lowered to 1.5% for monthly volumes between $500,000 and $999,999, and 1% for volumes of $1 million or more.
Direct wallet payments don’t require the gateway fees, but it’s up to businesses to manage security, confirm transactions, handle refunds, and maintain accurate records. From the user’s point of view, there is no difference between the two other than the cost. The funds are simply moved from a Bitcoin savings account or a wallet and paid to the seller or service provider.
Stablecoins Can Change the Calculation
Some crypto payments don’t carry the same risk as others. Bitcoin and other crypto assets are volatile, and their value depends on market forces. Stablecoins, such as USDC, are designed to maintain a value linked to a reference currency, usually the US dollar, although they still carry risks.
Stripe lists stablecoin payments at a promotional 0.8 percent per successful transaction through January 1, 2027. There will be an additional charge of 0.2 percent thereafter. For instance, their fee for a card payment is much higher, at 2.9 percent.
Side-by-Side Cost Comparison: Crypto vs. Credit Cards
Comparing the two methods side by side shows how much the choice of payment can affect business expenses. The following examples use published US pricing from Stripe and BitPay. They assume successful domestic card transactions and BitPay payments in its lowest-volume tier, without additional costs.
Under these assumptions, BitPay’s fee is lower for all three transactions. A business processing one hundred $1,000 orders monthly would pay $2,930 in card fees or $2,025 in crypto processing fees, a difference of $905.
However, it doesn’t mean there’s equivalent savings in practice. There are also additional network charges, currency conversion, the cost of refunds, and withdrawal costs. The useful metric is the effective payment cost: all fees and operating expenses divided by the total value of completed sales.
The Hidden Costs That Can Erase Crypto Savings
Conversion, Volatility, and Settlement
A business that’s paid in cryptocurrency ends up converting its funds into fiat money in order to pay day-to-day expenses. Therefore, the savings made by using crypto may end up reduced by the conversion.
Holding crypto instead of selling it also comes with additional risks. Cryptos are volatile, and they can lose value based on market forces, thus cutting into the profits. Stablecoins reduce this risk, but they also come with conversion costs.
Accounting, Compliance, and Technical Setup
Crypto payments require the business to keep records and manage wallet security. Depending on the jurisdiction, this may include keeping track of exchange rates and calculating taxable amounts. Reporting requirements also change and usually become more complicated and demanding.
Integrating a crypto payment requires the services of a developer and ongoing maintenance. If the processing fees are lower, but labor is more intensive, the savings may not be worth it from the business side of things.
Refunds and Customer Support
Blockchain payments can’t be reversed after confirmation. If a business offers refunds, they need to make a separate payment to reimburse the customers. That means that the additional fees further diminish the profits for the company. A clear refund policy, however, shows a business respects its customers and users.
Chargebacks, Fraud, and the Cost of Payment Risk
If a customer disputes a transaction, it’s up to the business to provide records of it and to prove their case. It means a business can cover the cost of this labor and still lose both the payment and the product.
Crypto payments don’t allow for chargebacks, since there are no ways to reverse the transaction once it’s made. This can reduce one source of merchant losses, particularly for digital products and international transactions.
Businesses still need to detect fraudulent orders, verify transactions, and protect crypto wallets. The financial benefits, therefore, depend on the dispute rate a merchant needs to handle.
Which Businesses Benefit Most From Crypto Payments?
The benefits of crypto payments vary greatly based on the industry the business is in:
International e-commerce: Merchants selling across borders may benefit when crypto reduces currency conversion expenses or makes payments easier for customers in markets with limited card access.
High-value transactions: Businesses selling expensive and high-end products benefit in absolute terms when percentage-based fees are applied.
Crypto-native businesses: Companies that work with customers who already hold large amounts of crypto find crypto payments to be the most convenient.
Small local retailers: shops that have a low average order value may find that integration expenses and limited customer demand outweigh the potential savings.
How to Decide Whether Switching Makes Financial Sense
When deciding to switch to crypto payments, a business should take into account the demand for it, meaning how many customers want to make payments with crypto. They should also compare the full costs, including fees and transaction fees, to the costs of using credit card payments.