TL;DR

Crypto payments are becoming more widely accepted by retailers, individuals, and businesses. While you can transfer funds manually, payment gateways provide a simpler way of accepting crypto payments. You don't need to copy addresses manually and make mistakes. You can also use a crypto debit or credit card to make fiat payments with crypto held in a linked account.

Crypto payments provide a cheap, easy and fast way to transfer funds. You don't need to use local fiat currency for international transfers. Payment services will often be more intuitive than wallets and will also have customer support. On the other hand, payment gateways provide less control, can charge fees, and take longer to set up than standard wallets.

You can start making crypto payments using Binance Pay. The service is available to all Binance users with a crypto wallet and charges zero fees. Once ready, you can start making payments to any Binance Pay user or supported retailer. You can also order a free Binance Card if you like making payments by credit or debit card.

Introduction

While best known for speculation and investment, crypto has another use: payments. It's easy to forget that people use cryptocurrencies like BNB, BTC, and BUSD to transfer value. Large retailers, such as Microsoft and Starbucks, as well as small businesses have started accepting crypto payments for their goods and services.

This is usually done through a payment gateway to simplify the process. You can even use crypto to pay for goods in fiat currency with a crypto card. So, whether you want to pay back a friend or buy an item, there are several options that use blockchain technology.

How do crypto payments work?

Simply put, crypto payments transfer cryptocurrency from one wallet to another. To do this manually, you need the recipient's public address. Then, you copy the address and send funds using your wallet. Even though it seems easy, the process can be quite difficult and intimidating for beginners. Users often make irreversible mistakes, such as sending the wrong type of crypto to a specific address or choosing the wrong blockchain network. Since there is no way to reverse crypto transactions, this often leads to significant losses.

To help this process go wrong, crypto service providers like Binance have created more intuitive crypto payment methods. This gateway turns a complex process into one that can be done in just a few seconds. The exact steps vary depending on the payment processor, but the general method is as follows:

1. A customer decides to pay for goods or services, or someone wants to pay a friend.

2. The recipient creates a digital invoice that will be paid using the payment gateway. Typically, it takes the form of a QR code containing the recipient's wallet address and the required amount. For example, buying $10 worth of food (US dollars) would require $10 worth of a particular cryptocurrency at the current market rate.

3. The payer scans the QR code with the app, then confirms the payment.

4. Crypto is transferred to the payee's account or digital wallet.

This entire process can be completed in just a few clicks. This method is also safer and easier than trying to do everything manually.

Crypto card for payment

Another option for crypto payments is to use a crypto-linked credit or debit card. This way, you can make payments using cryptocurrency even if the payee only accepts fiat. To use a crypto card, you must deposit coins and tokens with the card provider. When you buy something, cryptocurrency exchanges sell your digital assets for the required fiat, then sell them to the payee. In some cases, you might also pay off your monthly credit using crypto. The exact terms will change depending on the issuer or financial institution.

You can use crypto cards in more places than crypto payment gateways. However, paying friends in person will be more difficult unless they can accept card payments. If the payee wants to be paid with crypto, then cards will not be suitable either. Visa and Mastercard currently offer crypto card options through various financial service providers.

What are the advantages of crypto payments?

Paying someone in crypto has advantages even without using a payment gateway or crypto card. When combined with a payment system, the experience benefits from both sides:

1. Bitcoin (BTC) and other cryptocurrencies can be used in almost any country. You don't need to convert to local fiat currency when making international payments.

2. Depending on the crypto payment provider, your transactions can take place almost instantly. This usually happens when both parties use the same service. While not instant, your transaction is often faster than a bank account transfer and cheaper with fewer transaction fees.

3. Crypto payment services will have a customer support team to support you with any technical issues. This does not happen when you transfer funds manually with a custodial crypto wallet.

4. For most people, payment gateways are easier to use than setting up your own wallet and managing it.

What are the disadvantages of crypto payments?

Although the advantages are easily visible, experienced users may encounter some limitations when making crypto payments:

1. You have less control than managing your own wallet. Most people prefer a traditional experience that allows full custody of their crypto. Payment gateways effectively add a middleman to the process.

2. Crypto prices can experience volatility that they wouldn't if you didn't use stablecoins. This can make it difficult for payees to plan their finances accurately.

3. You may have to go through a lengthy registration process with KYC and AML checks. While this keeps people safe, there is more to the effort than creating your own wallet.

4. Some payment networks will charge a fee for the services offered.

5. Accepting crypto as a payment method is still not widely accepted.

What is Binance Pay?

Binance Pay is a crypto payment service offered to all Binance users. This service offers a seamless and contactless way to quickly transfer and receive cryptocurrency. To send crypto, all you need is someone's email, mobile number, or payment ID. You can also create a QR code that specifies the amount, cryptocurrency, and message to be sent to the payer. Binance Pay also has a list of Merchant Stores that accept payments through this service.

How to use Binance Pay?

If you already have a Binance Account, navigate to the Binance Pay tab. You will then be prompted to create an alias for the service before starting to make and receive payments.

The [Send] tab will allow you to make payments using email, mobile number or Pay ID. The [Receive] tab will display a personalized QR code, along with options to customize it to a specific transaction. For more detailed instructions, read the FAQ How to Send Cryptocurrency to Individuals with Binance Pay.

Using Binance Card

If you are interested in using crypto to pay for everyday fiat purchases, then a crypto card is the best choice. You can register for a Binance Visa Card for free with a Binance account as long as you have completed KYC and AML checks. To use it, simply transfer the crypto you want to use on your card to your Funding Wallet. When making a card payment, the crypto will be sold for the selected local currency to pay and transferred to the vendor.

Closing

Since the famous real-world purchase of a Bitcoin pizza for 10,000 BTC in 2010, people have used crypto to make payments. Over the next ten years, we have progressed from manual processes to integrated digital currency gateways offered through FinTech banking and crypto services. If you want to experiment with crypto payments yourself, contact your crypto exchange to find out what services they offer.