TL;DR

Cryptocurrency payments are becoming more widely accepted by merchants, individuals and businesses. While it is possible to transfer funds manually, payment platforms/channels provide a simpler way to accept cryptocurrency payments. This avoids the need to manually copy addresses and reduces the occurrence of errors. You can also use a crypto debit or credit card to make fiat payments using cryptocurrencies available in an escrow account.

Crypto payments offer a quick and cheap way to transfer funds. There is no need to use local fiat currencies for international transfers. Generally, using a payment service is easier and more intuitive than using a crypto wallet. Additionally, these services often offer customer support. On the other hand, a payment gateway offers less control, may charge fees, and the setup process may take longer compared to a standard crypto wallet.

You can make crypto payments using Binance Pay. The service is available to all Binance users who have a cryptocurrency wallet and does not charge any fees. Make payments to any other Binance Pay user or partner merchant. You can also apply for the Binance Card for free if you prefer to make payments by credit or debit card.

Introduction

Although cryptocurrencies are mainly used for speculation and investments, they have another use case: payments. Many forget that people also use cryptocurrencies like BNB, BTC and BUSD to transfer value. Large merchants and retailers, such as Microsoft and Starbucks, and small businesses have begun accepting payments in cryptocurrencies for their products and services.

To put it simply, the process usually takes place through a payment gateway. With a crypto card, you can also use cryptocurrencies to pay for items sold for fiat currency. Therefore, if you want to give a gift to a friend or buy something, there are several options that use blockchain technology.

How do cryptocurrency payments work?

Basically, a crypto payment transfers cryptocurrencies from one wallet to another. To do this manually, you'll need the recipient's public address. Using your wallet, you copy the address and send the funds. Although this process seems easy, it can be complicated for new users. It is not uncommon for users to make irreversible mistakes, such as sending the wrong type of cryptocurrency to a certain address or selecting the wrong blockchain network. As there is no refund in a cryptocurrency transaction, this often leads to significant losses.

To avoid mistakes and make the process easier, crypto service providers like Binance have created more intuitive methods for cryptocurrency payments. These channels transform a complicated process into something that can be done in just a few seconds. The step-by-step process varies depending on the platform that processes the payment, but the usual method is as follows:

1. The user wants to pay for a good or service or pay an amount to another person.

2. The recipient creates a digital invoice that must be paid using your payment platform/channel. This is usually a QR code containing the receiving wallet address and the corresponding amount. For example, purchasing a $10 meal would require $10 of a specific cryptocurrency, considering the current market rate.

3. To pay, the user scans the QR code with the app and confirms the payment.

4. The amount in cryptocurrencies is transferred to the beneficiary's account or digital wallet.

This entire process can be completed in just a few clicks. Furthermore, this method is safer and more convenient than doing all the steps manually.

Payments with crypto cards

Another option for cryptocurrency payments is to use a crypto credit/debit card. It is possible to make payments using cryptocurrencies, even if the beneficiary only accepts fiat currencies. To use a crypto card, you will need to store coins and tokens with your card provider. When you buy something, the cryptocurrency exchange sells your digital assets for the required fiat value and sends the payment to the beneficiary. In some cases, it is also possible to pay your monthly credit using cryptocurrencies. Terms of use vary depending on the issuer or financial institution.

You can use crypto cards in places other than crypto payment channels. In this case, however, it will be difficult to pay a friend directly unless they accept card payments. If the beneficiary wants to receive in cryptocurrencies, this card is also not suitable. Currently, both Visa and Mastercard offer crypto card options through different financial service providers.

What are the advantages of cryptocurrency payments?

The option to pay in cryptocurrencies offers advantages even without using a crypto platform or card. When combined with a payments system, the experience brings together the best of both worlds:

1. Bitcoin (BTC) and other cryptocurrencies can be used in virtually any country. This eliminates the need to convert to local fiat currency when making international payments.

2. Depending on the crypto payment provider, your transactions may occur almost instantly. This usually happens when both parties use the same service provider. Even if your transaction isn't instantaneous, it will likely be faster and cheaper than a bank account transfer.

3. Crypto payment services typically offer a customer support team to help you with any technical issues. The same cannot be said when you manually transfer funds using a custodial crypto wallet.

4. For many users, a crypto payments platform offers more practicality and simplicity than a wallet that they must set up and manage themselves.

What are the disadvantages of cryptocurrency payments?

Although the advantages are easy to identify, more experienced users may encounter some limitations when making payments with cryptocurrencies:

1. They offer less control than a self-configured crypto wallet. Many prefer the traditional experience of having full custody of their cryptocurrencies. A payment gateway adds an intermediary to the process.

2. Cryptocurrencies have high volatility if it is not a stablecoin payment. This can make financial planning difficult for the beneficiary.

3. A long registration process with KYC and AML checks may be required. While these tools offer security, the process is more laborious than simply creating a personal crypto wallet.

4. Some payment service providers charge fees.

5. Accepting cryptocurrencies as a form of payment is not yet widely accepted.

What is Binance Pay?

Binance Pay is a cryptocurrency payments service offered to all Binance users. With it, it is possible to transfer and receive cryptocurrencies without limitations and without the need for contact between the parties. To send cryptocurrencies, you just need someone's email, mobile number or Pay ID. You can also create a QR code that specifies the amount, cryptocurrency, and message sent to the beneficiary. Binance Pay has a list of stores and merchants (Merchant Stores) that accept payments through the service.

How to use Binance Pay?

If you already have a Binance account, go to Binance Pay. Before making or receiving payments, you will be redirected to create a nickname.

The [Send] tab allows you to make a payment using an email, mobile number or Pay ID. The [Receive] tab displays your personal QR code and the option to customize it for a specific transaction. For more detailed instructions, see our FAQ How to Send Cryptocurrencies to Someone with Binance Pay.

Using Binance Card

To use your cryptocurrencies for fiat purchases, the best option is a cryptocurrency card. You can apply for a Binance Visa Card for free through your Binance account as long as you have completed the necessary KYC and AML checks. To use it, simply transfer the cryptocurrencies you want to use on the card to your Fund Wallet. When making a card payment, the selected cryptocurrency will be sold for the corresponding local currency and the amount will be transferred to the seller.

Final considerations

The use of cryptocurrencies for payments dates back to 2010, with the famous first purchase of pizza with Bitcoin, for 10,000 BTC. More than ten years later, we have progressed from a manual process to integrated digital currency platforms/channels, offered through crypto services from FinTechs and banks. If you want to try payments with cryptocurrencies, contact your crypto broker and check what services they offer.