Some people call Bitcoin the internet money. With proper caution, individuals are sending and receiving Bitcoin payments online without revealing sensitive information.
Ideally, you don’t disclose your Bitcoin wallet or account information when sending or receiving crypto payments.
Today, Bitcoin is the most accepted virtual currency. People are using services like the Yuan Pay Group login to trade Bitcoin. This platform brings the simplicity most people look for when buying and selling cryptocurrencies online. And you can register free of charge and start trading Bitcoin.
But if your goal is to accept or send Bitcoin payments, you may want to know how this cryptocurrency compares to credit cards. Well, Bitcoin requires a customer to scan the business’ QR code on a mobile phone or a high-end laptop to pay for a service or commodity.
Bitcoin Payment Service Explained
A Bitcoin payment service enables a business or merchant to receive payments via this cryptocurrency for services and goods upon delivery or sale completion. This option also works like processing a regular debit or credit card payment. It’s also known as a Bitcoin merchant service. The only difference is that the process involves Bitcoin instead of fiat money.
When shopping at a local store, you swipe a credit card when paying at the counter and then input a PIN to complete the transaction. You can also pay for a product or service online and pay using your credit card by sharing the payment details.
Both cases involve a payment system that allows for authentication and eventual processing of the credit card to complete the payment. This system records and transmits payment details and authentication credentials securely to facilitate the transfer of funds from the customer’s account to that of the store. The system also issues a confirmation to the involved parties.
A Bitcoin payment service operates in almost the same way. It works as the intermediary between the buyer and the seller, processing Bitcoin payments. And this process also involves transaction recording on a public ledger that uses blockchain technology.
Merchants can, therefore, accept Bitcoin payments at physical and online locations. And, they don’t have to worry about how Bitcoin payment works in the background.
How Bitcoin Payment Works
Paying for a service or product using Bitcoin is very simple. Here are the steps of the payment process.
- A customer chooses to pay in Bitcoins upon reaching the checkout point in a store, app, or the web.
- They send a specific amount at a locked-in exchange rate that applies at the exact time of completing the transaction.
- The payment service converts the paid Bitcoins into the chosen currency instantly, eliminating the risk of volatility.
- The system adds the money into the merchant’s account and is credited to their preferred bank account at a decided frequency when the accumulated amount crosses a threshold limit.
The payment service conveys all necessary details to the blockchain network securely for authentication and recording purposes. Miners verify the Bitcoin transaction and then add it to the blockchain, thereby receiving a miner’s fee.
Essentially, this fee is the reward that miners get to verify and authenticate Bitcoin transactions.
The increasing overall Bitcoin’s acceptance indicates more global users will continue transacting in this cryptocurrency. The continuously growing influence of a borderless economy that is not under any central authority’s control puts traditional credit cards at risk.
With the increasing number of people and businesses accepting cryptocurrencies, credit cards that depend on fiat currencies will most likely fee some heat.
Nevertheless, credit card providers have to embrace the evolution and technological advances that the new offerings bring. Thus, they should also come up with innovative ways to effectively compete with the Bitcoin payment service.