How to Adopt Web3 Payments for Your Business

The payment industry has developed massively over the years. From dealing with the barter system to money bills, credit cards, and the recently introduced decentralised finance, the revolution of payment systems facilitated the introduction of new businesses, facilitating cutting-edge technologies to companies of all sizes and industries.

The growth of internet technologies introduced web3 payments, where users control their finances more transparently and flexibly. This advancement allowed startups and online businesses to reach more clients, enter new markets and improve their revenues.

Let’s review the web3 payment development and how to adopt Web3 payments.

The Evolution of Web3

Web2 is the current version of the Internet, where corporations control services and the Internet of Things in exchange for user data. Large companies and organisations dominate the web, enforcing their rules and monitoring how users comply with these guidelines.

However, the web3 iteration is customer-focused, where users own and control their data, services and technologies. The web3 evolution spurred massively with the introduction of blockchain, decentralised currencies and digital wallets.

Web3 payments allow users to control their financial transactions, offering more flexible ways to manage funds and data away from corporate control, ensuring maximum security and anonymity.

Understanding Decentralised Finance

Decentralised finance (DeFi) entails utilising modern payment processing and transacting technologies. DeFi has found more avenues to send and receive money than the usual bank transfers. Users can now use digital wallets, cryptocurrencies, stablecoins, digital central bank currencies, and other cashless means of payment.

This introduction has had various benefits for users when buying online or requesting services from websites with unverifiable security protocols. Additionally, companies benefited from the globality and accessibility of web3 payments, enabling them to reach more clients and improve their performance.

This shift from centralised bank control resulted in better service offerings from centralised and decentralised financial institutions, striving to capture as many clients as possible.

Web3 Payments Explained

Web 3.0 payment systems rely on blockchain technology, leveraging the development of Bitcoin and Ethereum ecosystems, among thousands of other cryptocurrencies. Unlike traditional payment systems that use bank transfers, bank-issued credit/debit cards, and other financial institution transactions, Web3 payments involve fewer intermediaries.

This approach uses a web3 payment gateway, which leverages API connections and smart contracts to initiate, verify, process and settle payments automatically. This way, transactions are delivered faster and without the intervention of third parties, highlighting user data privacy.

However, businesses must focus their investments on technologies that support web3 payments, ensuring seamless operations and integrations.

How Do Web3 Transactions Work?

Web3 payment companies use cryptocurrencies, such as Bitcoin, Ethereum and Dogecoin, to process transactions between users. BTC and ETH are the most used and largest crypto networks, with sophisticated ecosystems and tremendous value growth over the years.

Stablecoins and pegged tokens are other options used by businesses accepting web3 payments, which use cryptocurrencies that have a fixed value in USD or EUR.

When users pay using web3 networks, the payment gateway checks the sender’s wallet to ensure fund validity and sufficiency. Then, the gateway communicates with the seller’s website to deduct the determined price and register the transaction in the blockchain’s public ledger.

Web2 vs Web3 Payment Solutions

Web2 entails centralised payments, where transactions are moderated by a third party, whether a central bank or a financial institution. Direct transactions between users are possible in web2. However, they are facilitated by a banking system, including its database, gateways, intermediaries and technologies.

This centralised approach increases the risk of personal data leaks. It increases the user’s reliance on the bank, requiring the user to create and verify an account before conducting financial operations.

On the other hand, web3 payments use decentralised ecosystems, including blockchain and cryptocurrencies. This way, users can store and send money using crypto wallets without registering and submitting any personal or financial information.

Web3 payments are peer-to-peer, eliminating the need for a third-party moderator and safeguarding user data and privacy. DeFi payments use blockchain-based currencies, like Bitcoin and Ethereum, that use automated protocols to send and receive money without using central banks and centralised financial institutions.

Cryptocurrencies like Bitcoin are governed by a network of developers and nodes that are not-for-profit and work in exchange for gas fees that are allocated to develop the network and ensure its proper performance.

This approach aligns with the increasing demands for more privacy and opens the door to a large number of Web3 crypto payment projects that facilitate paying with virtual coins.

Benefits of Web3 Crypto Payments

The introduction of web3 payment systems elevated the competition between centralised and decentralised economies, benefiting end-users. Nevertheless, blockchain transactions became very popular due to the numerous advantages they offer to businesses.

Highlighting User Control

Decentralised payment systems are user-oriented, giving users more control and flexibility over their personal data and payments. This way, buyers can choose the blockchain they want to use, the gas fees they want to pay and the fund storage method they prefer, whether crypto or fiat money.

Lower Transaction Fees

Web3 payment methods use blockchain and cryptocurrencies, which are advanced systems used for peer-to-peer transactions and automated settlements. This approach removes the need for a third-party company to verify and process the transfer, resulting in lower third-party fees.

Banks and other non-bank financial companies are for-profit organisations that rely on service fees and commissions to generate revenues. Therefore, they charge different fees per transaction and on currency conversions.

On the other hand, Bitcoin charges gas fees to compensate miners and motivate them to keep contributing to the web3 payment infrastructure.

Faster Transactions

Crypto payments involve fewer third-party validators, data processors and currency converters, leading to lower intermediary fees. In fact, the unity of cryptocurrency around the world removes the need to convert between currencies.

Web3 payments use smart contract technology, a pre-programmed contract that executes automatically once specific criteria are met, minimising the fail points. However, central banks are powered to monitor and block any transaction if deemed suspicious.

Paying with cryptocurrencies is not affected by bank holidays or weekend days. In contrast, traditional banking systems rely on human resources, and a transfer can simply be delayed because it is initiated after working hours.

Global Reach

Cryptocurrencies hold almost the same value everywhere in the world. For example, the price of 1 Bitcoin in China and Mexico is similar unless the platform’s specific fees arise. This decentralised system makes it more affordable for companies and startups to do business on the global stage and find partners from different countries.

Moreover, online businesses can pay employees using cryptocurrencies to avoid fiat currency conversion and its associated fees. Exchange rates can heavily influence the transfer value, especially when two non-major currencies are involved.

Nevertheless, participants can swap between crypto coins, for example, Bitcoin to Tether, using crypto exchange platforms to store the money in the preferred currency while only paying the blockchain gas fees.

Key Component of a Web3 Payment Infrastructure

The web3 payment system is a complicated structure, and adopting these technologies requires a deep understanding of how decentralised finance works and what it consists of.

Blockchain

Blockchain is the notion of a decentralised economy. It is the public ledger where all web3 payments are registered with timestamps, sender and receiver wallets and the transaction amount. 

Anyone can find and track crypto transactions using blockchain scanners to find detailed information such as the block number, how many nodes participated, gas fees, the block’s length and other technical details.

Bitcoin and Ethereum are some of the most advanced blockchain networks, with multiple security systems in-house and a flexible environment for other utility tokens and stablecoins. Other popular chains include Polygon and Avalanche, which support different web3 crypto payment projects, highlighting interoperability and convenience.

Smart Contracts

Smart contracts are self-executing technologies that perform specific functions when criteria are met. These programmed entities remove the need to trust another network participant because they automatically function when predetermined conditions are satisfied.

For example, they process payments, verify a document’s authenticity and other blockchain transaction verification requests.

Digital Wallets

Digital wallets are electronic storage units that send and receive funds without using bank cards or accounts. They are created virtually by financial institutions and providers, offering decentralised wallets.

Businesses that accept web3 payments use integrations that allow customers to connect their crypto wallets to initiate transactions and store funds.

Tokenisation

A crypto token is an advanced piece of the decentralised financial system. These elements serve different purposes, such as governance tokens, crypto liquidity pool tokens, ownership tokens, and utility tokens.

In web3 networks, tokens represent the claim of ownership for investors and users receiving airdrops. In liquidity pools, participants are rewarded with unique LP tokens that can be redeemed to receive their share of the investment.

Other utility tokens are used in crypto gaming, NFT creation and other ownership-claiming functions in the blockchain setting.

Who Uses web3 Payments?

Paying with web3 ecosystems is not exclusive to financial institutions. This technology has spread into more industries and sectors that work online.

• Travel industry: The travel industry can benefit from blockchain practices to manage payments and itineraries. Smart contracts are used to verify a customer’s identity and guarantee reservations.
• Online hosting: Cloud hosting providers can use the blockchain to serve customers without revealing their information, ensuring enhanced security. It can also use tokenisation to provide access.
• Fast food chains: The food industry already facilitates crypto payments through scannable QR codes that allow customers to pay on-point using Web3 wallets.
• iGaming: The gambling industry was among the first to benefit from web3 payments, which enable customers to access and pay in online casinos, especially where gambling is prohibited.
• Online streaming services: Streaming platforms enable creators to receive cryptos and manage a decentralised creator economy, facilitating donations and contributions from everywhere.
• E-commerce: Online stores can benefit significantly from crypto payments, enabling customers to pay using secure digital assets without processing their bank card details. This way, businesses can expand their reach and serve more customers.

Integrating Crypto Payment Solutions: Step-by-step

Adding a web3 crypto payment tool can significantly boost your operations, allowing you to tap into new markets and serve more customers at low costs. 

The increasing adoption rate of web3 ecosystems paved the way for more DeFi projects to offer integration facilities and crypto services for businesses from different industries. Here’s how you can join this trend.

1. Find a Web3 Payment Processor

Research the web for a blockchain payment provider. Inspect the offered services, review customer testimonials, and ensure their legitimacy. Avoid working with illegitimate operators, as you will risk your and your customers’ funds.

Review the offered services, including the range of cryptocurrencies, blockchains, execution time, processing capacity, and API connectivity, and ensure they suit your website’s specifications and business needs.

B2BINPAY offers a one-point stop for all your crypto payment needs, including hundreds of cryptocurrencies and over ten blockchains to settle your payment faster.

2. Configure Your Required Features

After selecting the best match, choose the range of services you want to add to your platform. White label crypto payment processors allow you to seamlessly integrate a ready-to-use platform while configuring the features and services to match your requirements.

Select the payment methods, including web3 currencies, crypto tokens and stablecoins, and choose the integration methods with digital wallets.

Bitcoin, Ethereum and Dogecoin are some of the most used cryptocurrencies. Tether and USDC are commonly used pegged cryptos with stable values. Ensure to offer these currencies in your payments.

3. Integrate Additional Services

Start adding more services and features to your web3 payment tool, such as on-ramp/off-ramp widgets to facilitate paying with cryptocurrencies using traditional payment methods. You can also opt-in to add Apple Pay and Google Pay options to increase your users’ options.

Additionally, you can add live chat to offer technical support to help customers in their payment journey. Integrate a fully-fledged CRM software to support your operations and monitor your website’s performance more accurately and timely.

4. Fine-Tune The Customer Experience

Improve the user experience by integrating simple interaction points, appealing layouts and straightforward interfaces. Create clear instructions to avoid confusion and users clicking off your page.

Increase the customer’s payment options by accepting more digital wallets like MetaMask, B2BINPAY wallets, TrustWallet and mobile payments.

5. Set Up Your Merchant Account

The merchant wallet is where you receive your payments, and from there, you can withdraw the funds to your personal account to realise profits and losses.

Configure the merchant account, whether you want to receive funds in the same currency that the customer used or convert them to another cryptocurrency or stablecoin to store your money. You can also set up automated payouts to manage your funds.

Conclusion

Web3 payments use blockchain technology and decentralised currencies for financial transactions, money management and user authentication.

These applications enable businesses to receive crypto payments, allowing them to reach more customers, expand their operations, and consequently boost their revenue streams.

Adopting web3 payment systems requires thorough research to find a reliable provider. Then, you can add more features, configure interfaces, and increase the users’ payment options to improve their experience.