Connecting Your Wallet - The Next E-Commerce Move
For years, the question “What’s in your wallet?” has been a reference to Capital One Bank. Nowadays, the catchy slogan has adopted a whole new meaning as we shift from debit cards and Apple Pay to cryptocurrency and NFTs. In this article, we’ll walk you through everything you need to know about digital wallets and why allowing your customers to connect them will be a game-changer for your business.
Custodial vs. Non-Custodial Wallets
There are two main types of wallets when it comes to cryptocurrency. The majority of eCommerce platforms allow users to use whichever one they’re most comfortable with, so you don’t have to worry about setting your site up for one vs. the other. In the long run, the difference between these two wallet types is how much responsibility a user wants to have in the security of their wallet.
Custodial wallets are best for consumers who like to “set it and forget it.” With a custodial wallet, a wallet service such as Coinbase or Kraken creates the wallet for users and keeps hold of the private security key. This means the service is responsible for the security of the assets inside the wallet. The great part about this is that in the case a user forgets their password, they can simply request a reset, verify their information, and regain access to their funds. With custodial wallets, there are less advanced features and are overall very user-friendly - perfect for newcomers to the crypto world. When users want to make a purchase with a custodial wallet, they simply enter the address of their wallet, and the wallet service “signs off” on the transaction using the private key.
Non-custodial wallets are perfect for those who consider themselves experts. With these wallets, the user has complete control over their private key and their funds. These wallets tend to be more complex technically, so they’re not recommended for those who are just purchasing their first round of Bitcoin. On the bright side, this means the wallet is incredibly secure. Users have a significantly lower risk of being hacked and having assets stolen. At the same time, this means that if a user loses their private key and recovery phrase, they lose their funds as well. Non-custodial wallets typically come in software and hardware format. Software formats encrypt private keys on a computer’s hard drive, while hardware formats are stored on a USB drive. Which one a user chooses comes down to personal preference.
Preparing Your Site for Wallet Connections
Why should you start accepting crypto as a form of payment on your site? Isn’t it risky? The answer here is no! Accepting crypto as a payment method can be incredibly beneficial for you as a business owner. With crypto, you eliminate the risk of chargebacks, which in turn gets rid of the possibility of eCommerce fraud. This doesn’t mean that you can’t process refunds for customers who request one. It simply means that customers can’t file chargebacks with their credit card companies as a way to get their money back after receiving their items. Any cryptocurrency transaction can only be reversed with your consent.
Want another bonus? Accepting crypto as a form of payment gets rid of high transaction fees since you don’t need a middleman to process the transaction. Crypto processing fees tend to sit between 0% and 1% depending on the sales volume. This may not sound like much of a difference, but it’s significantly better than the average fee of 3% that most companies charge for credit card processing, especially if your eCommerce storefront sees a high volume of transactions each month.
The great news is that most eCommerce platforms have already prepared themselves for wallet connections! All you need to do is integrate your storefront with one of your platform’s chosen payment processors. For most platforms, that will look like going into your payments section, selecting “add a new payment method,” and then selecting your processor of choice. For others, you may have to head into your host’s application marketplace and integrate a processor from there.
Is your eCommerce platform behind the curve when it comes to Web3 and crypto? Don’t panic. Now is the time to reach out to your web developer friends and head down the route of custom integrations. The majority of providers have API documentation that will allow developers to add custom buttons to your checkout page. You’ll have to pay the web developer for their time, of course, but the revenue you’ll make back by being ahead of the game is priceless.
Keep In Mind…
The most important thing to remember when integrating cryptocurrency as a payment option is that security is now your top priority. Every transaction on your site needs to be as secure as possible to protect your business and your customers. The best practice is to ensure that you’re keeping your site and your integrations up to date so that your payment processor has the latest security protocols. You should also ensure that you’re using a strong password for your website and everything connected to it. This seems like common sense, but using a complex passphrase can reduce your risk of being hacked, and therefore reduce your chances of your customers’ wallets being exploited.
Are you ready to elevate your brand’s marketing strategy and take the leap into Web3? At Fifth & Cor, we’re here to help! Let us set you up for success in all things Web 3.0, social media, and the metaverse so you can remain one step ahead of your competitors. Ready to get started? Take a look at the services we offer and the results we’ve produced. Then simply fill out a form to get started!