With the wide variety of options to start accepting cryptocurrency payments as a merchant for your (online) store, you might wonder what the right option is. The ease to integrate the payment solution into your store is a big consideration; the other might be pricing. The moment you start accepting cryptocurrency payments, what happens with the funds after your customer made a purchase? Do you get the full-share or is there a fee to be paid, second question, who pays these fees, your customer or the store itself? To answer all these questions and come up with a solution, we’ll zoom in on NOWPayments and explain how we manage to remain free of any additional fees.

First Off, What Is NOWPayments Exactly?

Simply put? A way of accepting cryptocurrency payments. Nothing more than that. We have created an incredibly easy way of accepting cryptocurrencies in your (online) store with the help of NOWPayments. It allows you to accept a wide variety of cryptocurrencies that ranges further than just Bitcoin and Ethereum. The processing is handled by NOWPayments, besides that, the funds never end up in our wallets. We do not have access to any of the wallet the merchant has selected, nor will we ever be able to do so. This means we’re 100% non-custodial, making sure that what’s yours, is really yours. To top all of this off, we do not charge any fees for payment services. We believe in bringing the ease of using cryptocurrencies and accepting it as a form of payment should be possible to anyone. We do not want to charge anyone for supporting this cause, so we found a different solution to this. Let us explain how. 

What Happens After a Purchase Is Made?

Let’s assume you have decided to start accepting cryptocurrency payments, you installed NOWPayments on your online store and you have decided which currency you would like to accept. You are good to go. Your customer arrives at the check-out phase of your store and sees the possibility to pay using cryptocurrencies. They decided to use Litecoin as a form of payment, yet you only accept Bitcoin payments yourself. At this moment, our customer can simply finalize the payment using Litecoin, while the NOWPayments back-end does the rest of the work. With the help of the ChangeNOW instant crypto swaps, these Litecoins will be exchanged for Bitcoin on our partnered exchanges;

Binance

As one of the most dominant exchanges in the industry, Binance is also leading with trading volume and liquidity. With an incredible range of products offered on the exchange, all coins offered as a form of payment within the NOWPayments solution, are listed on the Binance exchange. Binance has a strong reputation of being trustworthy, efficient and in our case, have reliable and efficient APIs to connect with.

Bitfinex

Serving as one of the prominent top-tier exchanges out there, Bitfinex has been around for several years now. After successfully introducing their version of a stablecoin, Tether, also known as USDT, Bitfinex has definitely made a name for itself and their exchange. As one of the major exchanges, it also means that there’s a great variety of projects listed on this exchange, together with a good amount of liquidity and trading volume. Where Binance focused more on attracting masses of new users, Bitfinex remained solely accessible to traders with big portfolio’s for years, after opening up only recently to anyone. 

Huobi

One of the longest-lasting exchanges alongside Bitfinex is Huobi. It serves a great portion of the Asian markets with offices in all major cities in Asia. With being one of the biggest exchanges out there, comes great liquidity and volume. Huobi strives to serve its clients in the best way possible, which can be noticed from their great service surrounding their APIs and other services. 

With these three top-tier exchanges, NOWPayments has the possibility of handling each and every payment request at any moment. As we all know, the cryptocurrency market never closes, allowing purchases and transfers to occur momentarily. Whenever a purchase is made at the store of a merchant, the NOWPayments mechanism connects to one of these exchanges to transfer the currency that’s used to pay into the desired currency. In the case above, the Litecoin is exchanged for Bitcoin. NOWPayments has provided the following example explaining the mechanism;

“NOWPayments is a completely zero-fee service. However, other fees (such as network or exchange fees) might be applied.

Let’s say your customer would like to make a $20 purchase. They would like to pay you in ETH, while you’re accepting your funds into a BTC wallet. The ETH to USD rate is $171 per 1 ETH. Therefore, the customer would pay 0.11695906 ETH, while you would get 0.0031984 BTC with all the exchange and processing fees, as well as a network fee for the instant fund transfer to your wallet, already subtracted.” 

All the rates are as of 04/11/2019. The rates as of now may drastically differ.

So How Does NOWPayments Make Money?

Of course, the company behind NOWPayments has to generate any form of income in order to remain sustainable as a company, increase the current products and create new solutions to strive for decentralization all around. The way this happens is during this process of transferring one fund to the exchange in question and exchanging it for the other currency, NOWPayments takes a small piece of the pie during these trading spreads. This method allows the merchant to have minimal differences between the amount paid by the buyer in the store, and the actual amount the merchant receives in his/her wallet. The only fees that are extracted from the price paid during the purchase in the store are the network fees and exchange fees, the NOWPayments piece of the pie is paid by covering the trading spread in an efficient manner to cover our costs and stay away from additional fees. 

We hope that the system behind NOWPayments is a bit more clear now our reasoning behind not asking for any additional funds is clarified. We are always looking for ways to improve our current system, are always open for feedback and can’t wait to get in touch! Do not hesitate to reach out at [email protected], we are more than happy to speak to you!