It's no secret that cryptocurrencies have taken the financial landscape by storm. More and more customers are embracing digital currencies for their purchases, and as a forward-thinking business owner, you don't want to miss out on this lucrative opportunity to attract new customers and incentivize the existing ones. However, the exorbitant gas fees associated with crypto transactions cause huge concerns, on the one hand discouraging your customers from using cryptocurrencies and, on the other, eating into your hard-earned revenue and neutralizing the advantageous effects of accepting cryptocurrencies.
Anyway, don't fret, because for every problem, there is a solution, and this article will unveil the ultimate solution to keep accepting crypto payments without you or your customers incurring heavy fees on deposits and withdrawals.
Understanding Gas Fees in Cryptocurrency Transactions
Gas fees are fees paid to the network validators of a particular blockchain to ensure that your transaction is approved and added to blocks. Basically, it is a fee paid to “fuel” your transaction and ensure it moves, just like your automobile would need some gas to move.
In the world of blockchain technology, several blockchain networks exist, each with its own underlying algorithm that determines the validation process and fees. Hence, all blockchains have varying confirmation times and fees charged. However, because of their differences in makeup, it is more expensive to make transactions on some blockchains than others.
Below are some factors that determine how expensive crypto transactions on a particular blockchain could be:
- Network Congestion: Network congestion plays a significant role in gas fees. The more people need the services of validators on the blockchain, the more fees it will cost. Due to the competition during times of congestion, validators set higher “unit gas prices,” and this causes gas fees to be astronomical. Think of it as trying to go home during heavy road traffic; you’ll spend more time on the road and consume more fuel and other resources.
- Transaction Complexity: The complexity of transactions also matters in estimating gas fees. Smart contract calls are typically more expensive than basic sending and receiving. However, this is good news for you as an e-commerce entrepreneur; your customers won’t have to pay premium fees to pay you money since e-commerce transactions basically involve sending and receiving, which only consumes little computational energy, unlike other transactions.
- Blockchain Consensus Algorithm: A blockchain’s makeup can also determine how difficult it is to validate a transaction; the higher the difficulty, the more computational power used, and by extension, the more gas is used. Hence, Proof-of-Work blockchains like Bitcoin and Ethereum cost more than their counterparts across other blockchain algorithms.
- Blockchain Type: We can segment blockchain types into Layer-1 and Layer-2 blockchains. Layer-1 blockchains are self-dependent; they do not require another blockchain to finalize their transactions; however, layer-2 blockchains depend on Layer-1 blockchains to finalize their transactions.
Layer-2 blockchains were created for speed and cheap fees. Hence, they can confirm transactions speedily and allow you to move ahead while the transaction is finalized on the mainnet layer-1 blockchain later.
For example, Ethereum is a Layer-1 blockchain, while Arbitrum, Optimism, and Polygon are Layer-2 blockchains built to scale Ethereum. Although Ethereum can stand alone, the other 3 depend on it for finality; however, they facilitate speed and cheap fees.
With all this information in mind, you can make smart choices about accepting crypto payments for your business without incurring heavy fees for yourself or your shoppers.
How To Avoid High Gas Fees For E-Commerce Crypto Payments
For the purpose of this article, we’ll briefly outline how you can reduce the gas fees you and your customers incur to a minimum.
Tips for reducing gas fees for customer payments:
Use Multi-chain Coins For Payments: Multi-chain coins are cryptocurrencies that are available on several blockchains. USDT and USDC are good examples. With these kinds of coins, your customer can investigate the fees on all available blockchains before making a choice.
For example, as seen above, the cost for your customer to make a transaction of 1,000 USDT on the Ethereum network (ERC-20) is over $4; however, the same transaction costs $0.05 on the Polygon network. These choices make it easy for your customers to choose a blockchain network without congestion and fees and pay cheap fees to process transactions.
Accept Several Cryptocurrencies: Accepting several cryptocurrencies is another way to ease the process for your customers. With the privilege of choice, your customers can avoid ones that demand too high fees or have high network congestion at the time.
Accept Layer-2 Cryptocurrencies: As mentioned earlier, Layer-2 blockchains process transactions quicker; hence, not restricting your E-commerce checkout page to Layer-1 cryptocurrencies like Bitcoin, Doge, or Ethereum but also considering the likes of Polygon and Arbitrum is an excellent way to reduce the fees your customers will incur, and encourage them to make crypto payments on your website.
Tips for reducing gas fees for Merchants
Many crypto wallet services charge deposit and withdrawal fees, among other fees, for using their service. However, this isn’t optimal for you as a business owner. It’s not just the fees; merely using a crypto wallet service without dedicated e-commerce buttons for payments will make the process more strenuous for you and your customers, costing you time and money, This is why you should use a crypto payment gateway.
Using a crypto payment gateway like CCPayment allows you to customize your checkout page, selecting your preferred cryptocurrencies from 45+ Layer-1 and Layer-2 cryptocurrencies without any deposit or withdrawal fees. You can also execute free swaps to stablecoins and other cryptocurrencies to lock in your profits or invest in your choice cryptocurrencies.
Typically, all of these services on other service providers will cost you around 1% in service fees to process your payments; however, CCPayment charges an industry-low fee of 0.03%, ensuring that you can process your payments without breaking the bank!
Other benefits of CCPayment include:
- Intuitive UI
- Customized checkout page
- Easy API Integration for Businesses
- Accounting Tools for Managing Your Business
- Invoice tool to generate virtual invoices for
- Military-grade encryption and security
Don't let high gas fees dampen your business growth and customer satisfaction. Take the leap, integrate CCPayment, and enjoy the benefits of cost-effective transactions, streamlined financial management, and a diverse range of supported cryptocurrencies.
Take action! Get started with CCPayment and embark on a new era of seamless, cost-effective crypto transactions.