Are Crypto Payments Secure?

Whether you like it or not, crypto payments are happening. The market is adjusting to overcome the pitfalls of blockchain-based payments. Volatility in tokens like Bitcoin and Ethereum was often cited as a barrier to adoption. A Forbes article, argued that “volatility” as one of the main reasons for Expedia Group's decision to discontinue crypto payments in 2019. However, “crypto-maxis,” often infuriated by the prehistoric volatility argument, knew that this issue had been solved, and the market would soon respond. The first stablecoin was introduced 10 years ago, but adoption lagged. Today, stablecoins are rapidly overtaking Bitcoin’s market share in payments. CoinGate wrote that “in 2023, Bitcoin accounted for 35.6% of all transactions processed through CoinGate, a notable decrease from 54.8% in 2021. In contrast, stablecoins like USDT gained popularity, jumping from 15.1% in 2022 to 25.4% in 2023, indicating a shift towards stablecoins for their stability and reliability.” Volatility is no longer a reason to avoid crypto payments.

Still, the question remains: are crypto payments secure? In my opinion, two areas continue to pose major risks to merchants: holding tokens and smart contract vulnerabilities. Most merchants won’t be running complex blockchain applications—whose vulnerabilities have resulted in heavy industry losses and led media headlines—so I will focus on the risks of holding crypto and a possible solution.

Maintaining a large balance of cryptocurrencies could increase the risks of fund theft and also involve complicated processes for the novice merchant. Phishing and other social engineering attacks could lead to losses of six, seven figures, or more... All it takes is an inexperienced employee with access to a merchant’s wallet for an attack to occur. A link with malicious payloads could be clicked, devices with access to crypto funds could be stolen, or the keys to a wallet could be lost. This list is not exhaustive, but it does show there are inherent risks in using such technologies. Larger balances are often secured by multi-signature wallets, across a multitude of wallets, or even with custodial partners that “promise” to outperform the merchant. However, these security measures may not be the fastest or easiest to implement and maintain. Merchants, who may be interested in the savings and speed of crypto payments, are ultimately incentivized to grow their core business, not to build a blockchain stack.

For some merchants, these risks and processes may be too much, and crypto payments may not be “worth it.” However, I argue that merchants do not need to be involved in these processes to benefit from the low costs and fast transaction times that crypto offers. Merchants just want to get paid. And for most, that means seeing a payment clear in their bank account. Converting crypto to fiat again is not always a straightforward process, could increase risk, and involve high fees. Again, merchants just want to get paid. To move beyond this point in adoption, credible and secure partners have to take that risk off the merchants.

At Shield , we abstract all these risks and complicated processes away from the merchant. Our merchants see a wire in their bank account in one day or less at a 1% fee or lower when they accept crypto with Shield Secure Payments. They do not need to see or touch any cryptocurrencies to be part of the future of payments. Our clients get the benefits while lowering risk. One of Shield’s clients captured an additional $200,000 of business in their first two months of integration. They saw an increase in business from countries with faulty banking systems and currencies that result in high fees. At Shield, we simplify accepting crypto as a form of payment.

My bet is that we will continue to see increases in stablecoin payment adoption. The rise in global commerce and connectivity demands a payment solution that is fast, secure, and cheap. Stablecoins can become this option with the correct infrastructure and processes. It is not a question of “if,” but “when?” Don’t miss the opportunity to join the future of payments.