Cryptocurrency payments transfer digital assets using a blockchain or related network. The cost and time depend on the asset, network, wallet, exchange, congestion, and whether a merchant or intermediary converts the payment into traditional currency.

The main cost components

• Network fee: A fee paid to process a transaction on the chosen blockchain. It can vary with network demand and transaction complexity.
• Exchange fee: A platform may charge for buying, selling, or converting crypto.
• Spread: The quoted buy and sell prices may differ.
• Deposit or withdrawal fee: An exchange or wallet provider may charge to move assets into or out of the service.
• Conversion and payout cost: A merchant may incur costs converting crypto to fiat currency or transferring proceeds to a bank account.
• Refund or volatility exposure: The amount returned may depend on the asset's value, network, provider rules, and refund policy.

Do not compare only the blockchain network fee. Calculate the total cost from funding to final receipt.

Stablecoins are not the same as bank money

Stablecoins are designed to track a reference asset, often a currency such as the US dollar. They can still carry issuer, reserve, redemption, platform, regulatory, and blockchain risks. A stablecoin's target price is not a guarantee that every holder can redeem at that price at all times or in every jurisdiction.

Confirm the network and address

Some assets operate on multiple networks. Sending an asset to an incompatible address or selecting the wrong network can lead to delayed or lost funds. Verify the address, network, asset, and destination instructions before confirming a transaction. Start with a small test transfer when appropriate and practical.

For merchants

Consider settlement options, volatility exposure, custody, accounting, refunds, sanctions screening, fraud controls, and applicable regulation. A processor that accepts crypto may convert it automatically, but the terms and fees differ by provider.

Bottom line

Crypto payments can enable new settlement options, but total cost includes network, platform, conversion, and operational factors. Review the provider's fee schedule and risks before transacting.

Sources and further reading

• Canada.ca: Crypto assets

This content is educational, not investment advice. Cryptocurrency transactions may be irreversible and may not have the same protections as card or bank payments.