Cryptocurrencies are used in an increasing number of areas: digital money is utilized for investments, household transactions, payment for goods and services. One of the uses of cryptocurrencies is to collect donations. According to the platform The Giving Block, in 2022, the volume of cryptocurrency donations through the service amounted to $125 million. By the end of 2032, this figure is projected to grow to $10 billion.
In the article we will tell you what are the advantages and disadvantages of accepting donations in cryptocurrency, what are the ways of accepting digital donations and how to start fundraising on your website.
Donations in Cryptocurrency: Main Advantages
On The Giving Block platform alone, the number of charities accepting donations in cryptocurrency exceeded 1,000 in 2022. The reason for such popularity is a number of advantages:
- Low fees. On average, crypto processings charge 1-2% for transaction processing. Fiat payment processing fees are much higher, especially for cross-border transactions.
- Larger donations. According to analysts' estimates, crypto holders tend to donate larger amounts. The average cryptocurrency fee on The Giving Block was $26,000, and the largest donation exceeded $9 million. The average cryptocurrency donation processed by BitPay in 2021 was $4620.
- Audience expansion. The use of cryptocurrency allows transactions to take place around the world without restrictions or delays. Crypto transactions are not subject to sanctions, and you don't have to wait for a bank response to confirm the transaction.
- Adding a new way to make payments. Having multiple ways to make transactions is an important factor for increasing conversion.
Cryptocurrency is a payment method that is gaining popularity, especially among the young audience. Accepting donations in cryptocurrency allows you to attract potential donors and provide users with a convenient payment option.
- Privacy. Cryptocurrency transactions are completely anonymous. This allows you to maintain confidentiality when sending donations. Personal and payment information is not stored in any database, which excludes data leakage even in case of hacking.
Risks and Concerns of Charities
While accepting cryptocurrency has a number of advantages, many charities remain cautious about using this method of payment. Forbes researchers highlight the following disadvantages:
- uncertain legal status — crypto transactions still remain in a «gray zone» in terms of legislation, which is a concern for 63.3% of respondents;
- technical difficulties related to accepting donations on the website — 60% of foundations are not ready to spend their resources on this;
- difficulties with reporting — this reason was mentioned by 53.3%.
Despite the above factors, more and more foundations are using cryptocurrency in charity. Among the successful examples is the Gift of Life Foundation, which has been accepting donations in cryptocurrency since 2015 through its American sister foundation Podari.Life.
Major Ways of Accepting Payments
There are two main ways to accept donations online: directly to a cryptocurrency wallet or through a special service. Let's consider the advantages and disadvantages of both options.
On the wallet
Accepting donations directly through the wallet is the simplest option in terms of technical execution: it does not require the connection of additional services and integration of third-party payment forms to the website. Nevertheless, it should be taken into account that this method requires manual transaction processing: the donor must contact the owner of the fundrise to receive the address for sending money.
Through crypto processing
A payment system is an opportunity to automate the processing of cryptocurrency transactions and simplify the procedure for both sides of the operation. The system integrates into the website in the form of a convenient button, which increases conversion rates and eliminates the need for the foundation to process transactions manually. A number of services allow to receive and withdraw funds not only in cryptocurrencies, but also in fiat.
Accepting Donations in Cryptocurrency: Getting Started
To start accepting cryptocurrency donations, you need to follow a few simple steps:
- Create a cryptocurrency wallet. There are many services that provide this service. As a rule, an email is required to create an account, some systems also require additional identification.
- Create a donation button. There are two main ways: use a QR code that contains the cryptocurrency wallet address, or create a button with an integrated link. Users only need to scan the QR code or click on the button to make a donation.
- Integrate a new payment method. The QR code or button with a link is added to the website. A description, blog post, newsletter, etc. will help to attract the attention of potential donors to the appearance of the new function.
- Convert cryptocurrency into fiat. When working directly through a wallet, this must be done manually. Payment services may have an option to withdraw funds to fiat without the need for manual conversion.
When converting, the volatility of the cryptocurrency should be taken into account. In some cases, the safest option is to convert cryptocurrencies to fiat immediately after receiving a donation.
Creating a Permanent Payment Link
Using a permanent payment link is an opportunity to automate the acceptance of donations in cryptocurrency and provide donors with stable access to a convenient payment page. The foundation does not need to manually process transactions or issue invoices.
Let's consider the process of accepting donations via a link on the example of CryptoCloud service. After generating a link and placing it on the website (as a text link or as a button), the payment process is as follows:
- The client clicks on the link and enters the amount (in fiat currency — USD) that is going to be donated.
- The system automatically generates an invoice for the specified amount and redirects the client to the payment page.
- The client selects a suitable cryptocurrency and network.
- The system calculates the amount to be paid taking into account the fee and provides a QR code or wallet address for the transaction.
- The payment is confirmed automatically and the funds are deposited into the project account.
The invoice page can be customized: the owner can upload the logo of the company, foundation or project. The logo will be displayed on the amount and checkout page.
The payment link can be converted into a QR code to accept offline donations. The donor can scan the code to be automatically redirected to the amount entry page.
Benefits of CryptoCloud for Accepting Donations
CryptoCloud is a crypto processing that can be used to accept donations in cryptocurrency. There are several advantages of using a transaction processor:
- User-friendly interface. The service provides a convenient checkout and simple payment procedure, which increases conversion rates.
- Ease of integration. Creating an account in the system and generating a payment link takes a few minutes and does not require going through the verification procedure.
- Provision of several payment currency options. The service supports major cryptocurrencies and stablecoins.
- Free connection and low commission. The platform's commission for processing the transaction is from 0.4%. Its payment can be transferred to the buyer in the project settings.
- Fast withdrawal of funds. Donations can be received in just a few minutes. The commission for withdrawal is 0%.
- Security and stability of work.
Receiving Donations with CryptoCloud
Accepting donations in cryptocurrency is an opportunity to expand the list of potential donors, provide users with an additional payment method, ensure the security of personal data and avoid restrictions associated with international transactions.
It is possible to automate the receipt of cryptocurrency donations with the help of services such as CryptoCloud. The system allows you to use a permanent link and convenient checkout, quickly withdraw received funds and work with major cryptocurrencies. Learn more about the service's features on our website.