How Crypto Payment Processors Turn Coins Into Card Payments
Crypto payment processors sit between your wallet, a card and the merchant. This page explains how they authorize, convert and settle payments — and which fees and risks are hidden in the flow.
Explore Crypto & Web3 Cards hubWhat Is a Crypto Payment Processor?
A crypto payment processor is an intermediary that lets merchants accept crypto or crypto-backed card payments without holding coins themselves. It connects:
- Customer wallets – where crypto is held or funded
- Cards or payment tokens – used at physical or online terminals
- Merchants – who usually want settlement in fiat currency
- Banks and card networks – that handle final fiat settlement
The processor handles price quotes, on-the-fly conversion, risk, compliance and merchant payouts, so the merchant sees something that looks like a normal card settlement.
How a BitPay-Style Payment Flow Works
1. Quote & Price Lock
The processor generates a payment request or invoice in crypto, based on the fiat amount the merchant needs. A short time window locks the rate, often with a small spread added.
2. Authorization & Confirmation
The customer either:
- pays directly from a wallet (on-chain or via a supported network), or
- uses a crypto-linked card that triggers a conversion in the background.
Once the transaction is seen and meets confirmation criteria, the processor marks the invoice as paid.
3. Conversion & Settlement
The processor converts crypto to fiat (or to stablecoins) and settles funds to the merchant’s bank account or merchant wallet, usually minus processor fees.
Key Risks & Considerations
Crypto payment processors simplify the experience, but introduce some moving parts that users and merchants should understand:
- Rate risk: volatility between quote and confirmation can cause gains or losses.
- Fee structure: spreads, network fees and processor charges can stack up.
- Regulation: KYC/AML rules apply to processors, card issuers and sometimes merchants.
- Reversals & chargebacks: crypto itself is hard to reverse, but card rails may still support disputes.
For everyday spending, it’s important to weigh convenience against total cost and complexity.
How Crypto Processors Compare to Traditional Acquirers
| Aspect | Crypto Processor | Traditional Acquirer |
|---|---|---|
| Settlement Currency | Crypto, stablecoins or fiat | Fiat only |
| Volatility Risk | Managed via spreads, short lock windows | No crypto volatility, FX risk only |
| Network & Rails | On-chain + card or wallet rails | Card networks + banking rails |
| Fee Structure | Processor fee + spread + network fees | Interchange + scheme fees + acquirer margin |
| Customer Experience | Pay with coins or crypto-backed card | Pay with traditional debit/credit card |
For structured comparisons of card products that interact with crypto, visit the Crypto & Web3 Cards hub at Choose.Creditcard .
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Part of The CreditCard Collection
BitPay.Creditcard is part of The CreditCard Collection — a network of narrowly focused minisites by ronarn AS. Each page explains one aspect of card or payment design in plain language, then links back to structured comparison hubs.
We do not issue cards or operate payment processors. Content here is informational only, based on typical patterns and public documentation. It is not financial, investment or tax advice.
This microsite is connected to the Crypto & Web3 Cards hub on Choose.Creditcard. Educational only – not an endorsement of any asset, wallet or processor.
Ready to Explore Crypto-Linked Cards?
Use BitPay.Creditcard to understand how processors bridge crypto and card rails — then move to the main hub to see how different card types and technologies fit together.
Go to Crypto & Web3 Cards hub