How to Pay Using Cryptocurrency

Released on

Apr 21, 2020

Now that you know what cryptocurrency is, the next question is: how do you use cryptocurrency? Just like the US dollar, euro, or any other local currency you can think of, cryptocurrency can be spent in exchange for goods and services.

This means that you can pay for goods and services using cryptocurrencies such as bitcoin, ether, litecoin. This guide will show you exactly how you can start paying using crypto.

Key Takeaways

  • You can use cryptocurrency to directly pay merchants who accept them, through transferring to their crypto wallets
  • Using a bitcoin card or crypto card, you can pay any merchant internationally even if they do not directly accept cryptocurrency
  • Paying using cryptocurrency is not limited to just merchants, you can pay individuals by sending cryptocurrency to their crypto wallet address
  • Benefits of paying using cryptocurrency include cheaper international transfers, increased visibility, and user autonomy
  • Cons of paying using cryptocurrency include technical involvement (when not using a crypto card) and the risk of irreversible mistakes

Where and how can I pay with cryptocurrencies?

All currencies have limitations for where you can use them, for example, you may not be able to pay using euro when buying a bowl of noodles in China, and Thai baht is not accepted when buying a shirt in the United States.

Similarly, when paying using cryptocurrencies directly, you can only pay at specific merchants that accept cryptocurrencies. Increasingly, companies and stores all over the world are warming up to cryptocurrencies, especially bitcoin. Here are some popular merchants that accept bitcoin as a payment method:

  • Bic Camera (Japan)
  • Burger King (Venezuela)
  • Twitch (International)
  • T-Mobile (Poland)
  • Stripe (International)

To pay directly to these merchants, most often you will need to transfer your cryptocurrency from your wallet to the merchant’s wallet.

There is a simpler and more convenient way to pay using cryptocurrency, which we will explore next.

What is a crypto card and bitcoin card?

A crypto card or bitcoin card is the simplest way to pay using cryptocurrencies, and you can pay at a wider range of merchants.

This is because it typically uses an existing payment network such as Visa or Mastercard to process your payment, with the crypto card company acting as the middleman and helping you convert from cryptocurrency to cash.

The TenX Visa Card, for example, makes it possible for you to spend bitcoin, ether, and litecoin at more than 54 million Visa merchant locations in over 200 countries.

How does the TenX Visa Card work?

Similar to a debit card that is connected to a spending account, the TenX Visa Card lets you spend your crypto balance in the TenX app. To pay, simply top up your account and use your card to pay as usual: tap, swipe, or pin and chip.

Your crypto is automatically converted when you are paying, so your merchant receives local currency. This means that you can pay at any store that accepts Visa, even if they do not actually accept cryptocurrency.

How can I pay individuals using cryptocurrencies?

Paying using cryptocurrency is not limited to just merchants, of course, you can also pay individuals such as friends, family, or a work freelancer using cryptocurrency. You would pay them by sending the amount of cryptocurrency to their crypto wallet.

To do this, you will need to get their cryptocurrency wallet address. Make sure to check that:

  • You have gotten the complete and accurate wallet address
  • The crypto wallet supports the specific currency you are sending

Pros & cons of paying with cryptocurrencies

Benefits of paying using cryptocurrency

  • Easy and cheaper transfers internationally
    Because cryptocurrency is not tied to any country’s local currency, transferring crypto across borders is easy, and transaction fees for international payments are typically lower since there are no foreign exchange fees
  • Full visibility over transfers
    You can use blockchain trackers such as Blockchain Explorer or Etherscan to check the status of your transfer, it is completely transparent
  • User autonomy
    You can transfer your cryptocurrency to whomever you want, anytime you wish. Because it is not held by an intermediary like a bank, you have more control over your cryptocurrency

Cons of paying using cryptocurrency

  • Technical steps involved
    Unless you are using a crypto card like the TenX Visa Card, there are some technical steps involved with paying using cryptocurrency
  • Irreversible mistakes
    You will need to be extra careful as cryptocurrency transfers are irreversible, so more precautions are needed, such as making sure that the wallet address you are transferring to is absolutely correct