How Binance Pay works and why to connect it to the website

Binance is one of the largest and most well-known crypto exchanges in the world, with millions of people using its services daily. From P2P transfers to currency exchanges and simply storing cryptocurrency on your balance, Binance offers it all. The exchange is regulated in many countries, collaborates with governments, and actively participates in the development of crypto and fintech across entire continents.

It's no surprise that Binance's latest development has quickly caught the attention of industry professionals and regular users too. We're talking about Binance Pay, internal payment system that enables online shopping with cryptocurrency payments in a way that we usually do with traditional money.

Today, we will discuss the fundamentals of this product and how it applies in modern business, gaining popularity in the iGaming sector as well. Why so? Let's explore together with Monoup experts.

What is Binance Pay?

Binance Pay is a payment method developed by cryptocurrency exchange Binance that offers contactless and instant cryptocurrency transactions worldwide. This internal payment system allows users to spend cryptocurrency conveniently and quickly for everyday purchases on regular websites.

Binance Pay is essentially a wallet within a wallet, enabling users to make payments on fiat websites using cryptocurrency as the source of funds. This means that with USDT or Bitcoin on your crypto balance, you can make a purchase on a website in traditional currencies, such as euros or dollars. The corresponding amount of cryptocurrency will be deducted from your balance at the internal exchange rate.

Binance Pay works for both individuals and businesses. Any verified user of Binance exchange who has access to this payment method can use it to make payments to friends or family. Funds can be transferred via QR code, payment link, or using client's ID in the system. The logic is somewhat reminiscent of PayPal, which is a plus for most users already familiar with its infrastructure. With Binance Pay, you can also buy gift cards from platforms like Amazon or Google, top up your mobile phone, and even receive crypto cashback for these purchases. Cashback is available for purchases in stores and services that support this feature.

For merchants, appeal of Binance Pay lies in its ease of use. Payment process designed simpler than manually transferring cryptocurrency from one wallet to another. Despite modern processors implementing all the necessary UX features, some users still find it challenging to make transfers to crypto wallets. They may make mistakes when copying or manually entering wallet address, amount, or at other stages. To avoid this, Binance Pay uses a QR code, which has already proven effective in other payment methods worldwide. The main advantage is that nothing needs to be entered manually; all happens automatically.

How to integrate Binance Pay for merchants

To accept payments via Binance Pay on your website, you first need to be a client of Binance exchange and have a verified merchant account for your company. This allows you to connect directly by submitting an online application through the official website and undergoing verification. An alternative option for merchants is to work through a licensed partner — a third-party payment system or aggregator that has access to the technology and has signed a cooperation agreement with Binance.

KYC verification process for this service is practically the same as any compliance in a payment system or bank. The goal is to verify your business's legitimacy and honesty towards users. Once all your documents, website, and other details have been reviewed, you will receive necessary integration details and can start accepting payments via Binance Pay on your website. 

Pros and Cons of using Binance Pay

So, as we already know what Binance Pay is and how to integrate it, let’s see another important point. Which is to analyze payment method from a practical standpoint, both for merchants and payers. Before starting the integration, it's crucial to thoroughly understand basics of the payment flow, fees, and fundamental pros and cons of potential cooperation.

Taking into account pros, we would suggest:

• Security and speed of transactions: The entire process is integrated into the Binance platform, and payment solution is only available to verified users in mostly low-risk countries. This ensures a high level of security and helps avoid unnecessary fraudulent attacks. The anti-fraud mechanisms and two-factor authentication built into Binance Pay also enhance trust in their service.
• Fast and efficient payments due to the absence of intermediaries and simplicity of the process. As you already know from our other articles, the traditional payment process involves many participants, each playing own role. On one hand, this ensures quality execution of all functions and market competition. On the other hand, it affects the speed and sometimes complexity of transactions. All intermediary communication takes time, but with Binance Pay, there are no intermediaries since payment is initiated and processed inside the same system.
• Innovative payment method that allows users to utilize their cryptocurrency in everyday life. Many traders and crypto enthusiasts have accumulated crypto in their wallets, but its usage has been limited for long time. With Binance Pay, there's no need to search for alternatives; you can pay for purchases on your favorite websites directly from your crypto balance, just as conveniently as with a credit card.

All this together creates a quality payment experience that you want to return to, which is proven by growing number of users.

But what about the downsides? Of course, there are some, too, and for a comprehensive review, we will include them as well. This can be:

• Platform fees: The primary drawback is platform's charges, which can make you think twice about using this payment method. Fees are unstable and can fluctuate depending on network load, type of cryptocurrency used, and the fiat currency of your payment. Depending on payment size, fees can be significant in percentage.
• Volatility of crypto: Although not Binance Pay is responsible for that, you may want to consider it. Crypto rates can change not just daily but every second, as all crypto users know. Using stablecoins like USDT or USDC can help mitigate rate differences, but fees should still be considered.
• Limited applicability: Payment method's widespread is currently limited, and not every merchant accepts Binance Pay. Therefore, it's too early to talk about its universal use.

In some way, Binance Pay is an analog to existing crypto cards that allow fiat payments from crypto balances or top up crypto balances by exchanging traditional money instantly. In both cases, provider earns on exchange rates and fees built into payments. These may not always be the most favorable for the user, but payment method still wins with convenience.

However, we might expect when Binance Pay becomes more widely adopted, service fees will decrease, and its use will become easier.

For more detailed reviews of payment methods, visit “Payments” section of Mono Talks blog, also for other materials please search in the relevant topics. Use the clickable tags to search for information of your interest. Stay connected!