How crypto payment processors convert to dollars
A crypto payment processor receives your customer's crypto, sells it, and deposits US dollars into your bank account. You finish KYC first.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
On this page
- Finish KYC and link a bank account first.
- Check the coins and networks it supports now.
- Settlement can be instant, daily, or held back.
- Crypto payments are income at the dollar value.
Crypto payment processors convert to dollars on your behalf, so you do not trade on an exchange yourself. Each payment lands in a wallet the processor controls, and the dollars go to the account you linked.
How does the conversion work?
Customers pay into a wallet the processor controls. The processor sells those coins for US dollars through an exchange or a liquidity partner and sends the dollars to your linked bank account. It locks the exchange rate at checkout or converts as soon as the crypto arrives, so price swings do not change what you receive.
What should I set up first?
Open an account with the processor before you accept a payment. It verifies your identity through KYC, as US anti-money-laundering rules require. Then link the bank account that receives dollars and pick USD as your settlement currency.
What are the steps in order?
The processor handles the crypto side, so the part that varies is settlement timing. Your account may settle right away, once a day, or after a hold period.
- 1Create the invoiceThe processor generates an address or invoice for the amount you charge.
- 2Confirm the detailsMake sure the customer sends the same coin on the same network the invoice names.
- 3Wait for confirmationsThe payment is not final until the network confirms it, and a low fee can delay the first confirmation.
- 4Receive the dollarsThe processor deposits US dollars into your bank account.
What records should I keep?
The IRS treats digital assets as property, not as currency, so a crypto payment is income at the dollar value on the date you receive it. Record every payment and every settlement.
Frequently asked questions
The processor may not credit the payment, and the crypto can end up out of reach. Contact the processor right away.
Some processors let you keep part of a payment in crypto, and then you carry the price risk.
The recipient sends a new crypto payment back, because the original transaction cannot be reversed.
