NFT (non-fungible token) marketplaces primarily accept cryptocurrencies, credit or debit cards as their main payment methods. It is not hard to see the problems with these payment methods – cryptocurrencies lack price stability, whilst credit and debit cards come tacked with high fees.
Most NFTs are minted based on their blockchain network’s token standard. The most common NFT token standard is ERC-721, which is based on the Ethereum network. Buying NFTs on the Ethereum network naturally accepts payments made with Ether (ETH) or other fungible ERC-20 tokens.
Blockchain networks like Solana or Zilliqa accept cryptocurrency payments native to their networks.
However, most NFT creators are not digital asset natives. They are attracted to the permanence, traceability, and transparency that blockchain technology provides, but they are not intricately familiar with the workings of the digital assets world as a whole. Payments with cryptocurrencies lack the price stability for these creators. Many of them prefer the familiarity and stability that fiat currencies provide. Payment providers such as Visa and Mastercard have stepped in to offer such payment solutions – however, the buyer would have to stomach up to an extra 5% in transaction fees to pay with credit or debit cards.
The extra 5% transaction fee is just the one that is charged by Visa, Mastercard, or any major card association. Most credit or debit cards are issued by banks, who charge extra fees – usually 3.25% – for foreign currency transactions.
There are multi-currency cards on the market that advertise 0% foreign transaction fees.
However, the rate that the user gets may not be what the mid-market forex rate is due to the fact that the transaction takes around three days to settle. In those three days, price stability is not guaranteed – what a consumer pays at checkout may differ slightly from what is reflected on their bank or app statement.
Stablecoins can solve the problems that cryptocurrencies face as a payment method – stablecoins such as XSGD and XIDR offer price stability and near-instant one-to-one redeemability because of its 100% cash backing. The reserves that backs XSGD and XIDR are safeguarded by regulated financial institutions in both Singapore and Indonesia.
Stablecoins can also solve the problems that credit and debit cards face with settlement times and transaction fees. XSGD and XIDR stablecoins are based on the Ethereum and Zilliqa token standards, and settlement times take around 6 minutes or 40 seconds on their respective blockchain networks. Transaction fees that creators and buyers have to pay are just the blockchain networks’ gas fees.
Many merchants or NFT marketplaces might feel chained to existing cryptocurrencies, credit or debit card payment options because of the huge barrier to accept other payment methods.
Accepting new payment methods means three things to merchants such as NFT marketplaces: receiving money quickly, receiving as much money as possible, and fee transparency. Stablecoins such as XSGD and XIDR offer these three things, and they come with Payment & Payout APIs that facilitate seamless conversion between cash and stablecoins.
StraitsX’s Payment & Payout APIs also have the benefit of accepting funds from StraitsX Personal Account holders and traditional payment networks such as FAST in Singapore, and SWIFT worldwide. This gives NFT marketplaces the flexibility to accept different payment options whilst maximising financial accessibility for both themselves and their customers.
NFT marketplaces and other merchants can tap on the many use-cases of the XSGD and XIDR stablecoins via our Payment and Payout APIs. They can initiate payments, manage transactions, access the aforementioned APIs with a StraitsX Business Account.
It is a simple process:
Note: If you are a high net worth individual, or institution, you can take advantage of StraitsX’s OTC Desk feature that offers deep liquidity and OTC block trades.
StraitsX and our DeFi partners are especially catered for our Indonesian and Singaporean users because of our native support of XSGD and XIDR. This would allow our regional investors to trade in their home currency, as opposed to factoring in the conversion of their home currency to the US Dollar (USD), minimising transaction fees, and slippages.