ICO Merchant Account
Every day a new business idea comes up, and some of them might create a significant impact on our life. With new startup ideas, businesses need funding to work on their projects. Sometimes it’s challenging to raise a considerable amount of funds from the bank. There comes the idea to raise funds from the public. ICO is a fundraising mechanism which helps the startup to boost the required amount of funds from the public. The fund gets settled through ICO Payment Processor.
But how to get a Merchant Account for your ICO campaign? Don’t worry, we at Quadrapay help merchants from diversified industries to get a merchant account for payment processing. We in this article will discuss what an ICO is and which merchant account best suits your ICO campaign.
What is ICO – Initial Coin Offering?
An Initial Coin Offering is also known as ICO is a way to raise funds for your startup business or new projects idea. The startup businesses with their blockchain projects sell their underlying fresh minted crypto tokens. Startup business does so in exchange for bitcoin and ether. Investors buy the cryptocurrency in the form of ‘tokens’ or coins. It somewhat resembles IPO, i.e. Initial Public Offering, which is regulated by SEBI. Investors invest in IPO to purchase a share of the company. Unlike IPO, ICO is unregulated security which allows the issuer to raise an unjustified amount of capital. In Simple-
- ICO Payment Processor helps the startup or small business to raise the required amount of funds.
- Anyone can buy the tokens or coins and can become a part of the project.
How ICO Works?
To raise funds using ICO, you have to make a detailed campaign and time frame of your project. If the campaign is successful, you get the desired amount of fund, and then you start investing in the project as declared. If the campaign was unsuccessful, i.e. the campaign is not able to raise funds as expected, the accumulated fund is returned to the token investor.
Steps involved to raise fund are as follows:-
- Create a campaign: You need to create a detailed information document representing the outlines of your project. The outlines are like what the project is about? How much funds are required to start the project? A particular time frame of the campaign to raise funds? And the most important thing is how investors get benefits from your project?
- Sell fresh minted Crypto Token: Selling of token started as determined in your campaign. You can sell the token for a particular time frame as outlined in your campaign document.
- Result of the campaign: If the campaign is successful, i.e. you have raised the fund as expected. But if the raised amount was not as expected, the raised amount is returned to the investor declaring ICO as unsuccessful. This is how a business raises money from ICO.
Why does ICO require a High-Risk Merchant Account?
ICO is considered a High-risk business because there is no regulatory protection. Investors are investing in limited transparency of the project. Scams are so common in ICO’s. The risk factors are as follows:-
- There are high risk and defaults in ICOs.
- No regulatory protection.
- There are high volatility and liquidity in the ICO fundraising mechanism.
- There is high fluctuation in the value of ICO Tokens.
- High level of scams
- The launching cost of an ICO campaign is around $500,000.
Due to high scams and volatility in ICO campaigns, and uncertainty in the value of the token, it is declared in the high-risk business category. To deal with, a merchant or token issuer requires an ICO Payment Processor.
Get Your ICO High-Risk Merchant Account With Quadrapay
Most of the processors didn’t onboard merchants associated with the ICO campaign. Nevertheless, you can still get onboarding with us. We at Quadrapay have a solution for your industry type.
To get smooth onboarding for you, we have partnered with a processor from the US, EU and other global processors. Get your free quotes to get started.
You can fill the pre-approval form onto our site with your necessary business details, or you can mail us at [email protected]. We will get back to you shortly.
Happy ICO Processing !!!