One of the strategies towards incorporating cryptocurrency in your business is through partnering with third party vendors. There are two primary paths that a business can select in cryptocurrency usage namely; a hands-on or a hands-off approach. While a hands-on approach entails the adoption of cryptocurrency in a business’ entire operations, a hands-off approach entails the adoption of cryptocurrency only in payments. As such, a business that only facilitates cryptocurrency payments in its operations can benefit from partnerships with third party vendors.
Compared to a hands-on approach, the hands-off approach is easier in terms of adjustments made to the business, as well as a faster achievement of goals such as the ability to target and capture new demographics. Since the approach entails a limited utilization of cryptocurrency, such businesses are bound to benefit from third party partnerships.
This checklist addresses crucial points for partnerships with third party vendors.
1 What are the fees and commissions charged by the vendor?
2 Do they handle part or all of the crypto-related risks for the business?
3 How responsive and resilient is the vendor?
4 How accurate and reliable are the vendor’s conversion pricing to fiat?
5 Is the vendor reliable and diligent in terms of fraud detection?
6 Does the vendor provide technical support in all jurisdictions?
7 Which blockchain system does the vendor use to support the digital network?
8 What are the vendor’s anti-money laundering and KYC policies?
9 Does the vendor confirm addresses before the execution of major transactions?
10 Is the vendor compliant with the restrictions of Office of Foreign Assets Control (OFAC)?
11 Does the use of third party vendor affect accounting for transactions in foreign currencies?
12 Does the vendor provide third party assurance on matters to do with system and organization controls?
13 Do the vendor’s actions or inactions affect customer experience?
14 Are the vendor’s cybersecurity controls compliant with accepted standards?
15 How accurate and reliable are the vendor’s accounting and taxing reports provided?
16 Does the vendor handle cryptocurrency-related compliance and control issues for the business?
17 Does the vendor provide additional security for transactions?