Why do merchants need a custodial wallet solution to accept payment

While a custodial wallet may be considered less secure than a non-custodial wallet, many prefer them because they don’t require as much responsibility and are usually more convenient.

Losing your password to a non-custodial wallet could be financially devastating if you do not take sufficient precautions. However, if you forget your exchange account password you’ll likely be able to reset it. Since the keys in this case are not in user’s control , it’s advisable to only use custodial solution from the reputed brands.

Merchants Scenario:

Merchants want to focus on the business in hand and at the same time they have to manage accounting for their businesses too. There are 2 main reasons why a custodial solution will be better for merchants:

Ease of use:

Most of the merchants wants an easy to use solution rather than DIY. Setting up a wallet, remembering a private key (which BTW is not recoverable in case you forget) , matching an invoice to a payment will become very challenging for them. So a custodial solution can becomes very easy to manage as all they have to do is sign-in with their email password and access all the data and invoices.

Accounting:

Identifying a transaction with respect to an invoice can be a nightmare in case of a non-custodial wallet. Therefore a custodial wallet can help them manage their invoicing & accounting in a better way.