Table of Contents
As the world progresses towards digitization, the modes of payment keep evolving with each passing year – from physical modes to digital money and now cryptocurrency. Today millions of people own cryptocurrencies, and reciprocally, thousands of e-commerce merchants and websites have started accepting cryptocurrency as a mode of payment. The first physical Bitcoin transaction was two pizzas in exchange for 10,000 BTC! While we have come a long way from that era, cryptocurrency payments posit some uncertainties and reservations for customers who are still getting used to digital asset payments.
Cryptocurrencies help overcome the limitations faced by traditional payment systems like lack of automation, delayed cross-border transactions, and third-party involvement. Businesses worldwide understand the hitches in the traditional payment systems and seek to embrace crypto payments, allowing more payment options to customers.
But cryptocurrency payments are a bit more complex than traditional fiat payments, as transferring cryptocurrencies from one wallet to another requires some understanding and know-how of operating wallets and public-private keys and a certain level of caution. To smoothen out these issues, e-commerce merchants and websites use cryptocurrency payment gateways, just like regular payment gateways, enabling digital payments and instantly receiving fiat currency in exchange. Let’s discuss.
What is a crypto payment gateway?
Investopedia defines a cryptocurrency payment gateway as ‘a transaction facilitator between merchants and customers for processing payments.’ It is a dynamic payment processing platform that allows organizations and businesses to accept payments in cryptocurrencies without any security hazards.
Get WazirX News First
It supports direct payments from crypto wallets for users. These payment gateways responsibly transfer customers’ payment-related wallet details to the merchant’s software. With increasing businesses looking for good, instant, and safer payment gateways, crypto payment gateways have become the obvious choice.
Here are the workflow steps involved in a cryptocurrency payment gateway:
- The customer chooses to make cryptocurrency payments at checkout – in-app, in-store, or on the web.
- The customer pays the merchant or website an amount equal to the cryptocurrency’s market value at the transaction time.
- The cryptocurrency payment gateway converts this amount into the currency the e-commerce merchant/firm chooses.
- The money is instantly added to the merchant’s account with the provider and, at regular intervals, is transferred to the designated bank account mentioned in the service contract of the merchant/firm.
Main features of crypto payment gateways
As the trend of crypto payment gateways escalates, the number of crypto payment gateways are also increasing. Certain salient features differentiate the best crypto payment gateways from the rest. Given below are some must-have features:
Peer-to-peer Transactions
E-commerce vendors, merchants, retailers, and businesses can receive payments directly from the customers over a peer-to-peer system by deploying a decentralized payment gateway into their existing payment module. This feature brings two benefits- speed in transactions and a secure environment over the payment gateway.
Cross-border transactions
Usually, a fiat currency transaction takes up to 5 to 15 days, while crypto-based transactions take just a few minutes to complete the process. The fast speed helps businesses for quicker national or international imports and exports via seamless cross-border transactions.
No intermediaries
The crypto payment gateways eliminate the role of third parties in transaction processing. So, the payments directly reach the customer to the merchant at lower transaction costs.
Compatible with operating systems
The crypto payment gateways are fully compatible with different operating systems like- Windows, macOS, Linux, etc. Therefore, merchants do not need to configure their device or the application to integrate the payment gateway.
Easier auto settlement procedure
Crypto payment gateways offer an auto settlement option through which one can easily connect payment gateway to exchanges to instantly convert cryptocurrencies into fiat currencies or stablecoins.
Simple integration
Cryptocurrency payment gateways are simple to integrate into any existing application. Therefore, merchants and vendors can easily plug in a crypto gateway to their application and start accepting payments in crypto.
Benefits of Crypto Payment Gateways
Confidentiality
Unlike the traditional payment gateways, decentralized crypto payment gateways neither ask for registration or any KYC (Know Your Customer) details for verification purposes. The platform allows users to join the network anonymously. This anonymity feature is essential for merchants to safeguard user privacy.
No chargebacks
The system does not allow chargebacks or refunds as the payment gets processed from a crypto payment gateway. This feature allows enterprises with higher-risk businesses to use these payment gateways.
Instantaneous processing
Crypto payment processing usually takes less than 10 seconds, and with no intermediary involvement, the processing is really fast and allows merchants and vendors to accept crypto payments easily and quickly. Crypto payment gateways also allow users to exchange crypto for fiat money quickly.
Disadvantages of Crypto payment gateways
Despite all their advantages, these payment gateways are essentially third-party players. Cryptocurrencies were originally designed to bypass these middlemen, and using them defeats the very purpose of cryptocurrencies. Being third-party gateways, the performance of these crypto payment gateways is dependent on the provider’s ability to allow uninterrupted services from across the globe. Crypto payment gateways add an additional layer to the fee structure beyond wallet fees. If ever a payment gateway is hacked, the merchant may lose all their funds.
It should be said here that cryptocurrency payment gateways aren’t necessary, and it is perfectly fine if you want to use your personal crypto-wallet to accept crypto payments. These crypto payment gateways reduce the extra steps of exchanging cryptocurrencies and manage your wallet on your behalf.
There are plenty of such crypto payment gateways, such as Coingate, BitPay, Shopify Gateway, SpicePay, etc., which, when picked with proper knowledge, can help users in multiple ways possible.
Frequently Asked Questions
How To Invest In Cryptocurrency Stocks?
Cryptocurrency can be purchased in two ways: through mining or exchanges. The process of confirming and adding transactions to the blockchain public ledger is known as cryptocurrency mining. Cryptocurrency exchanges are another option. Exchanges make money by charging transaction fees, but there are alternative platforms where you may communicate directly with other cryptocurrency traders.
How Cryptocurrency Works?
Cryptocurrencies use cryptography technology to keep transactions and their units (tokens) secure. Cryptocurrency works via a technology called the blockchain. A blockchain is a decentralized technology that handles and records transactions across numerous computers. The security of this technology is part of its value.
Which Cryptocurrency Is Best To Invest In 2021?
Many altcoins are flourishing to invest in. Some cryptocurrencies with great potential are Ether, Ripple, Tron, and more. Investors are trying to diversify their portfolios and are flocking to the leading cryptocurrencies. Many growing businesses are already accepting cryptocurrency as acceptable payment methods.
Are Cryptocurrencies A Good Investment?
Cryptocurrency has the potential to make you extremely wealthy, and the potential to cause you to lose your money. Crypto assets, like any other investment, come with many risks and potential rewards. Fundamentally, cryptocurrency is an excellent investment, particularly if you want to gain direct exposure to the demand for digital currency.
What Is Crypto?
Crypto or a cryptocurrency is a digital currency protected by cryptography, making counterfeiting and double-spending nearly impossible. Blockchain technology is used to produce cryptocurrencies (a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are distinct in that a government does not issue them. The word "cryptocurrency" refers to the encryption methods employed to keep digital currencies and the network secure.
What Is The Safest Cryptocurrency To Invest In?
Bitcoin has had the highest market capitalization, has been around the longest, has the most experienced development team, and has enormous network impact and brand recognition. As a result, while trading cryptocurrencies, the rate of return on Bitcoin is commonly used as a benchmark. However, the risks associated with cryptocurrencies remain, and the safest cryptocurrency for you depends on your analysis.
Is Ethereum Safe To Invest?
The Bitcoin market is unquestionably more volatile than the stock market. This may not be the market for you if you are incredibly risk-averse. Ethereum, on the other hand, may be a terrific investment for you if you're a diamond-handed investor who won't lose sight of short-term losses. Ethereum is a relatively safe investment as it is also based on blockchain.
What Are The Best Cryptocurrencies To Invest In?
The best cryptocurrencies to invest in would be the ones you study and analyze in detail. Some of the most popular cryptocurrencies include Bitcoin, Ethereum, and many altcoins such as Tron, Ripple, Litecoin, etc.
What Is The Meaning Of Crypto?
A cryptocurrency is a digital currency that is secured by the process of cryptography, making counterfeiting and double-spending almost impossible to happen. Blockchain technology is used to produce cryptocurrencies ( a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are distinct in that a centralized authority does not issue them.
Is Pi Cryptocurrency Safe?
Pi Network captured the crypto community’s interest even before it officially debuted. Its innovative mobile mining approach and user-friendly design simplify crypto adoption for a broader audience.Some users see this as a chance to get engaged in the crypto from the beginning and profit in the future, similar to how early Bitcoin adopters made huge profits by mining and keeping the coin. Other users have compared Pi to a worthless multi-level marketing (MLM) scheme.
Disclaimer: Click Here to read the Disclaimer.
