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 Safe Are Cryptocurrencies?
Cryptocurrencies can be safe, but your crypto wallets can be hacked if proper security steps are not performed. There are also dangers and uncertainties associated with investments, and we cannot declare any virtual currency investment risk-free. Buying and selling cryptocurrencies does not have to be dangerous if the trader is well-versed in the market and treats his coins with care.
Can I Invest In Cryptocurrency?
Yes, with exchanges like WazirX, you may invest in cryptocurrency in India. To begin, go to the WazirX website and register. After that, you will receive a verification email. The link received by verification mail will only be available for a few seconds, so make sure you click it as quickly as possible. This will successfully verify your email address. The following step is to set up security, so choose the best solution for you. After you've set up the security, you'll be given the option of continuing with or without completing the KYC process.
Are Cryptocurrencies Legal In India?
In India, cryptocurrency is legal, and anyone can buy, sell, and trade it. Because India lacks a regulatory system to regulate its operations, it is presently uncontrolled. According to the Ministry of Corporate Affairs, companies must now document their crypto trading/investments inside the financial year.
How To Invest In Cryptocurrency In India?
There are two ways of investing in cryptocurrency, mining and via exchanges. Cryptocurrency mining is the process of verifying and adding transactions between users to the blockchain public ledger. Purchasing cryptocurrency in India is a straightforward procedure where investors simply participate by registering with a crypto exchange such as WazirX. After registering for an account, citizens can trade multiple cryptocurrencies, store cryptocurrency in wallets, and more.
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.
Is Cryptocurrency Legal In India?
In India, cryptocurrencies are legal; anyone can purchase, sell, and trade cryptocurrencies. They are currently unregulated; India does not have a regulatory framework in place to regulate its functioning. According to the Ministry of Corporate Affairs (MCA), companies must now declare their crypto trading/investments during the financial year, according to the Ministry of Corporate Affairs (MCA). Cryptocurrency transactions have been taxable in India when people receiving such gains are Indian tax residents or where the crypto is considered to be domiciled in India
Is Mining Cryptocurrency Legal?
Cryptocurrency mining can be time-consuming, expensive, and sporadically profitable. Mining has an appeal for many cryptocurrency enthusiasts as miners are paid directly with crypto tokens for their efforts. The legality of cryptocurrency mining is dependent on where you live. In India, there is no restriction on crypto mining.
Is Bitcoin And Cryptocurrency The Same Thing?
Bitcoin is a cryptocurrency that was designed to facilitate cross-border transactions, eliminate government control over transactions, and streamline the entire process without third-party intermediaries. The absence of intermediaries has resulted in a significant reduction in transaction costs. Satoshi Nakamoto, the creator of Bitcoin, created the first cryptocurrency in 2008. It began as open-source software for money transfers. Since then, plenty of cryptocurrencies have emerged, with some focusing on specific fields.
Is crypto legal?
Crypto is legal in most countries, including India. While nations like the U.S. and many in Europe have regulatory frameworks, others like China have strict bans.
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.
