The Role Of Crypto Gateways In Changing Payment Systems

By June 20, 20224 minute read
The role of crypto gateways in changing payment systems

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. 

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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:

  1. The customer chooses to make cryptocurrency payments at checkout – in-app, in-store, or on the web. 
  2. The customer pays the merchant or website an amount equal to the cryptocurrency’s market value at the transaction time.
  3. The cryptocurrency payment gateway converts this amount into the currency the e-commerce merchant/firm chooses. 
  4. 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.

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.

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 Cryptocurrency Safe To Invest In?

Cryptocurrency investments are subject to market risks, but if sufficient security measures are not taken, trading accounts can be maliciously accessed. Investments come with risks and uncertainties, and we cannot claim that any digital currency investment is risk-free. Buying and selling cryptocurrencies can be risky even if the trader is knowledgeable about the market and treats their coins carefully.

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 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 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.

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 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.

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.

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.

Who Invented Cryptocurrency?

Satoshi Nakamoto invented cryptocurrencies and the technology that makes them function in 2009. The presumed pseudonymous individual or persons who invented Bitcoin used this identity. In addition, Nakamoto created the first blockchain database. Even though many people have claimed to be Satoshi Nakamoto, the person's identity remains unknown.

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.

Is Pi Cryptocurrency Safe?

Pi Network (PI) is the newest digital token to catch the cryptocurrency community's interest, even before it has wholly debuted. Some users see it as a chance to get engaged in a cryptocurrency 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.

What Is Virtual Currency?

Virtual currency is a type of uncontrolled digital currency that can only be used online. It is exclusively stored and transacted using designated software, mobile or computer applications, or unique digital wallets, and all transactions are conducted through secure, dedicated networks. Because digital currency is just currency issued by a bank in digital form, virtual currency is not the same as a digital currency. Virtual currency, unlike ordinary money, is based on a trust structure and cannot be issued by a central bank or other banking regulatory organization.

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.

Which Cryptocurrency Is Best To Invest Now?

Litecoin has an 84 million coin limit and a 12.5 LTC block reward, which is more than other cryptos. Miners will find that mining Litecoin is faster than mining any other cryptocurrency because the average time to mine a Litecoin is under two minutes. Because of its increasing popularity, Litecoin is the best of all the altcoins. At WazirX, the current price of Litecoin is ₹12,410.22.

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.

Is Cryptocurrency Banned In India?

No, cryptocurrency is not banned in India. India has seen its ups and downs in the crypto sector concerning its legal status. The Reserve Bank of India (RBI) issued a circular in April 2018 advising all organizations under its jurisdiction not to trade in virtual currencies or provide services to assist anyone in dealing with or settling them. A government committee proposed outlawing all private cryptocurrencies in mid-2019, with up to ten years in prison and severe penalties for anyone dealing in digital currency. The Supreme Court overruled the RBI's circular in March 2020, allowing banks to undertake cryptocurrency transactions from dealers and exchanges.

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.

Is Crypto Legal In India?

Cryptocurrencies are legal in India, and anyone can purchase, sell, and exchange them. It is currently uncontrolled, as India lacks a regulatory structure to oversee its operations. Per the Ministry of Corporate Affairs, companies must now record their crypto trading/investments within the financial year. In cases where a person receiving the gains is an Indian tax resident, or the cryptocurrency is regarded as domiciled in India, cryptocurrency transactions have been taxable in India

How Many Cryptocurrencies Are There?

There are over 5000 other digital currencies available on the internet in addition to Bitcoins. The only problem is that they haven't gotten the users' attention. Besides Bitcoins, a few other digital currencies have gained popularity among users. It's been more than ten years since Bitcoins were first released, and now they've achieved new heights thanks to their phenomenal success.

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.

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.

How To Invest In Cryptocurrency?

There are two ways of investing in cryptocurrency, mining and via exchanges. Cryptocurrency mining is considered the procedure of verifying and adding transactions to the blockchain public ledger. Another option is via cryptocurrency exchanges. Exchanges generate money by collecting transaction fees, but there are alternative websites where you can interact directly with other users who want to trade cryptocurrencies.

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

What Is Cryptocurrency?

A cryptocurrency is a digital currency secured by encryption, due to which chances of activities such as counterfeiting and double-spending taking place get close to impossible. Cryptocurrencies get created on blockchain technology ( a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are unique in that they do not get issued by any central authority. The term "cryptocurrency" comes from the encryption techniques used to keep digital currencies and the network safe.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
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