Here’s a detailed guide on everything you need to know about cryptocurrency payment gateways.
The world of cryptocurrency is steadily making its way into primary business platforms where money frequently exchanges hands. But, many popular online payment businesses are a little hesitant to incorporate cryptocurrency as one of their main payment options. Once business owners understand how cryptocurrency payment gateways work, they can be a bit more forthcoming.
For all businesses, anything that facilitates faster, reliable, secure, and efficient payments remains a top priority. This is where a crypto payment gateway comes in to provide an error-free solution.
A crypto gateway promises businesses with security, endurance, speed (for cross-border crypto payments), and techniques to lower transaction costs. Along with that, business owners will have complete control of how payments are conducted, irrespective of the clients’ locations.
What is Crypto Payment?
Crypto Payment is when a customer makes payments in cryptocurrencies by scanning QR codes or by sending cryptos directly to the wallet addresses. Each transaction is recorded on the blockchain platform.
What is a Cryptocurrency Payment Gateway?
When a payment is initiated by a customer, a crypto payment gateway authorizes the transaction and makes it valid.
The Vision of Crypto Gateways
The primary aim is to limit the number of people involved: just the merchant and the customer client. Then there will be no need to find third parties to help facilitate transactions.
The crypto payment gateways are regulated by a decentralized gateway or a blockchain ecosystem. It is a dynamic platform that encourages more people to accept digital currencies and process payments.
This ultimately helps to increase the popularity of cryptos in day to day business transactions. Decentralized gateways ensure that each purchase will be encrypted, thus making it harder for hackers or online frauds to modify a payment process.
“Numerous businesses have powerful systems to process fiat currencies. But how well equipped are they to accept crypto payments?”
Traditional Payment Gateways Vs. Crypto Payment Gateways
When dealing with local businesses, traditional payment gateways are feasible. However, when it comes to international businesses, there are a lot of flaws. This is due to the increased number of intermediaries required to go through the transactions, which in turn significantly affects the safety of the entire process.
On the other hand, decentralized gateways (crypto gateways) facilitate successful transactions obliging hundreds of digital currency types. The business owners will be one-hundred percent sure that the process is safe, with no chance of losing their money.
Also, with fewer or no go-betweens, the transaction process will be short and precise. The decentralized gateway system handles everything except the recording and confirmation of payments.
The terms and conditions are clear, straightforward, and there are no limitations with respect to location, language, and other factors that usually slow down the processes.
A conventional payment gateway takes days or sometimes weeks to process crypto cross-border payments . Whereas, a crypto payment gateway, with the aid of smart contracts, takes around 20 seconds to handle an international payment, regardless of the location.
Smart contracts are conveniently developed to authorize payments quickly and automatically. They are essentially digital agreements between business owners and their clients.
They are required to complete the payment process, thus offering a lower-priced process by waiving off the need for third parties or additional transaction requirements.
Businesses conduct audits very often. Smart contracts can generate the details of all transactions conducted during specific periods hence offering a more transparent audit process. There’s an increased sense of comfort and confidence between the involved parties that there is no possible chance that the money may end up in the wrong hands.
How does a Crypto Payment Gateway Work?
Two significant factors differentiate crypto gateways from traditional payment processing.
- A customer pays via a crypto wallet, not a debit/credit card.
- The customer pays in cryptocurrencies, not in physical currencies.
What is a Crypto Wallet?
To pay or accept cryptos, one needs a cryptocurrency wallet that can either be an application or software. The wallets are similar to bank accounts, with the only difference being they are decentralized. There are two types of wallets:
- Single cryptocurrency wallets: These wallets can hold only a specific currency. They best suit individuals who are interested in a particular currency.
- Multi-cryptocurrency wallets: Many business owners prefer multi-cryptocurrency wallets since they offer a more comprehensive range of payment options.
“Crypto wallets open up the possibility of crypto payments to a wider number of customers, as they can conduct their transactions from any wallet they use.”
How do Merchants get Funds?
Once a customer pays in crypto, the respective merchant gets the funds in crypto. He/She can convert the digital money to fiat anytime with the help of the merchant’s PSP or a crypto-exchange agency.
How to Accept Cryptos with a Payment Processor?
The easiest way to accept digital currencies at your business is to use a crypto payment gateway. The gateway makes it easy to add cryptos to your accepted payment methods, be it on a website or a retail shop. When merchants register in a payment processor, they each receive a wallet, or they can link their existing wallet if they have one.
For an e-commerce website, after registering, the merchants need to install a plugin from the payment gateway to make cryptos an accepted payment method with their existing e-commerce platform.
For in-person (direct) transactions, the merchants have to select the most efficient gateway that can integrate with their Point-Of-Sale (POS) systems.
Benefits of Accepting Cryptos as a Payment Method
Cryptocurrencies offer some advantages over other payment methods for both the merchants and the customers. The transaction fees are comparatively lower than credit cards. The transactions also process very quickly because there is no intermediary to validate the transactions.
Once the cryptocurrency payment is processed, neither chargebacks nor refunds are possible. This makes crypto so attractive to high-risk business owners.
Some people would consider anonymity from paying customers a con, but it’s a pro for people who are concerned with privacy. Anonymous payments are beneficial for vendors who sell digital products.
The entire process of crypto payment processing takes less than ten seconds. Merchants can exchange cryptos to fiat currencies anytime they want.
Documents Required to Adopt Crypto Payment Method
Once a merchant decides to offer crypto as a payment option, there are a few steps to proceed with. He/She needs to contact a PSP and open a merchant account first then need to keep the following documents ready.
List of documents required to open a merchant account & start accepting crypto:
- Certificate of Incorporation
- Certificate of Incumbency
- Passport copies of owners
- PSP Application
- Processing History.
- Company’s License.
- Company Turnover.
Features of crypto payment gateway
Peer 2 Peer Transactions
Merchants, retailers can receive their payments directly from the consumers in a P2P model by integrating the crypto payment gateway to their payment methods!
Devoid of intermediaries
The crypto payment solution completely avoids third-parties and intermediaries in the system. Hence, the merchants can gain more profits with lower transaction charges!
Small and medium scale businesses can quickly import or export goods with crypto payments. Fiat transaction takes 5-15 business days, whereas crypto transaction completes within minutes.
Crypto payment gateways are compatible with operating systems such as iOS, Android, and Windows. You need not modify the specifications of the application or system to integrate crypto gateway.
Crypto transactions are recorded on the immutable blockchain ledger. Hence, the transactions are scam-free and can’t be reverted. Every transaction requires approval from miners!
Easy to integrate
Merchants can easily integrate the crypto payment gateway in their existing applications. It’s sufficient for medium & small scale businesses to integrate the crypto plug-ins to receive crypto payments!
Crypto payment gateways are the future, and businesses adopting them will encounter a lot of attention from crypto enthusiasts. Apart from the cryptocurrency payment gateway, there are other applications still in the works.
They include product management, order management, and invoice management applications. These are advanced payment solutions aimed at facilitating a more efficient business environment with no intermediaries and human interaction.