One of the most significant shifts in current monetary policy has been the advent of cryptocurrency. Bitcoin was the first and most highly lauded, with many others that have come about since. The industry surrounding crypto investment, payments, and blockchain processing are rapidly and constantly changing. Businesses that accept crypto can benefit significantly from this paradigm shift.
Crypto adoption has exploded recently, and even entire countries are backing crypto to ensure the financial privacy and solvency of the masses. Online vendors and merchants that choose to work with specialized services can begin accepting a range of cryptocurrencies for their products.
These services are known as crypto payment gateways. Let’s dig into the details of what they are, how they operate, and whether they might be right for your business.
What Exactly Is A Crypto Payment Gateway?
Simply put, a crypto payment gateway allows a business or vendor to accept payments from customers in crypto. If you are a merchant and sell your goods or services online through a standard e-commerce storefront, you may already take various payment methods based on what your customers prefer to use.
Your crypto payment gateway can make an incredible number of new crypto payment options available for customers who are ready to spend money with your organization.
By utilizing a crypto payment gateway, merchants can accept cryptocurrencies like Bitcoin, Ethereum, Doge, Litecoin, tethered coins, stable coins, and more. In addition, these are often integrated with functionality similar to any other form of digital payment, such as wire transfers, ACH bank transfers, or chip & pin transactions.
How Do Crypto Payment Gateways Function?
Primarily, the service allows you to choose what payments you want to accept based on what they offer. In some cases, they may provide acceptance of more than 1000 coins that can commonly be found on exchanges. In addition, if you allow customers to pay for your goods or services with Bitcoin only, they can provide you with that functionality.
Some crypto payment gateways will not only provide you with a non-custodial wallet, but they may also provide exchange and conversion services as well. If you have existing wallets for various cryptos, you may be able to connect your wallets directly so that you can bypass exchanges and save even more money in the long run.
In one example, an American company chooses to accept a wide range of cryptos for their goods. As purchases are made in varying currencies, they are stored in non-custodial online wallets until the company converts them all to USD, which they then transfer to their corporate account. In another example, a Canadian company chooses only to accept Bitcoin for their goods, a common choice.
Their payment gateway allows the connection of their wallet, so when customers make purchases, the BTC is automatically sent to the wallet provided, so no exchange to CAD is needed at that time.
Why Are Crypto Payment Gateways Needed?
Crypto payment gateways are needed for a variety of reasons. They are all quite similar to why people enjoy crypto in the first place and generally revolve around the decentralized nature of blockchain technology. Some of the most significant benefits to using a crypto payment gateway will include:
- Security – Blockchain technology requires multiple verifications from anonymous third parties, meaning the security and transparency of the network are nearly unmatched.
- Low Fees – Crypto transactions are notoriously cheap, particularly when compared to outdated fiat payment methods. For example, crest card or debit card swipe fees can be nearly ten times greater than the equivalent crypto transaction.
- Speed – Many crypto transactions occur almost instantly. The Bitcoin lightning network has shown that payments can be sent and received in fractions of a second instead of waiting several business days for an ACH or similar transfer to be processed.
- Simplicity – Most crypto payment gateways will help you to significantly simplify the process of consolidating your funds and setting up your conversions and transfers.
Things To Consider When Choosing A Crypto Payment Gateway
There are several considerations to make when you consider crypto payment gateways. The most important one to look at objectively is “will it be the best option to serve my business?”
Be sure they have the coins that you and your customers want to use. Check into their fees since fees can vary significantly across payment gateway. Also, make sure that they have already provided a positive experience for other businesses that have worked with them before.