As cryptocurrencies gain more followers in various walks of life, it is very important for businesses to start accepting these digital currencies. With an increasing number of people owning cryptocurrencies, businesses and stores find it more cost-effective to accept cryptocurrency payments.
Cryptocurrency payment gateways allow all kinds of institutions or businesses to allow their customers to pay for goods and services with cryptocurrencies instead of fiat money. This would mean that there is more than one viable payment option, inviting more people to take advantage of their crypto assets.
With the number of cryptocurrency users growing rapidly every year and new cryptocurrencies continuing to appear on the market, it should come as no surprise that major service providers do not want to miss the opportunity to keep up with the differences in the financial world. After all, what matters most after the law of customer acquisition is the guarantee of secure financial transactions, which are carried out without interruptions and thus guarantee a successful business flow – something that cryptocurrency payments can facilitate.
This article was edited by our Editor in Chief, Angel MarinovOver the past 3 years, he has been involved in the business development of different crypto payment solutions such as crypto payment gateways and crypto banking solutions. During this period of time, Angel realized that there is a huge lack of information about what exactly a crypto payment gateway is and why a business needs one. That is why we decided to share our knowledge on the topic.
How does a cryptocurrency payment gateway work?
Below is an overview of the process of using a cryptocurrency payment gateway:
- When making the payment, the merchant’s customer chooses the option to pay with their cryptocurrency.
- The amount of cryptocurrency you spend is calculated based on the current market value of the digital currency in question.
- The payment system will convert the purchased assets into the currency chosen by the merchant or transfer cryptocurrency directly to the merchant’s account.
- All money is stored securely in the merchant’s wallet, from where it can be withdrawn and moved anywhere the owner desires.
That brief explanation of the workflow leads us to the conclusion that all the work is done by the cryptocurrency payment gateway, which is responsible for all financial matters. As a merchant, you don’t have to worry about knowing anything about cryptocurrencies. Your most important job is to sign a contract with a reliable provider that is transparent in all transactions with finances. Moreover, there are different types of gateways: crypto to fiat gateway, Fiat to Crypto Payment Gatewayor that can process fiat-crypto-fiat transactions such as X1 payment gateway.
Always make sure to stay up to date on the regulations your country imposes on cryptocurrencies before entering into business relationships with a payment gateway!
Here is a great YouTube video explaining how cryptocurrency payment gateways work:
How can I accept cryptocurrency payments?
You can set up your own cryptocurrency wallet if you want to accept cryptocurrencies directly. However, if you don’t have much knowledge or experience with cryptocurrencies, a cryptocurrency payment gateway is perfect for your needs. This payment processor will be the intermediary you need if you want someone else to handle everything related to accepting digital currency payments, and you can also choose which fiat currency you want the gateway to transfer the received assets into.
Some of the most popular cryptocurrency payment gateways are Coinbase, BitPay, NOWPayments, and AlfaCoins. Each of them supports a variety of cryptocurrencies and has a different range of tools that make it easier to complete larger payments and manage assets. Some of these providers also offer cryptocurrency point-of-sale terminals, with which you can easily accept cryptocurrency payments in your physical store.
Read more about Cryptocurrency Point of Sale Terminals.
Pros and cons of cryptocurrency payment gateways
Being able to offer more than one payment method is of great importance to the well-being of any business. Offering your customers options would show that you are a well-established merchant, who is open to improving your services. But there are still many sellers who are skeptical of cryptocurrency payments or who simply haven’t even bothered to research how efficient and easy it is to integrate cryptocurrency payment gateways into their direct-to-consumer business model.
To better understand what the benefits and drawbacks of implementing these payment processors are, it is wise to take the time to do some research on your own. Fortunately, we have managed to compile a list of advantages and disadvantages of digital currency payments and the gateways that allow them.
Advantages of cryptocurrency payment gateways
- The only intermediary in the payment process is the cryptocurrency payment gateway, which makes it more convenient for both the customer and the merchant who can leave all the work to the service provider.
- Cryptocurrency transactions have lower fees compared to fiat ones.
- The payment process is much faster.
- The gateway allows merchants to accept payments from anywhere in the world.
- Customers have the option to use different cryptocurrencies to make a payment.
- If technical problems arise, it will be up to the gateway provider to resolve them.
Read more about the Benefits of accepting cryptocurrency payments for your business.
Disadvantages of cryptocurrency payment gateways
- Choosing a safe and reliable cryptocurrency gateway provider can be difficult due to the sheer number of options on the market.
- There is a chance that most of your customers won’t even bother using the different payment methods you offer. That’s why you need to know your target customers well before offering them something they’re not interested in.
- Cryptocurrencies are still considered a high-risk asset and market volatility is a drawback for many users.
Conclusion
Although many believe that cryptocurrencies are the great future for people’s finances, there are still many unknowns regarding these digital currencies. It would be unfair to claim that just because they have enabled many people to make fortunes, everyone can have exactly the same experience with cryptocurrencies. Acknowledging their benefits for less privileged people and the security advantages of blockchain technology is simply not enough to gain the trust of the masses.
However, more and more globally significant institutions have begun to recognize both the advantages and disadvantages of cryptocurrencies, leading to the implementation of more regulatory acts and increased awareness when it comes to investing in cryptocurrencies.
If you feel overwhelmed by this and want to know how to choose the best cryptocurrency payment gateway for your site, make sure to Check out this guide.
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