What are crypto gateways?
A cryptocurrency gateway is a payment processor that enables users to exchange digital currencies and receive fiat currencies. They work the same manner as the payment processors that bank credit cards use. The processors eliminate utilizing your crypto wallet to receive cryptocurrency payments. They reduce the transaction points you would have to go through to exchange your cryptocurrencies into fiat currency.
They also reduce the cost incurred since you pay a lower fee with fewer payment points, but it is more than what you would pay if you used your wallet directly. Ideally, these gateways help facilitate payments between merchants and their clients. Many people are still skeptical about using crypto wallets for making purchases, so these gateways take the role of managing the wallets. They reduce the perceived risk that many individuals have and convert all forms of cryptocurrency into the merchant’s preferred fiat currency.
Why are crypto gateways growing fast?
Crypto gateways are growing exponentially first. In 2021, this sector was valued at USD 22.09 billion and had been growing at an impressive rate of 22.1% compound annual growth rate (CAGR), according to data from Brandessence Market Research. There are several reasons behind this growth key among them is the ease with which they enable users to instantly convert their digital currencies into fiat.
As a merchant, you do not have to worry about digital currencies. The gateway provider converts the crypto for you and has it sent to your bank account at your convenience. The increased demand for mobile-based payments among small businesses globally has contributed to this growth rate. Other factors that have seen these payment options grow first to include.
- Customers get to choose their preferred payment options
- Merchants receive money in their select fiat currency
- Merchants are protected from cryptocurrency volatility at the time of payments.
- Businesses and companies are increasingly adopting digital currency payments to avoid debit and credit card scams.
- The gateways eliminate the need for individuals to shop from physical stores as they can transact online and have the merchants deliver their purchases.
- Tremendous technological advancements have allowed the internet to penetrate rapidly globally, significantly enhancing digital service products’ rapid innovation.
What is the size of the crypto gateways market?
As of 2021, the global crypto gateway market was valued at approximately $22.09 billion. This market is expected to continue expanding at a CAGR of about 22.1% from 2022 to 2030. The rapid acceptance of cryptocurrency payments and the massive investments streaming to this market are among the factors contributing to its growth. Its size has been triggered by the rapid growth of the cryptocurrency industry. Digital currency continues to increase in popularity globally ten years after its inception.
Currently, the cryptocurrency market size stands at just above $0.25 trillion, with Bitcoin, the largest and the most valuable crypto being the sixth-largest currency globally. Compared to the dollar and euro, the world’s leading currencies whose circulation stands at approximately $1.7 trillion and $1.4 trillion, respectively, cryptocurrencies are making headways. They will continue doing so, considering the benefits they present to users.
Another factor pushing the growth and size of this market is the security it offers to consumers and merchants worldwide. Recently, there has been an increase in online transactions due to Covid-19 restrictions globally. Such transactions propel users to pass sensitive information online, giving fraudsters an avenue to intercept and use this data for criminal activities. Crypto payment gateway services have emerged as a perfect deterrent to these fraudsters providing safer online payment options than credit and debit cards, hence their exponential growth.
Established payment gateways use secure pathways that encrypt users’ sensitive information, such as bank account details and credit and debit card information. They ensure that this information passes securely from the customer to the issuing financial institution. As more investors and users join this market, projections indicate that the market could be worth $132.2 billion by 2030.
Examples of upcoming crypto gateway payments
There are several crypto payment gateways already in operation. Among these is PayAABB, a new product that Asia Broadband, Inc. is currently developing. The company expects to launch this crypto payment gateway platform in June-July.
Asia Broadband is a US-based resource company whose main area of operation is producing, supplying, and selling precious metals such as gold to the Asian market. It also has a digital assets department that recently launched the company’s AABB Gold token dubbed AABBG. The token is fully backed by physical gold that the company mines in Mexico.
Since consumers cannot buy and carry bulky and heavy gold, the company has taken advantage of the innovative cryptocurrency and blockchain technology to allow users to own their gold in gold tokens. Its vertically integrated mine-to-token idea has seen the price of the AABBG token linked to the current spot price of gold, thus lowering the token’s volatility.
Introducing the crypto payment gateway will enable consumers to easily convert their AABBG tokens and other cryptocurrencies that the company supports into fiat, making it easy to transact online. Other players in this market include Amazon Payments, Adyen, Stripe, Wepay, Inc., Bitpay, Inc, Braintree, and Authorize. Net among others.
Crypto payment gateway service is revolutionizing online transactions. As the cryptocurrency concept continues gaining traction globally, this service is attracting players that would probably have taken a long time to adopt cryptocurrency payments.
Creating a platform that maintains digital currency anonymity to consumers while at the same time allowing merchants to receive their payments in their preferred currencies is something that will change the dynamics of cryptocurrencies for the better. The payment gateways might be going against eliminating third parties between two transacting parties but are sure to add a critical and exciting dynamic in the digital currency market space.