The disruptive capacity of blockchain technology has changed the way industries operate across their ecosystem. Significantly, it has changed transaction processes and how businesses receive payments. Modes of payment are changing at the light of speed.
As much as traditional payment systems are still active, some limitations make businesses seek cryptocurrency payment gateway as an option. One of those limitations is delayed international transactions and a lack of automation. But crypto payment gateways are solving these problems.
This guide details everything you need to know about cryptocurrency payment gateway.
What is a Cryptocurrency Payment Gateway?
A cryptocurrency payment gateway is a digital payment processor built on blockchain. It enables business owners to receive digital currencies such as Bitcoin, Ethereum, and Litecoin as payment for products or services purchased by their customers. With a cryptocurrency payment gateway, you can digitally receive payments in crypto and immediately get fiat currency in exchange.
Due to its blockchain nature, the crypto payment gateway eliminates intermediaries such as banks or other financial institutions from such transactions. Likewise, you receive your payments instantly through the secure blockchain network.
Although these payment gateways are not required, they serve as a medium that takes away the hassles of exchanging cryptocurrency in your wallet. Likewise, they help you manage your wallet while focusing on other essential activities. Cryptocurrency payment gateways are gaining adoption and popularity. This is due to the increased global adoption of cryptocurrency as a means of financial exchange.
How a Cryptocurrency Payment Gateway Works
If you understand the mechanism behind the traditional payment gateways, it won’t be challenging to know how cryptocurrency payment gateways, such as Coinbase Commerce, BitPay, and PayAABB, work. Blockchain technology backs them. Before you can leverage the advantage of these platforms, you must open a merchant account to accept crypto payments.
As a result, transactions take place as peer-to-peer transactions. It is noteworthy to understand that each platform allows you to accept the kind of cryptocurrencies available on their platform. However, some cryptocurrency payment gateways, such as Pay AABB, offer you hundreds of digital coins to accept as a payment form. Meanwhile, you can restrict your payment option to a single coin, like Bitcoin only.
While trying to use some cryptocurrency payment gateways, they provide you with more offers than presenting you with only a non-custodial crypto wallet. They can allow you to use their exchange and conversion services. On the other hand, you can connect your existing wallet directly to the platform. This saves you money as you shun using the exchange.
Above all, there is a payment workflow each transaction undergoes. Listed below is a step-by-step process of using the crypto payment gateway:
- Customers select cryptocurrency payment as the payment option at the checkout. It is the same whether in-app, in-store, or on the web.
- They pay the amount equivalent to the exact market value of the cryptocurrency at the transaction time.
- The crypto payment gateway immediately converts the payment to your currency of choice or deposits it directly to your connected wallet.
- Your money is deposited in your local bank based on the selected intervals, or the crypto adds up in your designated crypto wallet.
This is a very transparent process. Your service provider will take up the hassles of receiving, conversion and deposit. You only receive the funds in your local bank or crypto wallet. Ensure that you consult your country’s policy about cryptocurrency before using a cryptocurrency payment gateway. Governments are now working on regulations for using cryptocurrency. Familiarize yourself with them,
Why Do You Need a Cryptocurrency Payment Gateway?
The significance of using a cryptocurrency payment gateway, like PayAABB, is similar to the reasons embedded in cryptocurrency usage. The decentralized technology backing crypto makes it seemingly easy for business owners and customers inclined towards crypto to use the crypto payment option. Below are some essential benefits associated with a cryptocurrency payment gateway:
About 90% of cryptocurrency payment gateways make it very easy to consolidate your funds. As a result, you quickly set up your conversion and transfer process across the platform.
Blockchain technology is known for immutability and the need for extensive verifications. Anonymous third parties conduct these verifications. As a result, the cryptocurrency payment gateway is a secure and transparent network for receiving crypto payments.
When you receive payments via traditional payment systems, you are likely to wait for hours or days before receiving your funds. But crypto payments happen almost immediately. It is proven that you can receive or send cryptocurrencies in a split second.
- Low Fees
When you compare the traditional payment fees to crypto payment fees, you will agree that crypto transactions come with a cheaper fee. At times, you find out that the fiat payment method notoriously charges about five times what a crypto transaction would charge.
7 Significant Features a Cryptocurrency Payment Gateway Must Have
It is only natural for cryptocurrency payment gateways like BitPay and Pay AABB to have numerous features. That is because different businesses have different needs for crypto payment. However, there are some features that a crypto payment gateway platform must have if you are considering using one. See these features as fundamentals for crypto payment gateway.
- Cross-border transactions
Importation and exportation are integral parts of some businesses. As such, they have concerns about payment validation. That means that paying through the traditional fiat systems can take up to 10 days to complete. But with a cryptocurrency payment gateway like Pay AABB, crypto transactions are instant, and businesses can receive payment in a few seconds. This will aid in faster import and export.
- Peer-to-peer transactions
Every crypto payment gateway must allow peer-to-peer transactions to take place. This enables merchants and retailers to receive payment directly from their customers. If this doesn’t happen, the purpose of having a crypto payment gateway is defeated.
- Easy integration
Any cryptocurrency payment gateway should have a crypto plugin that you can easily add to your desired application or platform. The integration is effortless and allows you to start receiving crypto payments.
- OS compatibility
Cryptocurrency payment gateways are built to be compatible with any operating system. There is no need to configure your device or tweak your application specifications before you can use the crypto payment gateway.
- Elimination of intermediaries
Crypto payment solutions ensure no intermediaries or third-party mediating transactions interfere between two different groups. That means that payment made through crypto payment gateways reaches the receiver’s wallet without third-party interference.
- Auto-settlement option
The sophisticated auto-settlement option allows you to connect exchanges directly to crypto payment gateways. As such, received crypto coins are instantly converted to mainstream coins, stablecoins, or fiat currencies.
- Real-time exchange
Due to the volatility of the crypto market, a real-time exchange is critical for a crypto payment gateway to have. This feature helps the platform convert crypto to fiat currency at any given time. Some platforms advanced into making live price charts available for use.
Which Cryptocurrency Payment Gateway is the Best?
There are numerous cryptocurrency payment gateways available across the decentralized space. But suppose you are looking for the best cryptocurrency payment gateway that gives you the right merchant tools and outstanding features. In that case, PayAABB is the best cryptocurrency payment gateway to use.
Do You Need a Cryptocurrency Payment Gateway?
The continued global adoption of cryptocurrency drives businesses to include cryptocurrency payment options in their systems. However, not all business owners fully understand how cryptocurrency works. But you can turn to a cryptocurrency payment gateway, like PayAABB, to handle that for you while you focus on other essential business activities.