As cryptocurrencies gain more fans from different walks of life, it is very important for businesses to start accepting these digital currencies. With the ever-increasing number of people holding cryptocurrencies, businesses and shops are finding it more profitable to receive crypto payments.
Cryptocurrency payment gateways allow all types of institutions or businesses to allow their customers to pay for goods and service fees using cryptocurrencies instead of fiat money. This means that there is more than one viable payment option, welcoming more people to cash in on their crypto assets.
Since the number of cryptocurrency users is growing rapidly every year and newer cryptocurrencies continue to appear on the market, it should come as no surprise that major providers do not want to miss the opportunity to update with the differences in the financial world. After all, what matters most after the customer acquisition process is ensuring secure financial transactions, which continue to occur without interruption, thus ensuring successful business flow – something that cryptocurrency payments can facilitate.
This article was edited by our Managing Editor, Angel Marinov. In the past three years, he has been involved in the business development of various cryptocurrency payment solutions, such as cryptocurrency payment gateway and crypto banking solutions. During this time period, Angel realized that there was a significant lack of information about what exactly a crypto payment gateway was and why a company needed one. That’s why we decided to share our knowledge about this topic.
How does a cryptocurrency payment gateway work?
Here is an overview of the process of using a cryptocurrency payment gateway:
- At checkout, the company’s customer chooses the option to pay in their own cryptocurrencies.
- The amount of cryptocurrency they spend is calculated by the current market value of the cryptocurrency in question.
- The payment system will convert the acquired assets into the currency of the merchant’s choice or will transfer cryptocurrencies directly to the merchant’s account.
- All funds are stored securely in the merchant’s wallet, from which they can be withdrawn and transferred to any location desired by the owner.
This 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 affairs. As a trader, you don’t have to worry about knowing anything about cryptocurrencies. Your most important task is to sign a contract with a reliable provider that is transparent about all dealings with finances. There are also different types of gates – Crypto gateway to fiat currencies, Fiat currencies to crypto payment gatewayor those that can process paper transactions such as Payment Gateway X1.
Always make an effort to update the regulations your country imposes on cryptocurrencies before entering into business relationships with a payment gateway!
Here’s a great YouTube video with an explanation of how crypto 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 are not very knowledgeable and experienced in the field of cryptocurrencies, then a cryptocurrency payment gateway is perfect for your needs. This payment processor will be the intermediary you need, if you would like someone else to handle everything related to accepting cryptocurrency payments. Furthermore, you can choose the fiat currency you would like the gateway to convert the received assets into.
Some of the most popular cryptocurrency payment gateways are Coinbase, BitPay, NOWPayments, and AlphaCoins. Each of them supports a variety of cryptocurrencies and has a different set of tools that allow for larger payouts to be completed and assets to be managed easier. Some of these providers also offer cryptocurrency POS terminals, through which you can easily accept cryptocurrency payments in your physical store.
Read more about Encrypted POS terminals.
Pros and cons of crypto payment gateways
The ability to provide more than one payment method is of great importance to the well-being of every business. Giving options to your customers will demonstrate that you are an established merchant and open to improving their services. But there are still many salespeople who are skeptical about cryptocurrency payments or simply haven’t made the effort to research how efficiently and easily they can integrate cryptocurrency payment gateways into their direct-to-consumer business model.
In order to gain a better understanding of the benefits and drawbacks of implementing these payment processors, one should take the time to conduct their own research. Fortunately, we were able to compile a list of the pros and cons of cryptocurrency payments and the gateways that enable them.
Pros of crypto 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 as they can leave all the work to the service provider.
- Cryptocurrency transactions have lower fees compared to fiat transactions.
- The payment process is much faster.
- The portal allows merchants to accept payments from all over the world.
- Customers have the option to use different cryptocurrencies to make payment.
- If there are technical issues, it is the portal provider that will have to address them.
Read more about Benefits of accepting cryptocurrency payments for your business.
Disadvantages of Crypto Payment Gateways
- Choosing a secure and reliable encryption gateway provider can be difficult due to the large amount of options available in the market.
- There’s a chance that most of your customers won’t bother taking advantage of the different payment methods you offer. That’s why you have to really get to know your target customers before you offer 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 greatest thing that will happen with people’s money, there are still a lot of unknowns regarding these digital currencies. It would be unfair to state that just because it has allowed many to make fortunes, everyone can have the exact same experience with cryptocurrencies. Recognizing its benefits to less fortunate people and the security advantages of blockchain technology is not enough to gain the trust of the masses.
However, there are more and more institutions of global importance, which are starting to recognize the advantages and disadvantages of cryptocurrencies, which has led to the implementation of more regulatory measures and increased awareness when it comes to investing in cryptocurrencies.
If you are feeling overwhelmed by this and want to know how to choose the best encrypted payment gateway for your site, check it out Check this guide.
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