By now you have probably realized that cryptocurrency can no longer be ignored. As each new day passes, cryptocurrencies and digital payments with crypto are continuing to gain traction in the global economy.
One of the key elements driving this trend is the adoption of crypto payment gateways by businesses from all kinds of industries.
In this article, we will explore the importance of crypto payments in 2023 and how they are changing the way businesses handle online transactions.
Understanding cryptocurrency payment gateways
A cryptocurrency payment gateway is a service that facilitates the processing and receipt of cryptocurrency payments for merchants.
Crypto payment gateways like CoinsPaid, PayPal and Coinbase Commerce enable businesses to accept cryptocurrencies alongside fiat money, simplifying transactions and expanding payment options for customers.
These payment providers allow businesses to receive payments in Bitcoin, USDT and many other currencies, which can then be converted into fiat currencies and deposited into the bank accounts of their choice.
This helps businesses offer alternative payment options to customers, removing uncertainties concerning cryptocurrencies and enhancing customer experience.
Simplified transactions using crypto payment processors
A crypto payment processor serves as a bridge between merchants and customers, making it simple for businesses to accept cryptocurrency as payment.
They settle transactions in real-time, allowing for instant transaction settlements and improved customer experience.
Of these crypto payment processors, there are typically two distinct types of gatewayscustodial and non-custodial.
Custodial crypto payment gateways hold the cryptocurrency generated through sales from merchants in gateway accounts, which can be converted to a preferred fiat currency by the merchant at any time.
Non-custodial gateways, however, process payments, convert the crypto into fiat and instantly transfer the profit to the merchant’s bank account.
How crypto payment gateways work and costs
As mentioned earlier, crypto payment processors work as a middleman between customers and merchants when it comes to accepting crypto payments so that the merchants don’t have to develop an entirely new crypto payment system on their site.
A cryptocurrency payment system streamlines the payment process by instantly converting the payment into the fiat currency of the merchant’s choice and depositing the funds into their account for withdrawal or other purposes.
By using a crypto gateway, merchants avoid the expensive and lengthy process of building their own platform.
When processing payments, these crypto gateways take a small commissionbut at a much lower rate than traditional forms of payment (i.e., credit cards).
For example, CoinsPaid only charges a 0.8% fee per transaction but also offers other options that can potentially bring that fee down to 0.4%.
Meanwhile, credit card processors like American Express, Visa, Mastercard, etc., charge anywhere from three to five percent or higher.
Three advantages of crypto payment gateways
Crypto payment gateways enable instant transaction settlements, allowing for quick and efficient payments between merchants and customers.
This reduces waiting times for both parties and improves the overall customer experience.
Thanks to the transparent and immutable nature of blockchain networks, crypto payment gateways provide merchants with protection against chargeback fraud.
This ensures that once a transaction is completed, it cannot be reversed, offering greater security for merchants.
Support for multiple cryptocurrencies
Crypto payment gateways typically support a wide range of cryptocurrencies, allowing businesses to accept various digital assets as means of payment.
This increases the flexibility of payment options for customers and helps merchants cater to a diverse audience, potentially increasing their market reach.
Three disadvantages of crypto payment gateways
Crypto payment gateways act as intermediaries between merchants and customers, meaning the settlement does not take place in a fully decentralized manner.
This goes against the core principle of decentralization that cryptocurrencies were built upon, and some users may view this as a drawback.
Using a crypto payment gateway can be more expensive than making payments directly on the blockchain.
As middlemen, these gateways add their own costs and fees to the transaction, which may result in higher expenses for both merchants and customers compared to direct blockchain transactions.
Trust and security concerns
Since crypto payment gateways are centralized organizations, merchants must place a certain level of trust in the payment processor to deliver high-quality, reliable and secure service.
If a gateway experiences interruptions or gets hacked, merchants may face delayed payments or even lose their funds, raising concerns about the safety and reliability of such services.
Are crypto payment gateways safe
Crypto payment gateways can be safe, but the level of safety depends on the service provider’s security measures, operational practices and overall reputation.
To ensure the safety of a crypto payment gateway, merchants should conduct due diligence before selecting a provider.
Some factors to consider include the following.
Storage and security measures
Investigate how the crypto payment gateway stores cryptocurrencies and subsequent fiat payments.
Check if they use secure storage practices such as cold wallets and multi-signature wallets to minimize the risk of hacks and thefts.
Research the platform’s history regarding hacks, scams or security breaches. A provider with a strong track record of maintaining security and addressing potential vulnerabilities is more likely to be a safer option.
Customer support and reputation
Verify if the crypto payment gateway offers reliable customer support to address any issues that may arise during transactions.
Furthermore, assess the provider’s reputation by reading reviews from specialized websites and learning about other users’ experiences with the service.
While no system can guarantee complete safety, considering these factors can help merchants choose a crypto payment gateway with a higher level of security and reliability.
Choosing the best crypto payment gateway of 2023
Selecting the best crypto payment gateway of 2023 should involve reviewing the reputation of each platform, checking customer support availability and seeing which option has the most features that best fit your needs.
If we look at CoinsPaid, for example, we can see that it has been around for over nine years, processes more than one billion euros per month and services over 800 different merchants that have a combined audience base of millions.
It also happens to process about eight percent of all on-chain Bitcoin transactions, which has a lot to say about the level of trust they have achieved in the global market.
By reviewing their services and comparing them to other notable competitors, merchants can make the best decision when choosing a crypto payment processor.
In 2023, the importance of crypto payments continues to grow as more businesses adopt cryptocurrency payment gateways.
These gateways have made it possible for businesses to accept crypto without the hassle of creating their own crypto payment system.
Thanks to this, merchants should no longer be waiting to reach their new crypto audience.
By understanding the advantages and disadvantages of these gateways outlined in this article, merchants can make informed decisions about whether to accept cryptocurrencies and which crypto payment processors to use.