If you happen to be a business interested in accepting cryptocurrency transactions for customers to make online payments for goods and services, then cryptocurrency payment gateways should be worth considering at this point.
In as much as we have various ways to score a March Madness bracket, there are also various ways that you can go about adopting cryptocurrency on your virtual platforms. So if you’re interested in learning more about this, stay tuned for more.
Cryptocurrency Payment Gateways: An Overview
Cryptocurrency payment gateways are payment processors that businesses can use for digital currencies when customers are looking to purchase goods and services online. Similar to other payment services like card payments and e-wallets, they allow businesses to accept virtual payments and exchange the payment into fiat currency.
Companies that work with these gateways remove all forms of uncertainty or reservations that any business or customer might have when using cryptocurrencies. They also allow these companies to offer their customers more payment options to accommodate various preferences.
As a company with an online presence in products and services, you need to acknowledge that cryptocurrencies are gradually becoming a widely accepted payment option for many merchants. These gateways simply act as facilitators for transactions taking place between customers and merchants. In addition to this, they create added trust for merchants and customers who question the credibility of cryptocurrencies since the gateways offer companies the chance to accept cryptos while offering fiat currency in exchange.
How Does It Work?
In a nutshell, these gateways are companies that take a risk to facilitate crypto payments through the use of wallets so that merchants and customers can have a platform to transact on.
With the process itself, businesses can expect to encounter the following:
- The customer will select the option to make a payment using a cryptocurrency while checking out either in-store, by using an app, or on the web.
- The customer will pay you, the business, a crypto amount that’s equivalent to the fair market value of the digital currency in real-time.
- The gateway will convert the payment into your currency of choice instantly.
- The money will reflect in your business account with the provider in intervals that your business will decide upon in the service contract.
The process of how everything will be run will remain transparent to you since you won’t be responsible for handling the cryptocurrency. One thing you should keep in mind, however, is that you should remain informed of your country’s regulations regarding cryptocurrencies before proceeding to create an account with the gateway. Gateway services are offered worldwide, and more countries are gradually becoming accustomed to the idea of digital currency use.
In terms of fees, the provider of the service will be the one responsible for facilitating the transfer using a cryptocurrency wallet. Should the currency be designed using a payment system, the service provider will take on the feed being charged. These fees are applied by using the currency network’s transaction validators.
The Pros And Cons
The core nature of cryptocurrency transactions lies within the ability to maintain anonymity and decentralization. Thanks to the help of its systems, two parties can make exchanges virtually with ease, despite some merchants sharing their concerns about this. For this reason, it’s vital that you are aware of the pros and cons associated with payment gateways to make an informed decision on whether or not you’d like to proceed.
Pros
The advantages to using payment gateways include the following:
- The removal of customer anonymity
- Businesses have a contact to get in touch with regarding any payment issues
- Payments can be accepted from anywhere in the world
- Funds are transferred to your account with your provider
- There’s no need to have a comprehensive understanding of cryptocurrencies
- It reduces risks associated with high volatility
Cons
The disadvantages to using payment gateways include the following:
- Payment gateways are third parties that cryptocurrencies are initially trying to avoid
- You’re heavily reliant on your provider
- You will be charged small transaction fees
- Should the gateway get hacked, you will lose all your money
