Several key industries like healthcare, retail, and entertainment have benefitted from blockchain technology. This new technology has the potential to change the way the world of finance and payments functions. Payment modes have come a long way from physical currency notes to plastic money, digital transactions, and now cryptocurrencies. Thus, payment methods should also evolve as time and requirements change. Read more about at Multibank.
Blockchain brings into the picture decentralized payment getaways that have an edge over traditional systems. There’s no need to worry about prolonged processing time, and fretting over transactions that need to take place over weekends or bank holidays. Blockchain-powered payment getaways turn out to be efficient in many ways. Crypto payment systems are known to process payments and accept cryptocurrencies seamlessly via a transparent network.
Understanding crypto payment gateway
Investors, merchants, and traders can all benefit from a system that processes and accepts payments done via cryptocurrencies. A crypto payment gateway does exactly this without compromising financial securities. This brilliant payment processing platform lets users transfer payments directly from one cryptocurrency wallet to another. These gateways don’t just transfer funds, they are also responsible for sharing sensitive wallet-related data from the buyer to the vendor. Now that more businesses are keen on having quick, safe, and efficient payment systems, several organizations are now adopting blockchain technology.
These payment systems are also laced with features unique to blockchains. It includes immutable and transparent records along with decentralized transactions. The latter is particularly great because it puts intermediaries out of the picture, speeding up the entire payment process. Typically, a crypto payment gateway will have:
User sign-in/sign up
My wallet feature with withdrawal functionality
Deposit and withdrawal history
API key generation
View user deposit and withdrawal history
Merchant payment history
Content management system
Benefits of crypto payment gateway
Freedom from chargebacks
There is no scope for refund or chargebacks. If the payment has been processed via the payment gateway, it cannot be undone. This aspect is particularly popular with business owners who operate high-risk jobs.
Centralized payment gateways can be very stringent about customer verification. On the other hand, KYC or registration is not a prerequisite with decentralized payment gateways. Traders and investors can carry out their trades on the network anonymously. If you are a vendor with privacy concerns, you can consider selling digital assets through such a payment gateway.
Not having any intermediaries is a key reason why crypto payments are processed quickly. Many times they get done under 10 seconds and thus, a user can exchange the crypto for fiat currencies almost instantly.
How does the payment gateway work?
You will understand crypto mechanisms faster if you have a sound knowledge of how traditional payment gateways function. Crypto payment gateways that operate on blockchain technology replace a typical credit card with a mandatory digital wallet needed to facilitate payments in cryptocurrencies. Transactions take place on a peer-to-peer network where the data is exchanged and recorded on the blockchain after validation. Do keep in mind that in this case wallet addresses are equivalent to identities for both the buyer and the seller.
Every time a data block is added to the blockchain, it gets saved for posterity and cannot be deleted or edited. This is why crypto payment gateways allow access to a decentralized payment model. Here’s how it works:
- As soon as an order is placed, the buyer’s data is recorded, encrypted and sent to the seller’s web server. This is done through an SSL connection.
- The seller assesses the blockchain with the help of nodes that validate a transaction. This is possible on an integrated payment gateway.
- After confirmation, the coins are sent to the seller’s account and both sides are notified about payment confirmation.
- The seller can choose to convert the crypto tokens into fiat currencies at any given time through the cryptocurrency payment gateway.
A good payment gateway must include the following. Note that these are basic aspects and the gateway could be customized further as per a business’ requirement.
A decentralized payment gateway can be integrated into the already existing payment models. Thus, retailers and business owners could directly receive payments from their customers using this peer-to-peer system. It fastens the transactions and allows safe access to the payment portal.
A traditional transaction that involves fiat currencies could take anywhere between five to 15 days for completion. A crypto transaction can be done within a few minutes. This transaction speed is beneficial for all businesses irrespective of their size. It is particularly useful for facilitating quick payments on import and export of goods or services.
You can integrate a cryptocurrency payment gateway seamlessly into an existing platform/application. A vendor could use a crypto plugin on an application of their choice to accept crypto payments.
It is no secret that cryptocurrency markets are extremely volatile. Currency values reach highs and lows nearly every second day and in such a case, it helps to have a payment gateway that allows instant crypto-to-fiat conversion. This happens because of the real-time exchange feature which is common in most crypto payment gateways. There are certain decentralized payment gateways that also feature live price charts and other types of market-related details.
Auto Settlement option
Connecting with payment gateways is easy when using a flexible auto settlement option. It becomes much simpler to convert cryptocurrencies into stable coins or fiat currencies by clicking a few buttons. For instance, there are many exchange platforms on which an investor can exchange their crypto tokens for USD, TUSD, USDT, and USDC by just integrating the payment gateway.
Donation facility. There are numerous non-profit and non-governmental organizations around the world that now accept donations through cryptocurrencies. They have also embraced the change that comes with more and more people using digital currencies. It is a key trend and crypto payment gateways are now having a donation feature on their platforms to encourage the same. These could be anything from QR codes, currency list, wallet address, and so on.