What is a Crypto Payment Gateway and How Does It Work?
In spite of the growing popularity and widespread use of digital assets across the world, there are still plenty of ecommerce business owners who remain apprehensive about the cryptocurrency market and the use of bitcoin and altcoins to make purchases.
Indeed, many online sellers are still largely tied to and dependent on the fiat world, and they prefer to limit their websites’ payment options to fiat currencies. Alternatively, they do have a desire to enter the digital coin market, but are unsure where to find secure ways to buy crypto with a debit card in order to get themselves started.
To help bridge this gap for ardent supporters of traditional money and aspiring coin holders, crypto payment gateways come into play. These advanced payment tools enable sellers to process payments using crypto and receive any other currencies of their choosing, including fiat ones.
In this article, we will try to clarify everything regarding cryptocurrency payment gateway services, answer questions like how to integrate a cryptocurrency payment gateway to your website, as well as go over the best payment gateways for cryptocurrencies today.
What is a Crypto Payment Gateway?
A payment gateway integrating cryptocurrency is a payment processor whose function is to convert payments made using digital coins into fiat money like USD or EUR. These are managed by third-party service providers.
An ecommerce cryptocurrency payment gateway creates a win-win situation for merchants and crypto aficionados alike. By incentivizing sellers to adopt crypto as a payment option without having to bother with crypto wallets and exchange accounts, coin holders are able to utilize their digital assets for real-life purposes and expand their possibilities in the online shopping sphere.
The way this works is pretty straightforward: a merchant opens up an account with a crypto payment gateway service provider and integrates their payment processor with his or her website. Then, once a customer selects crypto as a payment method on the website, the digital currency instantly gets converted into fiat money based on the current market value of the digital currency in question. That amount of fiat money gets deposited to the seller’s account with the service provider. After that, the seller can choose to withdraw the money to a specific bank account.
Although this system makes it incredibly convenient to make purchases using crypto, keep in mind that payment gateway service providers are intermediary companies that need to charge a service fee in order to keep operating. Therefore, the price that comes with using cryptocurrency payment gateway services might be considered their biggest downside.
Payment Gateways that Accept Both Fiat and Crypto
A payment gateway that accepts fiat and cryptocurrency is useful for merchants who have a coin wallet and wish to keep building their digital asset collection through sales on their website.
Simply put, a payment gateway that accepts debit cards and cryptocurrency would allow customers to pay for goods and services using fiat currencies, after which the seller could choose whether they wish to convert the payment into crypto, and vice versa.
These gateways offer a lot of versatility and flexibility to both parties, and are key in modernizing any online seller’s business model.
Best Cryptocurrency Payment Gateways
There are many service providers that have their own payment gateway for cryptocurrency out there, and the best way to discern the good ones from the mediocre or straight-up fake ones is by doing a background check and comparing prices and features. Let’s take a look at some of the following companies:
CoinsBank is a user-friendly payment processor for Bitcoin with a good reputation in the industry. It is available for mobile devices through a free app for Android and iOS.
It supports most major fiat currencies, including USD, GBP and EUR. The application includes a one-click instant deposit and withdrawal feature, which is convenient for large companies. It also offers the latest security protocols, including a two-factor authentication system that helps keep your wallet secure.
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This is a really handy app that lets merchants set up and control payments using their phones. It also has the added bonus of supporting approximately 40 types of coins. This means that merchants can greatly increase the number of payment methods they offer on their websites.
Coingate offers various plugins and even allows you to create Bitcoin payment buttons on any website. It charges a 1% commission for transactions, and the transfer time is about 1 hour.
Shopify is one of the most trusted payment gateways for digital currencies. Thousands of companies use it to facilitate Bitcoin payments all around the world.
There is no built-in Shopify cryptocurrency payment gateway, but the platform uses APIs that allow Coinbase and other cryptocurrency payment gateway integration to help make processing crypto payments as simple and transparent as possible.
The only downside to Shopify is that merchants are required to sign up for an account in order to use the payment processing system. Depending on which payment processor you end up selecting, transaction fees may vary.
A great feature that Bitpay offers is the ability to set the speed of a withdrawal transaction in any desired time period. It also has two-factor authentication, which helps make accounts even more secure. In general, it is designed to be as simple as possible for users who aren’t that tech-savvy.
This payment gateway offers a free daily transaction cap of $1,000 and annual transactions of $10,000 before charging a 1% fee, making it a great choice for small businesses and startups. The only downside is that Bitpay currently only supports direct bank deposits in 38 countries.
Coinbase is the largest US exchange platform for Bitcoin, and also one of the largest global cryptocurrency exchanges in general. Due to its high number of users, Coinbase has the resources to develop some unique features.
Since the company is based in the US, it is obliged to comply with all foreign exchange laws, making it one of the most reliable exchanges on the market.
Coinbase can be used both as a payment gateway as well as a regular exchange. This ensures instant conversion without the users needing to request a withdrawal. The exchange offers this functionality completely free of charge for the first million transactions, after which they charge a commission fee of 1%.
Why You Should Use a Crypto Payment Gateway on Your Website
The use of gateways is crucial to solving several fundamental problems of any online business.
First off, the use of innovative technologies can result in attracting more customers who are forward-thinking and actively deal with digital assets. Payment systems using crypto are developing every day, enabling users to make payments without significant risks and high bank fees.
Furthermore, all developed countries have recently switched to a financial model wherein the majority of transactions utilize credit and debit as a basis, and no physical form of money is ever exchanged. Crypto assets are simply a step in the right direction and a future that is already here. Using technologies such as crypto payment gateways accelerates your communication with newer generations that value speed, simplicity and novelty in financial transactions.
Financial transaction data is stored on the blockchain indefinitely, which mitigates the confusion, misinformation, anxiety and speculation that a source of value that is unregulated and decentralized may create. This simplifies the execution of transactions, and also allows you not to bother with the question of how to do accounting for cryptocurrency as a business owner.
Finally, the main objective of any company should be the presentation of its products and the speed and ease with which a range of customers can purchase them. That is why offering cryptocurrencies as a payment method should be an imperative for your business model going forward, and payment gateways are incredibly convenient ways of helping you make that leap.
Crypto Journalist (Head of SEO at TradeCrypto)
Man who simply bought some BTC for domestic needs in 2014 and then forgot about it till 2017.
The dude who got Etherium in 2017 by misclick and sold it in 2018 “just to try”.
Lost 1 Florida house in XEM in 2018, Sviatoslav finally decided to trade reasonably and now he is one of the most analytical and data-driven trader in Crypto Industry.
Has Bachelor Degree of Chinese Interpreter and deep practical experience in competitive niches SEO.