What is a Multi-Cryptocurrency Payment Gateway?
A cryptocurrency payment gateway is a decentralized platform that allows the participants to conduct payments in the form of digital currencies.
Best Cryptocurrency payment gateways are aimed at developing a platform that facilitates the payment processes by reducing the intermediaries involved. The gateways are also intended to increase the use of digital currencies in our daily life.
With the aid of a blockchain-backed ecosystem, crypto payments are highly encrypted. Therefore, this provides an additional layer of security when compared to the traditional digital payments. Besides, they regulate the global transactions in various currencies between suppliers and companies and businesses and consumers, at a fraction of the cost.
Smart Contracts (self-executing computer programs) are employed in payment gateways. Their primary purpose is to negotiate and settle the payment agreements between the parties involved in a transaction. When an agreement is created, smart contracts verify the accuracy of the payment. After that, they expedite it to the respective counterparty. This in turn, eliminates the need for human intervention and provides a high degree of automation.
Smart Contract Audit is a method used to verify and validate transactions. This purpose of smart contracts helps to increase the transparency of the payment process along with an additional layer of security.
How Crypto Payment Gateways differ from Conventional Payment Gateways?
Traditional payments often encounter high risks and restrictions, and in particular, cross-border transactions.
A decentralized cryptocurrency payment gateway can accept more multiple digital currencies. The decentralized nature of the system also means that payments are more trustworthy and less defenseless to ransomware and malicious attacks. There is no human action involved; therefore, reducing counterfeit activities and errors. Once the payment is recorded and confirmed on a blockchain network, no individual can alter it.
Benefits of Adopting Crypto Payment Gateway
Lower Transaction Fees
When companies process payments done through credit or debit cards, the transaction besides involving the merchant and the card company, it also adds other intermediaries to the process. The intermediaries, together with charge a fee. For example, a normal business credit card transaction fee is somewhere between 3 percent and 5 percent.
With cryptocurrencies in action, the payment is transported directly from the customer to the merchant, therefore, eliminating all the intermediary parties involved and thus reducing the fees to a greater extent. Generally, crypto payment fees are between zero and 1 percent. Therefore, by offering cryptos as a mode of payment, you can save significant money on each sale.
Enhanced Security and Privacy
Whether a transaction using a card is made at the point of sale (POS) or digitally, such payments are an open-source of gifts for frauds and hackers. They can quickly steal personal information of the customers and use it for all kinds of illegal activities and even steal money. Small businesses are their favorite targets since they often lack the security standards that a more substantial enterprise usually has.
When making payments through cryptocurrencies, consumers are not required to share any personal data. The transaction fees are anonymous, and so there is no personal identification for the hackers to steal. Some people value their privacy greatly. So, it’s recommended they prefer cryptocurrency over other payment options since there are no possible ways to identify the purchaser.
A recent study by Statista on online shopping found that “17% of customers decided not to make an online purchase due to security concerns, and another 18% failed to purchase because the company required too much personal data in its security check.”
No Chargebacks or Payment Disputes
Cryptocurrency transactions are final, and the consumers cannot contest them. So in a crypto payment, customers can’t claim they didn’t authorize the payment. Also, they cannot report that they are unhappy with your product or service. This eliminates a significant risk of doing business when consumers buy a product from you and then dispute the payment with their payment authorization company.
The blockchain technology ensures that funds are available in the customer’s wallet before the transaction is complete. Therefore, making it nearly impossible for the consumers to initiate a transaction without the required funds in their crypto wallet. Unlike most credit card payment services, there are no holdbacks. When someone pays with cryptocurrency, the merchant/receiver receives all the funds right away.
With the advancement in technology, companies can do business with any person across the world. All the individual needs to have is a reliable internet connection. Even small enterprises can sell their goods and services or purchase supplies and equipment from any part of the world.
Blockchain is the technology that’s backing cryptocurrencies; hence they are decentralized. There is no government or authority to regulate the cryptos, and so businesses can conduct cross-border transactions hassle-free with no foreign currency transaction fee or exchange rates.
Attracting a Wider Audience
Apart from foreign customers, businesses can target consumers who are really into cryptocurrencies. Also, there is an increasing range of audience who specifically look for companies accepting cryptocurrency payments gateways.
By adding crypto as a payment option, companies can gain a serious advantage over their competitors that do not accept cryptos. And with an increasing number of brands, financial firms, and other institutions receiving digital currencies every day, sooner this payment option will be the rule rather than the exception.