Is it possible to find a credit card to a crypto payment gateway? But more importantly, what is a crypto payment gateway? Is this something that can improve your business? And what are some of the advantages this system will bring?
Here, you will find all you need to know about crypto gateways as well as the answer to why these systems are becoming so popular among businesses.
What Is a Crypto Payment Gateway?
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What are crypto payment gateways? A crypto gateway is a service that will allow merchants to accept payments in cryptocurrencies. In the past couple of years, more and more businesses have been exploring this option, and it is always good to have multiple payment methods.
After all, some people use popular cryptocurrencies such as Ethereum or Bitcoin, and it is easier for them to use them as a payment method. But without the getaway, the transaction would be impossible.
So, the cryptocurrency payment gateway will act as an intermediary between the customer and the merchant, simplifying the entire process.
How Crypto Payment Gateways Work?
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If you are interested in learning how crypto payment gateway works, there are a couple of important details to explain. Firstly, the merchant does not need to have a crypto wallet to accept payments in cryptocurrencies.
The second part, which is quite important for merchants, is that they are able to convert currencies, without spending too much money on the entire process. So, how does it work? When a customer initiates a transaction (makes a purchase), they will send money to a unique address created by the crypto gateway.
After that, the gateway will convert the currency, and send money to the merchant’s bank account after the transaction is verified. As you can see, the merchant doesn’t need to have a crypto wallet, and the entire process is automated.
On-Chain vs. Off-Chain Payment Gateways
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If you take a closer look at crypto gateways, you will notice that there are two main types based on how they work. You can see an on-chain and an off-chain gateway. The main difference between them is where the process takes place.
With on-chain gateways, the entire process is completed on the blockchain (hence the name). These transactions can have a longer lag time, and it might take a while for the process to be finished. It mostly depends on the number of transactions in the queue and the network load.
And this is one of many reasons off-chain payment gateways are becoming so popular. As you can probably guess by now, these transactions involve moving the value outside of the blockchain. The process can be both free and quick, but even if fees are included, they are rather low.
Naturally, it is possible for off-chain transactions to still be recorded on-chain, but that depends on the specific case.
Crypto Payment Gateway vs. Fiat Payment Gateway
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What is the difference between crypto and fiat payment gateways? You might have heard the term fiat used before, and if you are unsure what it means, here’s a simple answer. Fiat currencies are currencies that are recognized by the government (and issued by the government).
This money is not backed by any physical commodity such as silver or gold, and the value is determined by the relationship between supply and demand. Examples of fiat currencies are the U.S. dollar, euro, and the majority of modern paper currencies.
As a result, a fiat payment gateway is the intermediate between the merchant and the customer that allows them to make payments in fiat currencies such as dollars. So, if you buy something online using dollars, the intermediate will process the transaction and move funds from your account to the merchant’s account.
The idea behind these two gateways is the same, and the only difference is in the currencies you will be using. As mentioned earlier, the crypto gateway allows you to pay using cryptocurrencies instead of using traditional fiat money.
Benefits of Crypto Payment Gateways
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There are many reasons and benefits of using a crypto payment gateway for both customers and merchants. The entire process is simpler, faster, and more secure. Using an off-chain gateway means that the process will be finished in a few minutes, and the costs are significantly lower.
These costs will affect both merchants and customers. Using a crypto payment gateway API also means that the integration is seamless, and you will get access to a global market. The nature of cryptocurrencies improves almost every single aspect of the process while offering lower transaction fees.
And you won’t need to worry about cryptocurrencies at all. Even if you are not a fan of them, having a crypto gateway is an excellent idea. You will still receive money in your preferred currency, and you don’t need to own a crypto wallet.
Are Crypto Payment Gateways Safe
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The short answer is yes. One downside to the entire process is that a gateway is a third-party system. And that is the very idea cryptocurrencies tried to avoid. But at the same time, there are many different ways to improve the security of each transaction.
Payment gateway crypto systems use secure methods such as SSL encryptions and cold wallets, and you can always enable two-factor authentication to make it even safer. The gateway is based on blockchain technology, which means that it will inherit all the security features that come with it.
Furthermore, involved parties are able to maintain a higher level of anonymity thanks to the nature of blockchain.
How ReactivePay Can Help
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ReactivePay offers a variety of cloud solutions for financial services across the globe. If you are interested in getting an API for your bank account, fundraiser, online banking, or nearly any other financial system, ReactivePay is the way to go.
The unique approach will allow you to get a solution tailored for you and your business. You will be able to implement a system that will improve each and every transaction while lowering costs during the process.
If you are curious to learn more about your potential options and ways to improve, you can always contact us at the ReactivePay website.