A In the same way that payment processors, gateways, and credit cards are used to process payments, cryptocurrency payment gateways process payments in digital currencies. A crypto-currency gateway enables you to accept digital payments and receive fiat currency instantly in return.

You can offer more payment options through these companies and remove any uncertainty you might have about cryptocurrency.

You do not need payment gateways for digital currencies. Using an open-source Bitcoin wallet for cryptocurrency payments is perfectly acceptable; however, gateways take care of exchanging the cryptocurrency and managing the wallet for you.

A crypto-payment gateway: How Does It Work?

A payment gateway is a company that takes on the risk of cryptocurrency payments by facilitating transactions between merchants and customers via their wallet(s).

Inflow of payments

Following are the steps of the workflow:

1. Payment is made in cryptocurrency at checkout (in-store, in app, or on the web).
2. During the transaction, they pay you the fair market value of the digital currency.
3. With the cryptocurrency payment service, you can choose the currency in which the payment is converted.
4. You add money to your account with the provider, which is deposited into your bank account in periodic intervals determined in your service contract.

Since your cryptocurrency service provider places the funds into your account, the process is transparent to you, since you don’t have to worry about cryptocurrencies.

Charges

Transfers are handled through a cryptocurrency wallet provided by the provider. The provider will be charged a fee by the currency network’s transaction validators if the currency has a payment system.

Those who verify blocks and transactions in the blockchain are compensated in small increments in the cryptocurrency transaction they validated in crypto exchange for their use of energy and computational power.

Providers charge you for these fees and pass them on to you so that they can continue to operate and offer their services.

Positives

• With a payment gateway, you can remove the anonymity of who you’re dealing with while maintaining your customers’ preferences.
• If there are any payment problems, you can get in touch with someone.
• In any cryptocurrency your provider will accept, you can accept payments from anywhere in the world.
• Your provider transfers the funds to you from your account with them.
• It’s not necessary to understand cryptocurrency or to worry about it.
• As a result, the volatility risk is reduced-that is, the risk of losing value while the blockchain is verifying your transaction-by paying you the market price at the time the transaction was conducted.

Negatives

• Cryptocurrencies were designed to bypass payment gateways, which are third parties.
• Because you may be receiving payments from around the world and in different time zones, you need to trust that the provider will be able to maintain uninterrupted service.
• A gateway is a company that provides a service; therefore, they will market themselves in a way that makes it seem like you need their service when you actually don’t.
• Transaction fees are low when you use your wallet; they are higher when you use a cryptocurrency payment gateway.
• During the time it takes for the funds to be transferred, if the payment gateway is compromised, you will lose the funds in your account.