There are two main types of crypto payment gateways:

°Custodial gateways. They hold funds temporarily before transferring them to the merchant. It adds a layer of convenience and automated services, like currency conversion.

°Non-custodial gateways. They send payments straight to the merchant’s wallet without holding funds. It can offer more control and security, but requires merchants to manage their own wallets.

Each option fits different business needs depending on the desired level of control and automation. But in general, crypto payment gateways can be used by businesses engaged in different industries, from eCommerce and iGaming to tourism and luxury retail.

What are the key functions of a crypto payment gateway?

Here are some core functions that many gateways provide:

Accept crypto payments. Gateways let customers pay using various cryptocurrencies through websites or apps. The set of supported cryptocurrencies is determined by each concrete provider. They handle the transaction from the buyer’s wallet to the point of confirmation on the blockchain.

Fiat conversion. Many gateways offer the option to convert digital currency payments into local fiat currency, either instantly or on request. It can protect merchants from sudden value changes and simplify accounting.

Send crypto. Crypto payment gateways allow merchants to make outgoing payments using cryptocurrency. It can help businesses pay suppliers, contractors, or remote employees almost around the world.

Multi-currency support. Most services support a range of cryptocurrencies, offering flexibility for global operations. For example, CryptoProcessing supports over 20 popular cryptocurrencies.

Integration options. These platforms often integrate with popular eCommerce tools such as Shopify and WooCommerce. Adding crypto as a payment option becomes simple, even without technical expertise, as the providers often offer their assistance.

What are the advantages and disadvantages of crypto payment gateway?

Despite the growing interest in crypto payments, businesses must assess both the pros and cons of this payment option before integration to decide if it fits the bill.

Advantages of crypto payment gateways:

You can accept cryptocurrency payments from customers in many countries, subject to local regulations and service availability. Crypto payments are processed 24/7.

You don’t need deep technical knowledge of cryptocurrencies. The provider usually handles the complex parts. However, you might need some basic tools or support to manage the system.

Many gateways can settle payments at current market rates, which lowers the risk of losing value due to price changes during transaction processing.

While many gateways are designed with customer privacy in mind, their specific data handling practices depend on the provider’s policies and applicable regulations.

Disadvantages of crypto payment gateways:

Cryptocurrencies were designed to bypass intermediaries, but gateways reintroduce a third party into the payment flow.

You depend on the gateway provider’s reliability to ensure timely payment processing.

If the gateway is hacked or experiences a security breach before funds reach your wallet, there is a risk of losing those assets.