The present commercial world is becoming quickly saturated by the ever-growing popularity and ownership of cryptocurrency. Whether it be Bitcoin, Ethereum, Litecoin, or any of the other 1,000+ cryptocurrencies now in circulation, cryptocurrency and NFT trading are becoming common in commerce. With an estimated over 100 million people worldwide owning some form of cryptocurrency, the eCommerce markets are in a deeper need of offering crypto as a valid avenue of purchase.
This is where a crypto payment gateway comes in. With a number of gateway options, as well as different commerce hosting, finding the right crypto payment gateway, and the best way to utilize one requires understanding what crypto payment gateways are, and how they work.
What are Crypto Payment Gateways? Why do I Need Them?
The first question we need to ask when looking for, and understanding crypto payment gateways, is what are they in the first place?
Let’s start by briefly examining cryptocurrency in general. Without going in-depth regarding the blockchain, mining, and decentralized currency, any casual crypto observer will quickly notice that cryptocurrency fluctuates in value frequently—in many cases more drastically or at a higher frequency than some stocks.
Take Bitcoin, for instance. On March 21st of this year, one Bitcoin was worth 41,017.70 USD. On March 29th, however, one Bitcoin was worth 47,454.10 USD.
If you are running an eCommerce business, you have a product that is worth a specific value. If you are selling a pair of shoes, for example, they may sell for $50. $50 worth of Bitcoin on one day can be very different the next day. Thus, as a business, trading cryptocurrency for your product can be a risky game.
This is where crypto payment gateways come in. A crypto payment gateway assumes the risk with its own wallet and steps in between the consumer and the merchant, accepting cryptocurrency from the consumer, and immediately providing the merchant with the fair market value of the traded currency.
Thus, the merchant never receives actual cryptocurrency, ensuring that the product sold—say it’s the pair of shoes from before—retains its $50 value.
Volatility and Currency
Among the biggest reasons to work with a crypto payment gateway is to remove volatility risk, and allow better currency conversion.
Cryptocurrency is at times so volatile that the value of a coin may increase or decrease within the time it takes for purchase to complete. This means that if you are a merchant making a direct trade of one Ethereum for your $3,000 product, by the end of the sale that one Ethereum could be only worth $2,990. This is not only highly inconvenient for most merchants, but unnecessarily risky. Furthermore, it requires merchants to keep a consistent eye on cryptocurrency trends, something most people owning an eCommerce business do not have the bandwidth to do.
A crypto payment gateway takes on the volatility for you, essentially agreeing that regardless of fluctuation, your business receives the predetermined value.
The scenario of value is another place where crypto payment gateways are excellent tools, as currency conversion becomes easier.
Rather than worrying about receiving payment in Euros and having to convert to USD, or losing a customer to paying an exchange rate fee, most crypto payment gateways will pay you in whatever currency you desire, its value directly associated with the value of the coin or token.
The other opportunity that crypto payment gateways provide is diversification and developing a crypto portfolio. Maybe you don’t want to convert your crypto payments to currency immediately and want to start investing in cryptocurrency.
Some crypto payment gateways give you avenues to build a crypto wallet, trade certain currencies for others, and choose when you want to exchange for USD or your prospective currency.
For some, this is a way to increase the value of product sales simply through patience and strategy.
Accepting, trading, and exchanging crypto can be a time-consuming and difficult task for eCommerce merchants. For one, you need to have resources for blockchain verification, you want to avoid any fraudulent trading, and you want to be able to perform conversion easily and without paying high exchange fees.
A crypto payment gateway allows you to easily integrate your store or website with most eCommerce channels, such as Shopify, WooCommerce, Magento, and other common platforms.
Your crypto payment gateway will handle blockchain verification, and will ensure that you do not suffer from fraudulent trades. Your crypto wallet and conversion options will all exist in one place, and as an eCommerce merchant, you will not have to fret about purchases made while you are off the clock.
How do I Get Started with a Crypto Payment Gateway?
Now that you know all about the benefits of crypto payment gateways, all you have to do is find the best one for you! Most crypto payment gateways can be signed up for and utilized completely online, so find one that is well-reviewed, suits your needs, and integrates well with your eCommerce platform.