The present commercial world is becoming quickly saturated by cryptocurrency’s ever-growing popularity and ownership. Whether it be Bitcoin, Ethereum, Litecoin, or any other 1,000+ cryptocurrencies now in circulation, cryptocurrency and NFT trading are becoming common in commerce. Moreover, with an estimated over 100 million people worldwide owning some form of cryptocurrency, the eCommerce markets are in a more profound need of offering crypto as a valid avenue of purchase.
This is where a crypto payment gateway comes in. With several 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 with 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—more drastically or at a higher frequency than some stocks.
Taking 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 worth a specific value. For example, if you are selling a pair of shoes, they may sell for $50. However, $50 worth of Bitcoin on one day can be very different the next day. Thus, trading cryptocurrency for your product can be a risky game as a business.
This is where crypto payment gateways come in. A crypto payment gateway assumes the risk with their 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
The most significant reasons to work with a crypto payment gateway are removing volatility risk and allowing 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 your business receives the predetermined value regardless of fluctuation.
The value scenario 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.
Crypto payment gateways provide other opportunities for 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, certain trade 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 time-consuming and difficult for eCommerce merchants. For one, you need to have resources for blockchain verification, you want to avoid any fraudulent trading, and you want to perform conversion efficiently and without paying high exchange fees.
A crypto payment gateway lets you integrate your store or website easily with most eCommerce channels, such as Shopify, WooCommerce, Magento, and other common platforms.
Your crypto payment gateway will handle blockchain verification and ensure that you do not suffer from fraudulent trades. In addition, 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 entirely online, so find a well-reviewed one that suits your needs and integrates well with your eCommerce platform.