Cryptocurrencies have come a long way in recent years. Initially thought of as a basic digital asset class, they have now evolved into a legal tender in some countries, disrupting traditional financial systems and institutions. However, their impact extends beyond monetary exchange, as they are now poised to transform online commerce.
Cryptocurrencies offer businesses and customers some big advantages when it comes to online transactions. They provide accessibility to a vast and diverse customer base, streamline transaction processes, and offer low transaction fees. According to a survey on Statista, crypto payments are projected to grow at a CAGR of roughly 17% between 2022 and 2029. This shows that crypto is the future of online payments and more people are willing to embrace it as an alternative to traditional currencies.
The Rise of Crypto Payment Gateways
The roots of the crypto payment gateways can be traced back to the emergence of Bitcoin in late 2008 or early 2009. As the consumer market grew, there was a strong demand for a quick, secure, and efficient way of online processing. As a result, payment gateway solutions were built on the blockchain to address this issue using similar methodologies as the traditional payment gateways.
Today’s payment gateways are built to provide a seamless, sophisticated financial solution that facilitates payment between merchants and customers through user-friendly interfaces and advanced security standards such as 2FA authentication (two-factor authentication), verification, and tokenization.
There is a steady rise in the usage of digital crypto payments including app-based wallets, QR codes, or even virtual PoS that allows users payment with a single tap or scan. With convenience being simplified, crypto adoption in both large and small businesses is inevitable.
According to Statistics, more than 50% of businesses are willing to accept crypto payments and a considerable number already included a crypto payment gateway on their shopping portal. For instance, popular Luxury fashion label, OffWhite, and popular car manufacturing brand, Tesla have begun to accept crypto for designer clothes and electric cars respectively.
Benefits of Cryptocurrency Payments
Merchants who accept payments in cryptocurrency or integrate crypto gateways into their online or physical stores are entitled to numerous benefits. These benefits include:
Versatile payment options
Merchants that accept cryptocurrency payments for their products or services enjoy a better experience. They can accept payments in bitcoin and a variety of other alternative currencies owing to their versatile payment options.
Faster transactions
When compared to the speed of traditional payment, cryptocurrency transactions are quicker. Every successful transaction is recorded on the blockchain and confirmed within minutes, reducing processing time and allowing for faster order fulfillment.
Cheaper transaction costs
Traditional financial institutions are known for their costly chargebacks and processing fees. This can be delimiting for small business owners looking to achieve more revenue as most of their profits go to these banks. With crypto payment gateways, they can save and earn more without being charged excessively for cross-border transactions.
Better security
When it comes to executing financial transactions, security is of paramount concern as merchants fear for the safety of their private information and payment details. Cryptocurrency has found a way to cover up security loopholes by employing different security measures, alongside the securing power of the blockchain, to protect merchants’ information crypto wallet. These security measures may include two-factor authentication (2FA), secure payment addresses, and strict monitoring of crypto transactions.
Better security
When it comes to executing financial transactions, security is of paramount concern as merchants and consumers fear for the safety of their private information and payment details. Cryptocurrency has found a way to cover up security loopholes by employing different security measures, alongside the securing power of the blockchain, to protect consumers’ information and the merchant’s crypto wallet. These security measures may include two-factor authentication (2FA), secure payment addresses, and strict monitoring of crypto transactions.
How does Cryptocurrency Payments Gateways Work?
To properly demonstrate this, we’ll use PTPShopy, a reputable crypto gateway platform primarily used for ecommerce. Other gateways use a similar sort of mechanism, which involves the following procedures:
- Customer A selects good(s) from a merchant’s website, e-commerce store, app, or in-store.
- After shopping (online), PTPShopy automatically creates an invoice for everything customer A purchases. This allows the customer to recheck and modify or proceed to the checkout section. If such a customer decides to stop in-store, she goes to the cashier who manually inputs these items to generate the total amount.
- At the checkout section (online), the customer is locked into a transaction window that converts the total to the cryptocurrency of their choice (customers get to see the equivalent fiat cost.)
- PTPShopy instantaneously converts your fiat into your chosen cryptocurrency and the funds are immediately deposited into the merchant’s account for withdrawal or other financial purposes.
- This process also works for in-store transactions, however instead of a checkout portal, customers pay via PTPShopy virtual POS or a scannable QR code.
PTPShopy also offers other tools such as PoS payments, cryptocurrency donation and crowdfunding tools, and a crypto wallet that makes business processes easier and faster. You can seamlessly make use of these tools to streamline business processes all in one account.
The Future of Cryptocurrency Payments
As we look ahead, the future of cryptocurrency payments seems bright. With their increasing popularity and acceptance, cryptocurrencies are poised to play an even larger role in how we buy and sell goods and services.
One exciting aspect of the future of cryptocurrency payments is the potential for greater integration into everyday transactions. As more businesses adopt cryptocurrencies as a form of payment, consumers will have even more options for using them to make purchases, whether online or in-store.
In conclusion, cryptocurrencies could very well be the driving force behind the next phase of online transactions. We are already experiencing it in real-time as large, medium, and small-scale businesses are integrating crypto gateways into their platforms to cater for their customers’ diverse needs.