Crypto Payments 101

As cryptocurrency adoption continues to increase on a global scale, growing by 33% since 2023, the use cases for payment gateways have never been more pertinent. In recognition of the legitimacy of cryptocurrencies, forward-thinking businesses, such as BMW and Microsoft, have updated their payment structures to align with these prevailing opportunities.

Understanding crypto payment gateways

Crypto payment gateways are payment processors that enable payments to be made using crypto assets. This revolutionary technology allows merchants of all shapes and sizes to gain access to a growing market of crypto-users, while mitigating volatility risks commonly associated with cryptocurrency transactions. Payment processor providers, such as FiveWest, offer flexible settlement options - enabling merchants to tailor their flows by date, asset, or currency. These gateways act as intermediaries, facilitating real-time conversions between fiat currencies and digital assets, at the time of transaction.

To understand crypto payment gateways, there are four key components to be aware of:

1. Integration

Cryptocurrency payment gateways, like FiveWest Pay, are designed with simplistic integration properties, usually in the form of web plugins which require minimal coding. The software is user-friendly, and can be integrated as part of existing payment ecosystems. For in-store payments, company-specific collateral, such as QR codes, offer a secure means for hassle-free transactions.

2. Customer payment experience

When customers opt to pay with crypto at checkout, a charge will be generated and they will use their mobile device to scan a QR code. The invoicing information is populated automatically, at which point customers are prompted to choose the wallet, and asset, they wish to pay with.

3.Payment processing

Once a customer has paid, and the transaction is reflected on the blockchain, the status of the transaction will be updated on the management dashboard. Network traffic and asset selection may affect the speed at which each transaction is processed. Once the transaction is processed, a notification will be sent to the mobile device of the merchant.

4.Settlement

Once the digital assets have been received by the merchant, they will be able to request settlement from their payment service provider. At FiveWest, we offer instant settlement to your business account in the currency, or asset, of choice.

The risks of crypto payment gateways

Crypto payment gateways offer a more secure means of accepting crypto payments, however, these processors are not risk-free. Price volatility is a major concern for merchants considering integrating crypto payments for their business. With FiveWest Pay, these risks are mitigated as proprietary software hedges the value of the crypto for 15 minutes - ensuring merchants are settled in the full amount of their invoices. A second risk pertains to security. The threat of cyber attacks and fraud are mitigated by utilising the infrastructure of licensed payment providers - such as FiveWest - whose airtight security is built on a foundation of concrete compliance.

Cryptocurrencies are not a trend, they are becoming an increasingly mainstream means of exchanging value and making payments. For forward-thinking businesses, integrating cryptocurrency payments offers instant access to a growing global user-base, as well as new revenue streams. Before integrating, it is paramount that merchants develop a basic understanding of the blockchain in order to select a payment gateway that will serve them, and their customers, best.