The parallel development of payment processors for digital currencies is taking place along with the implementation of
Advantages and disadvantages of crypto payment gateways
Among the advantages of crypto payment, gateways include instant transaction settlements at the cost of a small network fee (to be borne by the service provider) and a service charge (to be paid by the customers). Moreover, only one intermediary, i.e., the crypto payment processor, is involved in the process, improving the overall customer experience.
In addition, merchants are protected against chargeback fraud thanks to transparent blockchain networks. However, in the case of fiat payment gateways, there might be some instances when businesses do not get their money after it leaves the buyer’s card. Moreover, crypto payment gateways support multiple cryptocurrencies and reduce volatility risk for the merchants.
Nonetheless, crypto payment gateways are the intermediaries between merchants and customers; therefore, the settlement does not take place in a fully decentralized manner. Also, if the service provider’s business is uninterrupted, merchants may be affected, such as delayed payments, until issues with crypto payment processors are fixed. Or if a crypto payment gateway gets hacked, merchants also lose their funds.
Another drawback is that using a crypto payment gateway is more expensive than making payments directly on the blockchain because they operate as middlemen and tack on their own costs to the transaction fees incurred on a blockchain network.
Also, since crypto payment gateways are centralized organizations, there must be some level of trust, which requires merchants to confirm that the payment processor can deliver high-quality, reliable and sufficiently secure service to fend off potential cyberattacks.
Does Binance and Coinbase have a payment gateway?
Both Binance and Coinbase (centralized crypto exchanges) offer crypto payment gateways. Additionally, merchants can build their own checkout page with complete design control using application programming interfaces (APIs) provided by both exchanges. A software intermediary called an API enables communication between two applications.
Related: Binance vs. Coinbase: How do they compare?
Binance offers the Binance Pay payment option method to crypto-friendly companies. By displaying the store’s unique QR code, merchants can set up Binance Pay in their physical location for a contactless, secure cryptocurrency payment experience. They can also integrate Binance Pay into their online store for a borderless transaction process, giving consumers more payment options.
Binance Pay Merchant Program members can just need to set up a Merchant account to accept crypto payments. Alternatively, businesses can receive cryptocurrencies via Binance Pay with the help of channel partners.
Coinbase’s crypto payment gateway is called Coinbase Commerce, supports ten digital currencies, namely Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), USD Coin (USD), Dogecoin (DOGE), Tether (USDT), Litecoin (Lite), Shiba Inu (SHIB), ApeCoin (APE) and Dai (DAI).
Payments are automatically converted to USD by Coinbase Commerce, and Coinbase does not have any access to the funds received by merchants, meaning that if a 12-word seed phrase is lost, Coinbase cannot recover funds. In addition, before delivering funds to merchant accounts, Coinbase charges a 1% transaction fee for receiving crypto payments.
Are crypto payment gateways safe?
Before selecting any cryptocurrency payment gateway, merchants should conduct due diligence on how service providers store cryptocurrencies and subsequent fiat payments. Other factors they can consider include transaction fees, cryptocurrencies supported and a history of hacks and scams suffered by the platform.
In addition, checking if a crypto payment gateway provides customer support is vital to get a timely resolution in case of disruption. Furthermore, verifying each candidate’s reputation is another crucial step one can take while looking for crypto payment processors. To achieve this, go to specialized review websites and read what other people say about their interactions with various service providers and choose wisely.
