What is a bitcoin payment gateway?
Using proper caution, one can make or receive payments to anyone without revealing any sensitive information linked to their bitcoin accounts or wallets. This article explains how bitcoin payment services work, their advantages, their associated costs that users should be aware of, and whether these services are a threat to the traditional fiat currency based payment systems.
In a nutshell, bitcoin payment services, or bitcoin merchant services, enable merchants and businesses to receive payments in bitcoins from individuals for the goods and services being sold or delivered. It works similar to the processing of a standard credit or debit card payment service , with some specifics to bitcoins.
Similarly, you can make an online purchase at the Walmart website, and make the payment using the same credit card by entering the details on the payment page of the website. In both the cases the in-store swipe machine, or the online web portal , behind the scenes works a payment service system that enables authentication and processing of your credit card for making the payment.
Bitcoin payment services work in similar fashion. They act as an intermediary layer between the payer and receiver for processing of the bitcoin payments, which also involves recording the transaction on the blockchain public ledger. They allow merchants to accept payments in bitcoins both online and at physical locations without the buyer or the seller worrying about the complex background process of bitcoin payments that gets executed in the background.
All popular bitcoin payment services offer multiple mediums for merchants to accept bitcoin payments. They include solutions for various platforms, like integration with e-commerce platforms like Shopify, PrestaShop, and Magento; for payment through in-store point-of-sale POS systems, like Soft Touch and DC POS; and for direct payments from within the popular billing and accounting solutions, like Host Bill and Invoice Ninja.
Essentially, anyone who signs up for bitcoin merchant services can start receiving bitcoin payments from the customers via any and all kinds of transaction mediums from across the globe. Your customer opts to make payment in bitcoins at the checkout in-store, on web, or in-app , he pays the amount at the locked-in exchange rate applicable at the time of transaction, the bitcoin payment service instantly converts the received bitcoins into the currency of your choice eliminating the volatility risk, the money gets added to your account, and it finally gets credited to your designated bank account at the decided frequency once the accumulated account crosses the threshold limit.
One can even opt to get the bitcoins in their own wallet, instead of exchanging them for fiat currencies. The service also sends the necessary details in a secure manner to the blockchain network for the transaction to be authenticated and recorded on the public ledger. Miners, who verify and add the transactions to the blockchain, receive a bitcoin miner fee. This fee does not go to the payment service, but is given to reward the miners for their work done for verification and authentication.
Bitcoin payment services claim to maintain transparency in the highly dynamic exchange rates between the bitcoin and the fiat currency. Using such services, a merchant not only gets various mediums to accept global payments, he also gets a reliable and authentic identity in the virtual world of cryptocurrencies, which is much safer, transparent and dependable for getting payments.
That is the value-add a business gets from such services. BitPay is one of the early and popular offerings available in the U. Coinbase, a cryptocurrency exchange, also offers a merchant app for businesses for bitcoin payment services. CoinGate, SpectroCoin, and CoinsBank are other leading players offering similar services in a variety of flavors to suit the needs of merchants and payers willing to deal in bitcoins. Settlement is available in a variety of fiat currencies by the different operators.
It supports direct bank deposits in 38 different countries, and bitcoin settlements in countries across the globe. While many nations, like Japan and the U. However, the overall increasing acceptance of bitcoins is indicative of more and more global users willing to transact in them. The existence and continuously increasing influence of a parallel, border-less economy which is out of control of any central authority is also putting the business of the traditional card and merchant payment service providers at risk.
From a time where everything was being dealt in fiat currencies to now, where an increasing portion is switching to cryptocurrency dealings, the associated services linked to fiat currencies are bound to feel the heat. Technological advances and evolution of new offerings will continue to emerge. Investing in cryptocurrencies and Initial Coin Offerings "ICOs" is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs.
Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns no cryptocurrencies. Your Money. Personal Finance. Your Practice. Popular Courses. Login Newsletters.
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Bitcoin Definition Bitcoin is a digital or virtual currency created in that uses peer-to-peer technology to facilitate instant payments. It follows the ideas set out in a whitepaper by the mysterious Satoshi Nakamoto, whose true identity has yet to be verified. PayPal PayPal is an electronic commerce company that facilitates payments between parties through online funds transfers.
Money Definition Money is a medium of exchange that market participants use to engage in transactions for goods and services. Coinbase Commerce Coinbase Commerce allows merchants to accept multiple cryptocurrencies payments from global customers.
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What is a bitcoin payment gateway?
Accepting payment in Bitcoin has a wide range of benefits for both online retailers paument good old fashioned bricks and mortar businesses. Of course the 'decentralized' nature of Bitcoin means that anyone can start accepting payments using this innovative new system, without needing to have an account with a third party provider. But for many businesses it is simply easier, cheaper, and more secure to pay a small fee to a professional payment processor. One of the most popular services provided by these payment processors is the instant conversion of Bitcoin BTC to your local fiat currency like USD for example. This is important for many businesses because most businesses which accept Bitcoin payments still have to pay all of their own costs and buy stock using fiat money, so changes in the exchange rate between Bitcoin and the businesses local currency could lead to losses if the BTC accepted as payment is not instantly converted into fiat. Payment processors also provide you with all of the tools and reports that you need to make accepting Bitcoin payments as simple and convenient as possible without processsor having to develop your own software solution. In this article I will provide an introduction to 10 of the best and most popular Bitcoin payment processors.
How To Accept Bitcoin as a Merchant - feat. Bitpay & Matador Pizza
An Introduction to Bitcoin Payment Processors
The below question is asked a lot:. Your Money. Users will begin receiving deprecation warnings in Bitcoin Core version 0. Modernize your brick-and-mortar store by letting your customers pay with crypto. The whole process has been streamlined to make it as straightforward as possible for less tech-minded merchants. Its WordPress plugin is highly regarded, something which helped it be be rated as one of the best payment gateway plugins dhat that platform. Coinbase can be used as a payment gateway as well as a normal procesdor. With such a large number of users, Coinbase has the resources to develop some amazing features to help make life easier for its users. These make fpr what does a payment processor do for bitcoin for your business to start accepting Bitcoin. This function will undoubtedly be welcomed by small business owners who have to check transactions manually. There is a common concern of creating too many addresses. All articles 10 Best Bitcoin Payment Gateways for To request payment using the payment protocoldl use an extended but backwards-compatible bitcoin: URI. This is because it offers a very simple and straightforward API for them to use.