How a Crypto Payment System is More Advantageous Than a Traditional Payment Gateway
Crypto payments are advantageous in many ways over the traditional mode of payment dealing with fiat currencies, as we will examine in this article.
A payment gateway typically serves as an intermediary between the customer and the merchant, which securely transfers money from the account of the customer to the payment portal of the merchant. For exclusive usage between the seller and the buyer, a payment gateway encrypts (encodes for private usage) data between the user's browser and the retailer's server. Crypto payment gateways do the very same thing with cryptocurrencies. However, crypto payments are advantageous in many ways over the traditional mode of payment dealing with fiat currencies, as we will examine in this article.
What is a Crypto Payment Gateway?
Crypto payment gateways such as SecurePay, Payscript, Square, etc., with a premium single point reference for merchants and consumers, claim to be the most practical blockchain wallet for their transactions. They use the power of crypto-currencies to allow super-fast transactions with low processing and transaction costs. Operating on blockchain-based, decentralised networks, they include encryption layers that ensure data protection, full transparency of the entire transaction background, as well as data immutability, making it almost unfeasible for hackers or online scam artists to modify payments.
The clients check a QR code on a crypto payment network to make a payment or directly transfer the crypto payments to the wallet address. However, the blockchain network tracks all transactions.
The advantages of using a crypto payment gateway
A cryptocurrency payment gateway offers a number of benefits as mentioned below:
Low transaction cost:
Credit card payment companies usually impose an average 2 – 4% fee for each transaction. As of 2017, retailers have spent Visa and Mastercard $90 billion in credit card swipe fees alone. Crypto payment acceptance means lower payments compared to conventional payment systems as the third-parties are completely eliminated and transaction fees don’t apply.
A lot of customers take advantage of the refund policy of businesses and use products/services for free and then force the business to give money back. Business owners lose a lot of money in this process. As crypto payment gateways offer no reverse payments, this can be prevented and high-risk business owners are going to benefit immensely.
In fiat currency transactions, the banks collect data on everything - the sellers’ and buyers’ names, addresses, phone number, financial information, credit score, and even where each of them are spending their money. In a cryptocurrency payment method, only your transaction ID and wallet address gets out, at max, the shipping address. All your other private data remain private.
Cryptocurrencies use blockchain as the background technology where not only the data inserted is permanent, but there cannot be any identity theft or counterfeit attempt either without notifying the entire currency ecosystem. The layers of security provided by blockchain also keeps the data protected from hacking attacks.
Easy international use:
By their very nature, cryptocurrencies are not subject to exchange rates, interest rates, transaction fees, or other levies applied by a particular government. You don’t have to wait for a transaction to be completed, don’t have to convert the money if you and your seller/contact are using the same crypto platform, and there is no limitation on who can or cannot send/receive money from a different country; making crypto payments truly borderless.
Independence of usage:
Cryptocurrencies are based on blockchain in Australia which is decentralised, meaning neither a government nor any other central authority controls any part of it. You, the merchant or the buyer are in full command over your wallet, when and how to send/receive your money. They can never even take away your money for whatever reasons (like it happened for Cyprus).
It takes less than ten seconds for the entire process of crypto payment processing. Moreover, if you want, you can even covert the cryptos to your choice of fiat currency whenever you want, making the use of them extremely convenient.
Cryptocurrency payment services don’t limit anyone from using them - they practically can be open to anyone with a workable internet connection, some knowledge of the available cryptocurrency networks, and ready access to their respective websites and portals. In the current system, approximately 2.2 billion people around the world have access to the internet and smartphones, yet they do not have access to conventional banking or exchange networks. Once the governments of countries across the world make it legal, anyone willing can be a part of a cryptocurrency payment network.
Competitive advantage in several countries:
There are countries in the world who are weaker than the average in terms of fiat currencies. Since crypto treats everyone equally, these countries often prefer them as transaction mode, among some others who aren’t even at disadvantage in terms of traditional currency. In fact, a survey says a whopping 80% of Australians choose crypto for daily purchases over fiat. This gives companies allowing crypto payments a competitive advantage in these countries.
In the last 12 years since Bitcoin was born, it is clear that the cryptocurrency industry has made major advances. The financial sector is being changed by Fintech as more people are getting aboard. We can safely presume that the simple and seamless transaction route provided by crypto payments will soon lead to a crypto coin-fueled global and borderless economy.