This market is naturally a magnet for investors because user acceptance and transaction volumes continue to increase globally. However, developing a crypto-payment gateway can be difficult due to regulations and licensing problems. They are also susceptible to security breaches, market volatility, fraud, and users' perceptions of them as skeptical.
However, the trend is shifting gradually towards more positive predictions of crypto's future, and a crypto bank could be the next profitable business idea.
Also Read : Cost to Develop a Crypto Payment Gateway like BitPay in 2024
Crypto Payment Gateway Solution: An Overview
Businesses that accept cryptocurrency require translators to convert the digital currency into cash. This allows them to easily transfer regular cash, such as dollars or euros, while also allowing customers to pay with bitcoins and Ethereum.
Imagine this: When a consumer purchases something with Bitcoins, a crypto-banking payment solution comes into the equation and ensures that companies receive payment in fiat currency. This is a double benefit, allowing consumers to make payments as they wish and also allowing businesses to receive the money they want.
There are two kinds of payments: non-custodial and custodial. Custodial solutions store the funds for businesses until they decide to transfer them into the digital account of their choice. The non-custodial solution transfers the money to the business's wallet when it receives cryptocurrency from the client.
How Does a Crypto Payment Gateway Work?
As previously mentioned, the cryptocurrency payment gateway serves as an intermediary for payments between two parties to ensure the security and efficiency of transactions. It facilitates transactions between traditional financial systems and blockchain decentralized.
When a customer begins the payment process, the payment gateway secures the full transaction details and makes the transaction available to the blockchain.
The gateway checks the authenticity of the transaction and ensures that the customers have enough money in their accounts. After the transaction is verified by the payment gateway, the merchant will receive a confirmation via the merchant's payment processor. The merchant can choose to receive money in cryptocurrency or convert it to traditional or local currency by using the integrated exchange.
In addition to transactions, a cryptocurrency payment gateway is important in decreasing the chance of fraud while ensuring regulatory compliance. The payment gateway can support a variety of currencies and, therefore, meets the requirements of a huge population of users while boosting the use of digital payments.
Also Read : What is the Top Crypto Payment Gateway in US 2024
Things to Consider for Crypto-Banking Payment Gateway Development
To succeed in crypto payment gateway development, you must consider a few important aspects. Let's discuss.
Start by Gaining Clarity
Before you begin the development process, it's crucial to know the goals. It doesn't matter if you prefer an approach that involves you personally managing customers' funds or a hands-off model where the funds aren't kept in your account. The decision needs to be taken prior to entering the development process. Each method has its own unique set of challenges and associated costs. It's important to look at both the resources and budget prior to making a choice.
Review your Regulatory Requirements
The regulations for cryptocurrency can differ between countries, which adds another layer of complexity to the process of development. This is where research enters the equation. It is essential to study compliance and regulations, like the anti-money laundering laws, as well as additional legal requirements.
Lookout for Banking Partnerships
Contrary to popular opinion, cryptocurrency is safe and secure. It also makes the process more efficient. Banks are mindful of their reputation and may be concerned about potential negative associations with cryptocurrency-related activities, such as links to illicit activities or market volatility. Partnering with a bank requires the time, resources, and networks to locate banks willing to cooperate with cryptocurrency-related companies.
Stand Out
It's a noisy market that has uninterested audiences. With a lack of awareness and many new options coming onto the market, it's become crucial to distinguish your cryptocurrency payment processor from the rest. This means specific features or exclusive agreements with banks or other financial institutions should exist. A competitor analysis can help you determine what works and what's not.
Choose Features Carefully
When developing a crypto payment gateway, it is essential to select features that are geared toward customers' needs. Considerations like the number of digital currencies supported and payment methods, crypto exchange control, and automated payment are among the most popular features. By providing these services, you can give the greatest value to your customers.
Keep Transaction Process Smooth
Volatility is a characteristic of cryptocurrencies, making it somewhat uncertain for companies who accept crypto payments. Making real-time conversions between cryptocurrency and fiat currency can aid in reducing risk and ensuring that businesses get the full worth of their transaction. Furthermore, automating the payment process can reduce the time spent processing and increase the efficiency of transactions.
Focusing on these basic yet crucial aspects in developing a crypto platform will allow businesses to satisfy merchants' and customers' requirements.
Process to Develop a Crypto Payment Gateway
The entire procedure of constructing an online payment system that uses cryptography involves many steps. Each step has a specific reason and requires a meticulous plan to ensure it is done correctly. Let's take a look at the various steps involved in the creation of crypto payment gateways:
Planning and Research
Before you begin developing the payment gateway, it is essential to conduct thorough planning and study. Our cryptocurrency payment gateway development firm will conduct an in-depth analysis, looking into factors such as understanding your customers, staying on top of the latest market trends, and evaluating the need for crypto payment solutions.
They also understand the potential scope of your payment processor transaction costs and supported currencies, geographic coverage, etc.
Blockchain Technology Selection
Selecting the right blockchain technology to develop payment gateways is vital to ensuring successful development. The right blockchain technology can be selected to be in perfect alignment with your business's needs, offer support for the cryptocurrency you want, and meet your scalability requirements.
You can choose the best option from Bitcoin, Ethereum, and various other blockchain platforms, each with robust smart contract capabilities. Make sure the chosen technology is extremely scalable, secure, and firmly established.
Security Infrastructure
Security must be considered when designing a crypto payment gateway to ensure the security of sensitive financial transactions. Therefore, you must adopt the latest security methods to ensure greater security of your cryptocurrency payment gateways.
Some of the most popular security options include two-factor authentication encryption. You must develop a security framework that is compliant with the newest industry standards and regulations.
API Integration
Application Programming Interfaces (APIs) are essential because they allow cryptocurrency payment gateways to easily communicate with other platforms. This means you can develop robust APIs that ensure secure transactions.
They should be able to support a wide range of features, including checking the status of transactions, processing orders, payment initiation, and more. Integrating your payment gateway into well-known wallets and exchanges can make its functionality more adaptable.
User Interface Design and Merchant Onboarding
Realizing that user experience is crucial to the success of any payment processor is essential. You can design a user interface that allows merchants and customers to navigate through the payment system seamlessly while also providing the user with a smooth experience.
Adhere to responsive design guidelines, which can help ensure compatibility across various devices. Ensure that your payment gateway has an easy onboarding process for swift acceptance.
Testing, Launch, and Maintenance
Thorough testing is essential to identify any issues prior to launching the payment processor. Various types of testing, including unit testing, integration testing, and security testing, are recommended to ensure the payment processor you choose to use is secure.
After you have completed the testing, you will be able to launch your payment gateway initially with a smaller number of users. Once you have received feedback from your users, you can go ahead with the full-fledged launch. Regular maintenance is essential to ensure the correct functioning of the cryptography payment gateway and protect it from security risks.
Also Read : White-Label Crypto Payment Gateways Explained in 2024
Key Features of a Crypto Bank
Like every other project in the field of digital banking, a multi-currency crypto payment gateway must offer its customers a minimum number of features. This makes it a secure and reliable alternative to banking that customers are likely to choose due to its value to their everyday requirements. This list includes:
User Authorization
Users can create new accounts and log into them to carry out their banking transactions.
User-Friendly Profile Layout
The user profile must be well-organized, and all records, data, and assets must be readily accessible.
KYC/AML
It is essential to create a crypto-based bank that is completely compliant with KYC/AML regulations. Banks that are not compliant risk huge fines and are banned from operating in multiple countries.
Admin Dashboard
You must have access to the most important metrics and user activity data through a functioning dashboard.
Multi-Currency Support
Users should be able to trade crypto assets and keep their money in various currencies.
Multi-Factor Authentication
Two-step verification of biometrics, passwords that require two steps, and other security innovations can help safeguard your accounts' users from theft and unauthorized access.
Cryptocurrency Transactions
Your users must be able to perform all sorts of transactions with their crypto assets, such as receiving, storing, and sending cryptocurrency, from the convenience of their mobile applications.
Access to Trading Platforms
Your bank should be connected to secure and reliable exchange platforms through an API to allow your customers access to exchanges for cryptocurrency on reasonable conditions.
Virtual Cards
Digital cards are a common feature that many digital banks provide to increase customer loyalty and enable customers to pay using crypto to purchase goods and services.
In addition to these functions that make up the foundation of crypto banking services, innovative businesses may add a range of trendy, innovative functions within their software for crypto banking. These could be considered benefits to increase user happiness and to make the bank more appealing to customers in a highly competitive market. Think about adding the following information to your bank USP:
Crypto Donates
It is possible to permit users to contribute to their favorite crypto projects or to collect donations directly from their followers through their accounts with banks.
Crypto Invoicing
Anyone who works with businesses that support crypto can benefit from automated invoice generation and processing capabilities.
Referral Programs
Referrals let existing customers make money by inviting others through their social networks as well as nearby your bank.
Crypto Staking
The digital asset bank's core is the possibility of earning a passive income from the storage of funds.
Investment Portfolio
Crypto investments are an excellent way to increase the capital's value and earn passive income.
Also Read : Ethereum Has 4x More Crypto Developers Than Any Other Crypto Ecosystem
Benefits of Creating a Crypto Payment Gateway
Here are some the benefits crypto-banking payment gateway solutions offers:
No Chargebacks
The consensus protocol on the blockchain is a way to verify and validate each transaction and every payment. The transactions made here are irrevocable. Therefore, there is no chance of chargebacks or payment reversals like conventional payment techniques. This particular feature provides an advantage for entrepreneurs who operate high-risk companies.
Anonymity
In contrast to centralized systems that use centralized methods, this payment method, with its decentralization capabilities, aids in ensuring that registrations are anonymous. It is not necessary to submit KYC requirements to begin using this payment method. Users can sign up to the platform and remain private without divulging their identity. This feature is popular with those concerned about disclosing their personal information.
Faster Transactions
Eliminating authorities such as banks and other intermediaries will help make the transaction quicker. When using the crypto payment gateway, it takes only 10 seconds to finish the payment. The gateway's ability to accept cryptocurrency and fiat at any time (24/7, even during holidays) is a benefit.
Security
Thanks to modern blockchain technology, each transaction is recorded in an irrevocable, distributed ledger. Blockchain technologies are well-known for their sophisticated security features. Many payment gateways for crypto use security measures like two-factor authentication, encryption, and other measures to prevent security breaches.
Global Access
Traditional methods are restricted to a certain extent and limited to only local or specific currencies and customers. However, this payment gateway can quickly open your way into the world market. Thus, users and merchants can make cryptocurrency payments quickly using DeFi.
Compatibility
Crypto payment gateways are typically compatible with a variety of payment systems and easily integrated into any E-commerce platform. This feature lets businesses take on and serve customers worldwide without intermediaries. Crypto payment gateways integrated with various platforms offering global access can be accepted.
In addition to the advantages and benefits, it's essential to understand the dangers. Creating a crypto payment gateway is not without certain challenges, but developers always face these obstacles.
Future of Crypto Payment Gateway Development
The future of crypto payment gateway development is promising as they transform financial transactions. With the advancement of blockchain technology, cryptocurrency payment gateways will enhance speed, security, and accessibility. Through the use of Decentralized Finance (DeFi), users will be able to move transactions without intermediaries.
The cost to develop a crypto payment gateway with advanced features, is around between $35,000 and $55,000. Beyond that, it is important to remember that the price for cryptocurrency payment gateway development will depend on many aspects, such as the complexity of the features, team costs, and more.
Integration of payment gateways with smart contracts and stablecoins can improve stability and decrease volatility worries. Better collaboration between blockchain initiatives and banks is likely to lead to massive acceptance of crypto payment gateways. The future of crypto payments could change how transactions are conducted.
Conclusion
Creating cryptocurrency payment gateways provides companies with opportunities to improve safety, worldwide transactions, and cost savings, as demonstrated by platforms such as BitPay and CoinGate. This process involves an intelligent plan of action, the selection of blockchain-secure measures, and a user-friendly design.
As a renowned crypto payment gateway software and eWallet development company, JPLoft offers customized solutions for businesses operating in this rapidly expanding market. Our expertise lets businesses build custom gateways, which will ensure the most unique and seamless user experience.
