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    Binamite Content Wizards

    January 12, 2023

    Why The Crypto Payment Gateway Market is Rapidly Growing?

    why crypto payment gateways are rapidly growing

    In 1949, Frank McNamara, founder of Diners Club International, was faced with the embarrassing situation of not being able to pay for dinner with his wife. He had forgotten his wallet at home, and though his wife picked up the tab for both dinner and the taxi home, what ensued can only be described as the epicenter of a revolution that would sweep the payments industry off its feet.

    McNamara soon introduced the Diners Club charge card, making Diners Club International the world’s first independent payment card company. Frank may not have understood how influential the charge card would become, but its legacy will forever live on through the credit cards we know and love today.

    Payments are fundamental actions that form the core of not just businesses, but entire economies. If it’s easier to make payments, the ‘velocity’ of money increases, stimulating demand and supply activities. In fact, payments are so important to monetary economics that economists regard monetary velocity to have a direct and proportional bearing on a country’s GDP.

    Delivering such critical value, the payments industry has evolved significantly over the last few decades, especially with the advent of the Internet. People have always been, and always will, search for better and easier ways to make payments. From bartering with precious metals to international payments over thin air, money transfers have never been more convenient, and payment gateways are a crucial component of our modern financial ecosystem.

    What is a Crypto Payment Gateway? How does it work?

    A crypto payment gateway is a type of online payment system that allows merchants to accept cryptocurrency payments from customers. It acts as a bridge between the merchant’s website and the cryptocurrency network, allowing the merchant to receive payment in cryptocurrency while still being able to receive payment in their preferred currency.

    To use a crypto payment gateway, the merchant will typically integrate it into their website through an API (Application Programming Interface) or a plug-in. When a customer makes a purchase on the merchant’s website, they will select the option to pay with cryptocurrency. The payment gateway will then generate a unique cryptocurrency address for the customer to send the payment to. The customer can then use their cryptocurrency wallet to send the payment to this address.

    Once the payment is received by the payment gateway, it will be converted into the merchant’s preferred currency and transferred to the merchant’s bank account. The payment gateway will typically charge a small fee for this service, which is usually a percentage of the total transaction amount.

    Overall, crypto payment gateways provide an easy and secure way for merchants to accept cryptocurrency payments from customers, while still being able to receive payment in their preferred currency. This allows merchants to tap into the growing market of cryptocurrency users and potentially expand their customer base.

    Trends So Far

    If you’ve paid for anything on the Internet, chances are you’ve used a payment gateway. Facilitating fund transfers between payers and payees, payment gateways are cogs in the digital wheel that transfer money from the point of sale (POS) to the updating of bank records. 

    The global digital payments volume in 2021 was $7.34 trillion, estimated to reach a whopping $13.9 trillion and clock a CAGR of 13.1% between 2022 – 2026! The payment gateway industry will likely follow suit, with even higher rates and more room for growth.

    However, this journey has been incremental and progressive. Innovations in unique payment methods have been slow, but steady, bringing groundbreaking improvements to the industries they power. E-commerce, utility bills, and digital investments occupy the largest chunk of the digital payments pie, but use cases are rapidly evolving with online gaming and neobanks achieving stupendous growth rates.

    With greater utility, mobile and internet penetration, and platform interoperability, payment gateways are going shoulder-to-shoulder with some of the most cutting-edge technologies in the world. However, there are inherent drawbacks in our legacy systems that restrict their optimal use.

    Navigating through regulations to deliver a bare minimum solution today entails a lot of bureaucratic hurdles, involving middlemen that extract rents, companies that prey on customers with high fees, unilateral powers censoring transactions, and malicious actors hurting customers by exploiting cyber security vulnerabilities. Even more crippling is how this all occurs behind an opaque wall, hindering the ability to improve, and absolving industry players of accountability.

    Why Crypto Payment is Rapidly Growing

    National political boundaries have been blurred for economic transactions today. The seamless flow of goods, services, data, and labor across borders demands a seamless cross-border monetary infrastructure. Cryptocurrencies are built to disregard the frictions that arise when money crosses borders. It also addresses P2P payments that are currently prone to censorship, long settlement times, high transaction costs and the growing trust deficit in traditional financial structures.

    It’s no surprise that 36% of workers are asking for payment in crypto, either in-part or in-full, with Forbes terming crypto salaries as a ‘sweetener’ to attract talent. Another telling dataset from Statista observes that while traditional digital payment technologies have penetrated commerce to the tune of 51% in 2021, it remains a statistically insignificant >0.1% for remittances, signaling the inability of fiat digital structures to service this market.

    While there is massive potential for crypto to disrupt the world of digital payments, it would be delusional to assume that crypto, in its raw form, is adequate in serving these use cases. Despite how advanced cryptocurrencies are, when it comes to crypto payments, we surprisingly find ourselves back to the ancient conundrum of “Double Coincidence of Wants,” i.e. the payer and payee must transact in crypto, and the same cryptocurrency out of the 13,500 that exist today

    Additionally, users must have an appetite for token price volatility, and a working understanding of how to create wallets, use blockchain networks, and off-ramp their assets. These are the tradeoffs that one has to live with for a cheaper, trustless, and immutable settlement experience. Atleast, they used to be.

    Voila – Binamite!

    With the popularity of cryptocurrencies rising against the backdrop of a remote work culture trend, demand for better crypto payment solutions has never been greater. However, paying or receiving a crypto salary is far from a straightforward process.

    It’s unreasonable to expect employees to accept payment entirely in crypto, especially with inflation touching multi-decade highs. At the same time, with how volatile digital asset prices can be, employees want flexibility in how much of their salary is credited on the blockchain.

    Additionally, businesses have different payment preferences. Some have huge crypto reserves from early investments, while others don’t want to touch the stuff, and dealing with these issues manually is time consuming, expensive, and can create complications while filing taxes.

    Binamite was designed from the ground up to address these very issues bringing the benefits of crypto payments to freelancers, employees, and the businesses they work for.

    Binamite offers an end-to-end solution for crypto compensation. Employers can choose to send salaries through their preferred payment method, including cryptocurrency, credit cards, and bank transfers. The Binamite interface is your playground; whether you’re looking to make Bitcoin payments,  or send funds via the USDT payment method, Binamite gives you all the tools you need to manage your payments. From contract and invoice management to payout ratios and flexible withdrawals, Binamite makes managing crypto business payments a breeze. 

    As an employee, you get to choose how much of your salary you receive in crypto and/or fiat. It’s also possible to make or accept cryptocurrency payments as a small business. The procedure is similar; you create and send cryptocurrency invoices to the person paying, and your money gets where it needs to go. 

    Besides managing the conversion of local currencies and digital assets, Binamite also offers regulatory and tax guidance to ensure businesses and their employees remain compliant with local and international laws. By making digital asset payments more accessible to people and the organizations employing them, Binamite is putting the blockchain back in business.