The sphere of payment processing has undergone significant transformation over the years. While bank-issued credit and debit cards have long dominated the market, the rise of digital wallets and blockchain technology has revolutionised global financial transactions.
Initially used only by crypto enthusiasts and tech-forward companies, cryptocurrency payment services are now being adopted by a broader range of non-blockchain organisations and traditional financial institutions. This shift is driven by the need to expand their customer base and meet evolving user demands.
Today, businesses have a wide array of options for conducting cryptocurrency transactions, with many service providers offering these solutions at reduced costs. One such option is the open-source payment gateway, a viable choice for brokers and enterprises. But what exactly are these gateways? Let’s delve into the details.
A Guide to Open-Source Crypto Payment Gateways
To begin, let’s clarify what payment gateways are. These tools enable electronic payments, whether through credit cards or cryptocurrencies like Bitcoin. They are the interfaces users interact with on the checkout page when making purchases.
A payment gateway acts as the bridge between the customer and the merchant account. In the context of crypto payments, API connections initiate behind-the-scenes processes that connect the payment system issuer, the business’s website, and the merchant account, where the funds are ultimately deposited.
Crypto payment gateways enable transactions using Bitcoin, Ethereum, Tether, and thousands of other blockchain-based coins and tokens. These gateways are typically provided by third-party operators who charge fees for their services.
On the other hand, open-source gateways are free tools that facilitate cryptocurrency transactions on your website. By integrating a crypto payment gateway from a GitHub repository, businesses can allow customers to pay using BTC, ETH, or any other supported currency.
Unlike white-label crypto payment gateways, which are developed by professionals and offered at specific price points depending on the service package, open-source crypto payment gateways are cost-free. Companies can customise these tools to meet their specific needs and cater to their customers’ preferences.
Advantages of Open-Source Payment Gateways
Using open-source processors comes with both benefits and drawbacks. For brokerage startups, these tools offer a way to accept cryptocurrency payments without incurring significant service fees. Let’s explore the key advantages of these free gateways.
Cost-Effectiveness
A major advantage of open-source payment gateways is their cost efficiency. Unlike white-label payment gateway providers that charge for services and maintenance, open-source gateways are freely available and typically developed by community contributors who make them accessible to the public.
The only costs involved are those related to hiring a development team to handle the integration and manage the technical aspects.
Faster Market Entry
Implementing an open-source payment solution offers a swift way to launch your services and start receiving payments. These gateways significantly reduce the time required to develop a transaction system from scratch using in-house teams.
Even with top-tier developers, substantial time and resources are needed to design, code, test, and deploy a custom solution. Open-source crypto gateways, therefore, present a more efficient option for businesses looking to enter the market quickly.
Drawbacks of Open-Source Payment Gateways
While the absence of fees for open-source solutions can be appealing, it also raises concerns about their reliability and trustworthiness. Here are some potential drawbacks of these open-source options.
Additional Costs
Many free tools do not offer complete functionality unless you pay extra fees. Open-source payment processors may provide basic features, allowing you to handle some transactions with a limited selection of currencies.
However, to access a full suite of services and cater to a broader customer base with multiple payment methods, you might need to invest in third-party services to unlock additional capabilities.
Technical Challenges
Often, companies turn to open-source gateways because they lack the technical expertise to develop a solution in-house and want to minimise costs.
However, using these tools without sufficient technical knowledge can result in incorrect implementations or malfunctioning features. To avoid compromising your user experience or security, these gateways require skilled developers to ensure proper integration and operation.
Conclusion
Open-source payment gateways provide cost-effective solutions by offering free tools developed and shared publicly on online platforms. Businesses can integrate these gateways without incurring fees, making them an attractive option for facilitating cryptocurrency payments.
However, the technical complexity of these solutions can pose a significant challenge for brokerage startups without in-house developers. Therefore, it’s crucial to carefully consider the advantages and disadvantages before deciding to implement these tools.