Crypto payment processors: Launch, run, evolve.

As the crypto industry scales northwards despite stiff opposition from several quarters, here’s an instance of how the payment side tries resolving the scalability issues of transactions on a network by integrating the Bitcoin Lightning network.

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A rapidly-growing crypto payment gateway launches a support framework for its fourth major blockchain network, namely the Bitcoin Lightning Network. The company now enables seamless payments to and from all Lightning Network-enabled wallets in addition to several other blockchain network wallets and assets. This was sent across in the format of a press release.

The document also says that clients and partners may now transact in the sums of the order of tens of thousands from all Lightning Network-enabled wallets.

This upscaling of the payment gateway has huge prospects. Nation-states like El Salvador and Brazil have enormously pro-Bitcoin. Bitcoin is also the most widely used digital asset with brands like Twitter, Whole Foods, and PayPal.    

Also Read: PaybitoPro’s White Label Payment Gateway Backed by DeFi Ensures Seamless Crypto Payments

The Working of a Crypto Payment Processor

A cryptocurrency payment processor is a payment gateway for virtual currencies. This is much similar to the traditional payment processors, and gateways, and requires bank credit card use just as in the case of sovereign currency transfer. Cryptocurrency payment gateways allow individuals to accept digital payments and receive fiat currency immediately in exchange.

Digital currency payment gateways are, however, not required. It’s totally acceptable to use an individual’s personal wallet to accept cryptocurrency payments. The crypto payments gateways, however, take the extra work of exchanging cryptocurrency and managing a wallet out of your hands.

Payment gateways are organizations removing the perceived risk of cryptocurrency payments through the use of their wallet(s) to enable transactions between merchants and their customers.      

Payment Flow

Enumerating the steps, in the workflow of a cryptocurrency payment gateway:

1. The customer chooses to make payment in cryptocurrency at checkout  (in-store, on the web, or in-app).
2. They pay the merchant an amount equal to the digital currency’s fair at the time of the transaction.
3. The cryptocurrency payment service instantly exchanges the payment into the desired currency.
4. The transaction amount is then added to your account with the provider. It is deposited to the merchant’s designated bank account in intervals pre-decided on in your service contract.

Fees

The service provider leverages a cryptocurrency wallet to enable the transfers. If some specific currency is allows within a payment system, the provider will charge fees through the currency network’s transaction validators.

Transaction validators authenticate blocks and transactions in the blockchain. In exchange for their energy use and computational power, they pay in small fractions in the cryptocurrency transaction they validate.

The providers charge these fees from the users, along with their service fees allowing them to continue operating and offering their services.

Enter the Lightning Network

The Lightning Network is a Layer 2 blockchain protocol in addition to Bitcoin’s (BTC) blockchain allowing off-chain transactions,  (transactions between parties not on the blockchain network). Many payment channels running between parties or Bitcoin users comprise the second layer. 

A Lightning Network channel is a two-party transaction procedure where parties can send or receive payments from each other. Layer two improves the scalability of blockchain applications by handling transactions outside the blockchain mainnet (layer one). This while still reaping benefits from the mainnet’s robust decentralized security paradigm. 

Billbitcoins

Billbitcoins is yet another name in the crypto payments market that offers merchants, funds, and enterprises the payment alternative for their crypto customers, investments, and partners. Simultaneously, it reduces payment processing costs and eliminates frictions such as chargebacks and crypto price volatility.

Finally

With the implementation of the Bitcoin Lightning Network, remittances payments in crypto are sure to pick up the pace in terms of transaction speed and the number of transactions per second (TPS). Experts predict that a full operation can get faster than the conventional electronic fund transfer and payment system. Experts predict to champion the digital payments landscape owing to its inclusivity alongside security, and speed.