Since Europe is the largest crypto economy in the world, it goes without saying that the number of consumers willing to pay for certain products and services in cryptocurrency is increasing. A payment option like this in Europe can help businesses improve customer conversion rates.

If you’re a forward-looking entrepreneur, then you definitely should give a chance to your customers to pay with cryptocurrencies, which will extend the functions of your payment processing ecosystem and make you strongly competitive. Although you can receive cryptocurrency payments with the help of your personal crypto wallet, there is also a more efficient method: a crypto payment gateway able to connect your online store with a payment processor.

Payment Gateway: The client-facing type of software, provided by the Payment Service Provider, is usually integrated with a virtual store or at the credit card terminal in a physical store. It enables the merchant to either approve or decline credit and debit cards and other types of payment in a very secure manner. The processing of a transaction cannot be considered without first passing through a payment gateway.

The page in an e-store where the customer is asked to select a form of payment-that is, credit or debit card, or an e-payment portal like PayPal-and then specify the details about the form of payment. Most of the modern electronic payment gateways enable customers to pay with different cryptocurrencies and, in turn, enable merchants to automatically allow cryptocurrency payments to be immediately converted to traditional money at the moment of the transaction process, thus allowing exclusion of the volatility inherent in cryptocurrencies.

This means that if you’re apprehensive about storing cryptocurrencies or just know nothing about this new means of paying for goods and services, a crypto payment gateway can temporarily take this seeming obstacle off your path by using its own crypto wallet to conclude every transaction between a customer and you and instantly converting cryptocurrencies into the fiat currency of your choice.

If you would instead keep the received cryptocurrencies in your crypto wallet and not immediately convert them into cash, then there are growing numbers of crypto payment gateway providers that facilitate direct settlements to merchants’ crypto wallets.

How It Works

How the Payment Process Usually Works:

A crypto payment option is chosen by the customer, and it allows the transfer of cryptocurrencies from the crypto wallet. They fill in their payment details on the online store’s payment gateways. The total amount of cryptocurrencies is arrived at by pricing them at their market value at the time of the transaction.

The payment gateway validates the customer’s data, as well as verifies the availability of the customer’s funds.

The payment gateway encrypts the customer’s data and sends it to the payment processor of a merchant acquiring bank.

The merchant acquiring bank sends the information to the customer’s crypto wallet service provider to approve the transaction.

The customer’s crypto wallet service provider either authorises or rejects the transaction and sends this data back to the merchant acquiring bank.

The merchant acquiring bank sends the payment authorisation data to the payment gateway.

If the payment is approved, cryptocurrencies are momentarily converted into the fiat currency of a merchant’s choice. If you’ve selected a payment gateway provider that allows sending payments directly and instantly to your own crypto wallet, the payment won’t be converted.

The payment is transferred to the merchant’s bank account or wallet.

In this context, the functions of a payment gateway include:

• Collecting customer’s payment details
• Payment data encryption
• Determining which card association has issued the bank card
• Sending the transaction data for payment validation
• Sending the transaction data to the payment switch
• Either declining or approving payment transaction
• Protection from fraud
• Securely saving payment data for future purchases

How to Decide What Works Best for You

Things to consider before selecting a crypto payment gateway provider include the following:

• Is the provider of the payment gateway fully licensed in your selected regions and countries?
• Does it adhere to data protection regulations, especially the GDPR?
• Does it provide the types of payment options preferred by your customers?
• Whether the provider is aware of/understands the area of your business
• Types of cryptocurrencies the provider accepts
• Risk management software, specifically that which can ward off fraudulent transactions and cyber attacks
• Compatibility with your online store
• Usability and speed of the software
• Setup fees and recurring pricing
• Whether the system is borderless or only available in certain regions
• Whether it is possible to localize the system in terms of currency and language
• Whether the provider offers smooth payment processing
• Whether the technology behind the payment gateway comes along with impeccable customer service and support, including its maintenance
• A type of payment gateway that would suit the infrastructure of your website

Types of payment gateways you can choose from:

• Self-hosted payment gateways – for example, Stripe – are fully integrated onto your website to facilitate onsite payment. In other words, a customer will be entering the details of his or her payment on your online store and then those details are sent to the URL of the payment gateway. Benefits will include full control over a customer’s payment experience and faster checkout process.
• The disadvantages include the absence of a technical support team, which means any technical hiccups and major failures will be your responsibility and may come pricey.
• Hosted payment gateways (e.g. PayPal) facilitate off-site payments as a customer is directed away from your website to enter their payment details on the payment gateway provider’s page for processing.
  • It includes advantages such as access to a technical support team, better transaction analytics, and no data security burden since sensitive payment details remain on the provider’s servers.
  • Unfortunately, such a gateway will not enable complete monitoring and controlling of one’s customer payment experience since it does not take place in your online store.
• API-hosted payment gateways (Binance Pay) enable a merchant to handle the collection of the payment data and the processing of the payment directly on the online store, thanks to an API – Application Programming Interface.
  • You can enjoy such benefits as full control of the website design and a fully customizable checkout experience, integrated with various devices.
  • One of the disadvantages consists in strict local regulations compliance to be done by your means since all the payment data are stored on your online store.

Crypto Payment Gateways Regulations in Europe

While choosing a crypto payment gateway provider, you only need to make sure it is fully compliant and trustworthy. For this purpose, identify what local and regional regulations are applicable, and what national authority is responsible for supervising the bank or the provider, including whether it is listed as a licensed business. Below follows a summary of applicable European legislation, but please note that because the legal position is complex, it is recommended that you consult personalized advice with our lawyers at Regulated United Europe.

When choosing the crypto payment gateways provider, you need to consider the following legislation:

• Past and present European and national crypto regulations, before adding up cryptocurrencies as a means of payment, to ensure that cryptocurrencies are allowed within those countries and areas.
• The Payment Services Directive (PSD), which works toward a more competitive and safer digital payments market.

There are three ways to get a payment gateway – through your merchant acquiring bank, through your merchant account service provider, or independently as long as your chosen software can be integrated into the workflow of the merchant acquiring bank.

The following crypto payment gateway providers are available in Europe and globally:

• Stripe
• Binance Pay
• Coinbase Commerce
• Coingate
• Paypal
• BitPay
• Square
• ALFAcoins
• Blockonomics
• NOWPayments

Requirements for Merchants

You have to be a fully registered business and prepare all corporate documents for eligibility for a merchant account and use such services as a crypto payment gateway.

For applying to a merchant’s account with crypto payment gateways, you have to provide the following information:

Documents needed to get a crypto payment gateway:

How to Obtain Crypto Payment Gateway in Europe

If you are planning on obtaining a crypto payment gateway, you most likely already have a merchant account and have a business relationship with a merchant account service provider who facilitates more common payment methods. You may want to request them to offer a crypto payment gateway. If this is not possible, then the solution must be sought from the hands of more developed providers.

To normally get a payment gateway, you’ll need to do the following:

• Define your business and the needs of your customers: name the cryptocurrencies, the budget you can dedicate, etc.
• Research among different service providers, compare, and choose a merchant account service provider offering crypto payment gateways.
• Find out in what regulatory environment your selected crypto payment gateway works and make sure it is a fully licensed service.
• Application submission – together with the required documents – to a selected Merchant Account Service provider, or directly to the Merchant Acquiring bank.

If you’re ready to expand your business in Europe by embracing state-of-the-art means of payment, our team at Regulated United Europe will be more than happy to help you in the best possible manner. We have eight years of experience in helping clients obtain a payment gateway for the European markets. With the broad network of key trusted partners in the financial service industry in Europe, we are focused on the development and implementation of best and cost-effective solutions aimed at enhancing the served customers’ operational performance.