Digital payment platforms have been excellent alternatives to traditional banks for several years. These establishments help people send and receive money without the hassles of conventional finance. What if I told you these service providers could improve by simply integrating a blockchain payment gateway into their infrastructure?
Is it possible to integrate blockchain into digital payments beyond cryptocurrencies? How will decentralized technology merge with centralized systems? What are the risks, challenges, and obstacles? This article will answer these questions and more.
First, we need to examine what a blockchain payment gateway is to understand the possibilities of merging it with digital transaction systems.
A blockchain payment gateway is any digital platform that enables people and enterprises to send and receive money through distributed ledger technology. Contrary to popular belief, blockchain extends beyond cryptocurrencies.
Blockchain is a unique data architecture that spreads data storage and authority across multiple “mini servers” instead of a central point. Critically examining this point will outline how blockchain can support digital payments.
Financial transactions are data, just like any other information. However, they are sensitive, and breaches can result in significant loss. Nevertheless, decentralized technology is a very secure form of storing data. If service providers can find ways to store monetary data on decentralized servers, they can create a payment gateway built on blockchain.
There are several ways to integrate blockchain as a payment gateway into any platform, each with its respective advantages and requirements.
Some of these methods include the following:
While the current market demands efficiency, it is uncertain whether service platforms will widely adopt blockchain payment gateways. Currently, hosted website integrations seem to be the most common option.
The seller redirects the user to an external cryptocurrency payment solution or provides a secure crypto wallet public address. Following this interaction, the buyer pays through one of these methods. While this option is effective, it is inefficient, and there are more seamless alternatives.
APIs, plugins, and SDKs would be more suitable for blockchain payments. SDKs, in particular, allow the service provider to create their own payment solution.
