The biggest criticism for cryptocurrencies, which is not being able to use as a medium of exchange is now being increasingly put into test. As large crypto exchanges world-wide make their way towards payment sector, ability of crypto to be used as a mode of exchange improves drastically.
Cryptocurrency exchange company Bitfinex is launching Bitfinex Pay, a cryptocurrency payment gateway. With this new product, online merchants can accept payments in various cryptocurrencies. This will even make cross-border transactions much more easier.
Even though there are several cryptocurrency payment gateways such as Coinbase Commerce, Electroneum, Circle Pay, and Bitpay, it is believed that Bitfinex Pay will have the competitive edge of working seamlessly with the company’s exchange.
What is a crypto payment gateway?
Crypto payment gateways allow businesses to accept transactions of cryptocurrencies as payment from customers in exchange for goods or services the business provides. These systems accept payments from any country and put an emphasis on security due to the nature of blockchain-based cryptocurrencies.
When the customer makes a purchase using a cryptocurrency as payment, the transaction often goes through the payment gateway at a fixed exchange rate and automatically converts to traditionally recognized fiat currency so the merchant can avoid the volatility of the crypto markets.
Yet, certain payment gateways do not automatically transfer the cryptocurrency to fiat currency, allowing the merchant to hold the digital coins as long as they prefer.
Bitfinex Pay explained
With the launch of Bitfinex Pay on 3rd of March, Bitfinex stated in their website that, “Bitfinex Pay (is) a payment technology that allows online merchants a means of receiving contactless and borderless digital token payments.”
The company further explained that it had developed a widget for this new service, claiming that it can be “integrated onto a website facilitating online payments.” The widget will allow payments to be made in Bitcoin (BTC) (via the Lightning Network also), Ethereum (ETH), and Tether tokens (USDT) via Ethereum or Tron.
Bitfinex’s widget works somewhat similar to ‘Buy Now with PayPal’ button. When the customer click on the Bitfinex Pay button, he/she will be redirected to the Bitfinex payment gateway. Once the payment is approved, the customer will be redirected back to the original merchant website.
In order to get started with Bitfinex Pay, eligible merchants will initaly need to register for a Bitfinex account, verify the account to a minimum of intermediate level and apply for merchant verification. Upon successful verification, a merchant sub-account can be created. Merchants can then integrate the Bitfinex Pay widget on to their websites.
There won’t be any fee charged with Bitfinex Pay transactions, yet there are network fees involved with sending crypto tokens. Merchants will also end up paying fees if they want to convert their cryptocurrency holdings on the exchange and transfer fiat money out of their account.
Impact on Crypto Market
It is difficult to relate any market improvements explicitly occurred due to Bitfinex Pay, yet in the ling-run this will facilitate to drive the crypto market in a bullish trend. When more and more crypto payment gateways are added, it will in turn provide more value for the overall crypto market.
Crypto sphere is being modernized day by day and at the same time the efficiency of the crypto market improves with the initiation of new payment systems such as Bitfinex Pay. The market will of course react positively for this and await for more advanced initiatives in future.
Paolo Ardoino, CTO at Bitfinex said, “as a native of the cryptocurrency space, we’re aiming to take on established behemoths in the technology and payments fields, leveraging our knowledge of the tech to bring crypto payments into the mainstream.”