Should I convert my cash holdings to crypto?
Honestly, this question has been on my mind for the better part of the past year, especially since the crypto price surged following President Donald Trump’s re-election.
As of 2023, the crypto payments gateway size was valued at USD 1.2 billion and is currently growing at a CAGR of 15%.
The crypto market is one of the ‘hottest’ industries right now, and this has prompted many businesses, merchants, and e-commerce brands to start contemplating building a crypto payment gateway.
The rationale behind it is simple: ‘If so many people are looking to acquire cryptocurrencies, maybe we should enable them to make payments directly with it without converting to cash.’
So, things have been busy in recent times.
And in this article, we’re taking a comprehensive look at the crypto payment gateway market.
We want to know where crypto payment gateways are headed; A raw, honest look at trends, predictions, and what business executives need to know to take advantage of the new changes.
Current Trends and Key Drivers of the Current Crypto Payment Gateway Market Size: What’s Happening Now?
The concept of crypto payment gateways is fast attaining huge significance in global commerce. It’s already redefining how payments are made traditionally and is on the quest to redefine the ‘new normal.’
The following are some of the key factors responsible for these quick changes:
1. Growing adoption of cryptocurrencies, crypto payments, and multiple cryptocurrencies in the same payment gateway
Put simply, more people trust in crypto, hold monetary value in crypto, and are willing to make purchases using the same. Expectedly, merchants are responding in kind and making provisions to adequately and correctly receive these crypto payments, thus, ultimately leading to a rise in the adoption of cryptocurrencies.
As such, businesses and merchants are not just integrating crypto payment gateways into their payment processing systems, but also ensuring they can process payments in different types of cryptocurrencies. It used to be just major coins like Bitcoin and Ethereum in the early days. However, there is now a growing adoption of more cryptocurrencies in crypto payment gateways.
2. Increasing demand for QR code payments
In addition to supporting multiple cryptocurrencies, businesses are also integrating QR code technology in their payment portals to make crypto payments seamless for their customers. With the help of this technology, customers can complete payments by just scanning a code, thus effectively eliminating the need to enter long wallet addresses. As such, businesses can easily accept crypto payments securely with little or no hassle.
3. DeFi influence
Businesses are increasingly integrating DeFi protocols in their crypto payment gateways to offer additional decentralized financial services. This trend increases the number of financial options available to customers and coincides with the growing interest in Decentralized Finance (DeFi).
This integration offers customers financial services such as trading, lending, and earning interest on crypto holdings. Interesting times ahead.
4. Preference for mobile experiences
Many of the latest crypto payment gateways launched by various businesses focus on mobile compatibility. This development aligns with the rising awareness about user experiences when it comes to crypto payment gateways.
These gateways used to be all about functionality, which made them somewhat difficult and confusing for users to navigate. However, as crypto adoption continues to grow, developers and designers have a better handle on how to make things more intuitive. More specifically, they’re now making these crypto payment gateways easier to use on mobile devices.
5. AI and Machine Learning Influences
Is there really any industry that AI and machine learning aren’t currently impacting?
Certainly not the crypto payment gateway market!
Crypto payment gateways are becoming more sophisticated as AI and machine learning capabilities are integrated. These integrations aim to beef up security through data-driven fraud detection processes and improve user experiences through user behavioral pattern monitoring.
While so many things are currently happening in the crypto market and payment gateway market, these are some of the notable ones. This is because they signal some greater things to come into space. The next section talks about the different indications and predictions of these current trends in the near future.
Predictions and Growth Projections in the Crypto Payment Gateway Market: What Could Happen in the Future?
Based on the current happenings, recent technological advancements, and data indications, the following are some possible future forecasts of what to expect in the crypto payment gateway market in the coming years.
1. Adoption of stablecoins and central bank digital currencies (CBDCs)
The number of countries that are actively developing a CBDC surpassed 100 in 2024, according to Statista. Furthermore, Statista also reports that the U.S. Senate Banking Committee has recently approved the GENIUS Act to establish collateralization and anti-money laundering guidelines for stablecoin issuers in 2024.
These numbers and developments point to the realization that stablecoins and CBDCs are gaining widespread adoption. And with the crypto payment gateway market already adopting more cryptocurrencies, it makes sense to expect the adoption of stablecoins and CBDCs in the years to come.
2. Integration of tokenization
The shift towards the adoption of more digital assets in the crypto payment gateway market may yet tilt towards tokenized real-world assets like real estate and stocks. A simple illustration of this idea is that there will come a day when people can make purchases with digital stock or real estate tokens. If this development occurs, it will significantly redefine the nature of transactions as we know them.
3. Cross-platform compatibility
Mobile is currently the focus for most players in the crypto payment gateway market. However, seeing as the motivation behind this obsession with mobile compatibility, there is a good chance that the focus will shift to cross-platform compatibility once other users start clamoring for use on their preferred devices.
This shift will be triggered by businesses’ rising commitments to simplify crypto payment acceptance regardless of a user’s devices. So, we expect to see crypto payment gateways integrating seamlessly with websites, Point-of-Sale (POS) systems, and mobile apps.
4. Improving security by integrating smart contracts
The need to beef up security is obviously a no-brainer if businesses are tilting towards processing more payments through crypto payment gateways. In addition to more sophisticated AI and machine learning techniques, the incorporation of smart contracts in crypto payment gateways is one of the major approaches expected to be applied for this purpose.
By nature, smart contracts are self-executing contracts that have the terms of the agreement hard-coded into a program. Integrating them into crypto payment gateways can help improve security by automating payment processes and preventing unauthorized transactions.
5. Biometric authentication
From fingerprints to facial recognition, crypto payment gateways are showing strong indications that they’ll be relying on these biometric authentication techniques in the near future. These features can provide additional protection against malicious attacks and unauthorized attempts to access crypto funds.
While these predictions sound very exciting and signify the innovative solutions that could flood the crypto payment gateway market in the years to come, businesses and executives looking to jump in on the action need to be aware of some current and potential challenges that could hinder their progress.
The following section talks about them in detail.
Challenges Facing the Crypto Payment Gateway Market
The following are some of the major challenges facing the crypto payment gateway market:
1. Security concerns
You’ll notice most of the predictions discussed above were about the projected measures businesses in the crypto payment gateway market would take to mitigate security risks. This is because of the real and rising cybersecurity risks that both consumers and merchants are open to when processing crypto payments.
Businesses have to be alert to these threats and tackle them with the right expertise. For context, successful cryptocurrency payment gateway companies often prioritize robust security protocols like 6-digit password protection, token balance concealment, instant app locking, and secure recovery phrases to ensure assets are safeguarded.
These and more are the things you should be prepared for.
2. Regulatory uncertainties
Despite the growing awareness and adoption of cryptocurrencies across different regions, legacy finance systems still have a more solid standing, and cryptocurrencies are just struggling for wide acceptance. As such, their legal status is still under scrutiny in various regions.
Consequently, some of the support systems open to other payment gateways may not be open to crypto payment gateways. This will mean businesses in the crypto payment gateway market have to try harder to effect significant changes.
3. Market volatility
From rising crypto adoption to regulatory uncertainties, the different challenges facing the crypto market also exert a ripple effect on the value of cryptocurrencies. As such, cryptocurrencies often fluctuate in price.
These price fluctuations are one of the major reasons why some businesses remain reluctant to accept cryptocurrencies as payments. They affect the value of transactions and affect a business’s bottom line. That’s why you should make adequate provisions for the potential crypto price movements as you prepare to venture into the crypto payment gateway market.
Final Takeaway: How Businesses Can Benefit from the Crypto Payment Gateway Market
Honestly, it’s about to be Christmas in the crypto payment gateway market. Both businesses and customers are no longer alien to cryptocurrencies. In fact, awareness is reaching even the new coins. Likewise, governments around the world are developing more CBDCs, and AI techniques are disrupting the industry.
Yet, more is to come.
Stablecoins and CBDCs are expected to be normal options in crypto payment gateways. Real world tokenization is on the horizon. At the same time, smart contracts are expected to play a greater role in security considerations.
Nonetheless, certain challenges like regulatory uncertainties, market volatility, and security concerns are worthy obstacles to be wary of. Therefore, businesses should seek the help of crypto payment gateway development companies to navigate the murky waters of the crypto payment gateway market.
Interesting times ahead!
