Consumers expect to pay seamlessly across any experience—from social media platforms to small business e-commerce checkouts. They also want choices, including buy now, pay later services, real-time payments, and digital assets.
Supporting these options requires payment gateways capable of bridging the gaps between payments processors and merchants. But a crypto gateway can do far more than simply add a “Pay with Crypto” button at checkout.
As Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research, detailed in the Crypto Gateways: Digital Money Routersreport, crypto gateways are complex solutions that take many forms. More importantly, all of these models function as powerful payments orchestration platforms, optimizing payment routing and settlement while ensuring compliance.
Eliminating the Infrastructure Expert
The expanding role of crypto gateways is driven in part by the sheer number of digital assets technologies—including cryptocurrencies, wallets, integrations, and infrastructure layers. These platforms also address a key barrier to mainstream adoption: the volatility of cryptocurrencies like bitcoin and Ethereum.
For example, bitcoin reached an all-time high of $126,000 in October, only to fall to around $67,000 less than six months later.
“There have been developments going down the route of direct crypto acceptance versus indirect,” Hugentobler said. “There are third parties involved with the indirect side because at the end of the day, all the indirect crypto gateway method is that you can pay with crypto at checkout. But whoever’s accepting that payment on the other end doesn’t want crypto, so they have that third party swap it out.”
Despite short-term swings, many cryptocurrencies remain highly lucrative investments. Companies like Strategy have even made bitcoin investment central to their business models. Organizations with a similar focus might consider a direct crypto gateway, allowing them to accept crypto and actively manage it.
For most business owners, however, the complexities of treasury management and digital assets make an indirect gateway more appealing, where a partner handles crypto conversions. It is possible, though, to achieve a hybrid approach that combines the benefits of both models.
“With a hybrid method, it solves the issue of why merchants haven’t adopted crypto,” Hugentobler said. “Merchants can use a stablecoin or accept a stablecoin if they want, but if they don’t want it as-is, they can use this product and leverage this instant finality, this instant settlement, the cheaper method of sending fees without even really knowing they’re using stablecoins.”
“That’s where we’re headed and that’s been the issue with crypto payments for the longest time,” he said. “If you have to become an infrastructure expert, this stuff isn’t going to scale.”
The Demand for Digital Assets
Interest in crypto acceptance among merchants is growing, driven in part by consumer demand for payments flexibility. A recent survey by PayPal and the National Cryptocurrency Association found that inquiries about crypto payments are common—especially from millennial and Gen Z customers.
Merchants also cite lower transaction fees compared with credit cards as a major advantage. Speed and security are additional benefits, with crypto payments typically settle in near real-time on transparent blockchain networks.
These benefits extend to cross-border payments, which historically have been costly and slow. Cryptocurrencies, and particularly stablecoins, dramatically reduce fees, delays, and foreign exchange challenges.
A hybrid crypto gateway that leverages stablecoins is an attractive option for most merchants. However, there are still some wrinkles to be ironed out.
“There are issues like chargebacks, where I think everyone has been so used to the traditional chargeback method. It has to be a whole new leg with crypto, that’s just the way it is,” Hugentobler said. “However, stablecoins are a little bit different than bitcoin or Ethereum Blockchain where it’s immutable; there’s just some discretion that issuers have.”
The fact that stablecoins are privately issued by companies like Tether and Circle has been a point of concern because these issuers must maintain sufficient fiat reserves to redeem the tokens, even during high-volume periods. To date, these concerns have largely proven unfounded.
“What it comes down to is—is this simple and easy to use?” Hugentobler said. “Does it do what it says it does—settle instantly, reduce my cost, and reduce my overhead? Is the consumer happy? Is the end user happy? Can I have fiat in my bank account or wallet? That’s what they want. I think when you start adding layers though is where you get additional risk.”
Addressing the Uncertainty
Despite the risks, digital assets offer clear benefits to both merchants and consumers. Financial institutions and payments processors should consider crypto gateways as a practical entry point into crypto transactions.
While regulatory uncertainty has made some U.S. organizations hesitant to adopt digital assets, these concerns are no longer a significant barrier.
“Financial institutions need to figure out what they want to do to participate, and they need to commit,” Hugentobler said. “From there, you can build roadmaps of who do I need to get involved—third parties, compliance, exchanges, whatever it is—that’s the biggest thing.”
“But it’s also realizing that with the GENIUS Act and the CLARITY Act coming down the pipe, there is a push to leverage private digital money to exert dollar dominance,” he said. “From a bigger picture standpoint, this type of stuff is just going to continue to proliferate and those that wait on the sidelines for any more regulation to hit the market are just going to lose market share.”
