Why Altcoins and Digital Assets Make Payment Providers Rethink Checkout Solutions

Since Bitcoin’s launch in 2009, the adoption of cryptocurrency payments has accelerated dramatically, with major retailers like Shopify and Overstock.com now accepting digital assets. Yet many businesses remain hesitant—not because of technological limitations, but because of crypto’s notoriously volatile market conditions. However, payment providers have discovered a practical solution: specialized cryptocurrency payment gateways that convert digital assets into traditional fiat currency instantly, eliminating the volatility concern for merchants. These platforms now represent a billion-dollar industry and are reshaping how businesses handle transactions with altcoins and other digital currencies.

The Rise of Crypto Payment Solutions Beyond Bitcoin

The evolution of crypto payments extends far beyond Bitcoin alone. Today’s payment providers must accommodate not just Bitcoin and Ethereum, but an entire ecosystem of altcoins spanning thousands of different digital assets. Unlike traditional payment systems built on centralized networks, cryptocurrencies operate through decentralized peer-to-peer (P2P) blockchains, requiring entirely new payment infrastructure. This fundamental difference means standard credit card processors cannot simply add a “crypto button”—instead, specialized payment providers have emerged to bridge the gap between crypto assets and fiat currency.

The market for crypto payment solutions has grown explosively, with analysts predicting it will reach several billion dollars as institutional adoption increases. Payment providers now serve as the critical intermediary that allows businesses to welcome customers paying with altcoins without needing to understand blockchain technology themselves.

How Payment Providers Process Cryptocurrency Transactions

The mechanics of a crypto payment gateway are straightforward, though the backend technology is complex. Here’s how the flow typically works:

• A customer adds items to their cart and reaches checkout
• Instead of entering a credit card, they select a cryptocurrency payment option
• The payment provider displays a receiving wallet address with an accompanying QR code for easy scanning
• Once the customer sends the required altcoins to this address, the payment provider’s system automatically converts the digital assets into the merchant’s preferred fiat currency
• Within minutes, the business receives cash in their linked bank account—no crypto holdings, no volatility exposure

Several payment providers have integrated this functionality into existing financial ecosystems. PayPal, for example, allows users holding Bitcoin or other altcoins in their PayPal wallets to spend directly at participating merchants, with the business receiving fiat currency equivalents. Similarly, fintech platforms partnering with exchanges enable seamless conversion without requiring merchants to become cryptocurrency experts.

Business Advantages: Why Merchants Choose Crypto Payment Options

From a merchant’s perspective, crypto payment gateways offer compelling benefits that extend beyond just accepting new forms of payment. First, they eliminate volatility risk entirely—businesses never hold cryptocurrency, so they’re insulated from dramatic price swings. A customer might pay with altcoins worth $1,000 one day and $900 the next, but the merchant receives their specified fiat amount regardless.

Second, these solutions enable borderless commerce. Cryptocurrencies operate without geographic restrictions or central authority control. A customer in any country can immediately send payment for goods or services without traditional banking delays or cross-border fees. This opens entirely new customer demographics—particularly younger consumers (millennials and Gen Z) who increasingly view crypto as a legitimate payment method.

Third, businesses don’t need to become blockchain experts to accept altcoins. The payment provider handles all the technical complexity, from validating transactions to managing private keys. Merchants simply integrate the payment plugin into their existing point-of-sale (POS) system or e-commerce platform, then let the provider manage the conversion process.

Hidden Costs and Risks: What Payment Providers Need to Know

Despite their advantages, crypto payment solutions come with important trade-offs that smart businesses must evaluate carefully. First are the fees—payment providers charge processing and conversion fees on each transaction, typically ranging higher than standard credit card rates. Businesses must calculate whether the potential gains from accessing crypto-paying customers justify these added costs.

Second is the learning curve. While payment providers simplify the experience for end-users, employees and customers new to crypto often have questions. Companies must invest in staff training and customer education to ensure smooth adoption. Some merchants also worry about security—when outsourcing payment processing to a third party, even a reputable one, there’s inherent counterparty risk if that provider experiences a hack or security breach.

Third, most payment providers focus exclusively on converting crypto to fiat currency. If a business actually wants to hold altcoins or other digital assets as part of their treasury strategy, standard payment gateways won’t enable that. Those merchants need alternative solutions like self-custody wallets that let them receive and control cryptocurrency directly.

Top Crypto Payment Processors in the Market

Several established players dominate the crypto payment provider landscape:

BitPay remains one of the largest and oldest crypto payment processors, founded in 2011. The platform connects with hundreds of companies and nonprofits, handling transactions in Bitcoin, Ethereum, altcoins, and various stablecoins. BitPay extends beyond simple payments to offer payroll solutions, allowing businesses to compensate employees with cryptocurrency if desired.

Coinbase Commerce operates as a managed payment solution, giving businesses flexibility in how they handle crypto conversions. Merchants can opt for a self-managed account where they control their private keys and hold cryptocurrency directly, or they can choose Coinbase’s managed service where the payment provider handles all conversions and security. Either way, customers can pay using dozens of altcoins and tokens.

PayPal brought crypto payments to mainstream consumers through its Checkout with Crypto feature launched in 2021. PayPal users can spend Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and other supported altcoins at PayPal-integrated merchants, with businesses receiving fiat currency in their accounts—making it familiar to millions of users already comfortable with the platform.

dYdX and Banxa represent a newer breed of crypto payment partnerships. The decentralized derivatives platform dYdX partnered with the fiat-to-crypto payment provider Banxa to let traders easily convert traditional money into stablecoins like USDC using credit cards and bank transfers. This approach removes one of the biggest friction points for people new to trading—getting fiat currency converted into digital assets.

As cryptocurrencies continue maturing and merchant adoption accelerates, payment providers will face increasing pressure to expand their offerings beyond simple altcoin conversion. The future likely holds more sophisticated solutions that let businesses manage both fiat and crypto seamlessly, giving merchants the flexibility to choose whether they want exposure to digital assets or pure fiat conversion.