Cryptocurrency infrastructure continues to mature, reducing costs and improving settlement times for businesses and their customers alike. Nearly 1 in 4 CFOs say they will adopt crypto within the next two years.
But if you want to enjoy the benefits, you have to be able to integrate crypto payments successfully into your existing workflows, and understand the risks and compliance requirements - especially when it comes to crypto payment gateways.
These gateways split into a small number of structurally different models, and once you know which model you're looking at, most of the feature list follows automatically. Key to this: you have to know whether a gateway is custodial or non-custodial, hosted or self-hosted, and whether the merchant ever touches the volatile asset or it converts before it lands.
What a gateway actually does
A crypto payment gateway sits between a customer paying in crypto and a merchant getting paid. The customer scans a QR code or clicks a checkout link, sends crypto, and the merchant's balance updates, either in that crypto, in a converted stablecoin, or in fiat, depending on the model.
The models that actually differ
- Custodial vs. non-custodial. A custodial gateway holds the funds on the merchant's behalf until they're withdrawn or converted. A non-custodial gateway sends funds directly to a wallet the merchant controls, with no intermediary holding balance. BTCPay Server's own documentation describes it as a non-custodial invoicing system, one that eliminates the involvement of a third party in managing funds entirely: payments go directly to the merchant's wallet, and private keys never touch the server.
- Hosted vs. self-hosted. A hosted gateway is a service the merchant plugs into, no infrastructure to run. A self-hosted gateway is software the merchant installs and operates. BTCPay Server is free, open-source, and self-hosted by design; most other named providers, including BitPay and CoinGate, are hosted services.
- Stablecoin-first vs. Bitcoin-native. Some gateways were built around Bitcoin and added stablecoin support later. Others assume stablecoin settlement as the default, precisely because a stablecoin doesn't move 4% while a customer scans a QR code, so the gateway doesn't have to absorb the volatility a Bitcoin-denominated invoice would carry during its payment window.
Named examples of each model
BitPay runs a hosted, custodial model built around fixed-window invoices, with a documented 15-minute rate lock, and settles converted funds to a merchant bank account the next business day.
BTCPay Server is self-hosted and non-custodial, with no platform fee, aimed at merchants with the technical capacity to run their own infrastructure.
CoinGate operates as a hosted gateway licensed under MiCA, the EU's crypto-asset regulatory framework, granting it passporting rights across all EU member states rather than separate licenses per country.
Xchange360's own gateway sits in the hosted, custodial category: a checkout locks a rate for a short window, the customer pays within it, and the payment converts before the merchant's balance updates, at which point the merchant chooses whether to hold, convert further, or withdraw - an implementation of the hosted-custodial model.
Why most merchants are moving toward stablecoin settlement
A Bitcoin-denominated invoice carries real price risk during its payment window, however short, because of its inherent volatility. A stablecoin invoice largely doesn't. That single difference is why stablecoin settlement has become the default assumption for most gateways built in the last few years, rather than an add-on to a Bitcoin-first product. It removes the reason a rate-lock window needs to exist in the first place, since there's much less to lock.
What to look for
- Custodial or non-custodial: do you want a third party holding funds until conversion, or direct control of a wallet with no intermediary balance?
- Hosted or self-hosted: do you have the technical capacity to run your own infrastructure, or do you want a plug-in service?
- Stablecoin-first or Bitcoin-native: does the gateway assume stablecoin settlement by default, or is it bolted onto a Bitcoin-first product?
- Rate-lock window: how long does a quoted price hold, and what happens if a payment misses the window?
- Regulatory status: is the provider licensed in the jurisdictions you actually operate in, not just the jurisdiction they're headquartered in?
- Settlement destination: does converted value land as fiat in a bank account, as a stablecoin balance, or does the merchant have to withdraw manually?
Crypto payments, just like fiat currency payments, come with benefits and risks. Once you understand what those risks are, you can adjust your cash flow and payment strategy accordingly and reap the benefits.
Related reading: The Real Cost of Crypto Payments: On-Ramp, Off-Ramp and the Hidden Spread · How to Accept Crypto Payments Without Holding Crypto (Instant Fiat Settlement) · How Pay-by-Crypto Works for B2B: Settlement, Chargebacks and Reconciliation