The Future of Payments Gateways: Embracing Stablecoins and Disrupting Middlemen

Payments gateways have long served as the backbone of digital transactions, connecting merchants, customers, and financial institutions. Yet, the traditional model often involves multiple intermediaries, including independent sales organizations (ISOs), which add layers of complexity, cost, and delay. As stablecoins gain traction, they offer a new path for payments gateways one that could reduce reliance on these middlemen and accelerate adoption of digital currencies in everyday commerce.

A digital payment terminal displaying cryptocurrency icons, highlighting the shift towards stablecoin payments

How Traditional Payments Gateways Work and Their Limitations

Payments gateways act as the bridge between a customer’s payment method and the merchant’s bank account. In the legacy system, this process often involves several parties:

• The merchant’s bank

• The customer’s bank

• Card networks (Visa, Mastercard)

• Independent sales organizations (ISOs) or payment processors

  
  

ISOs play a key role in onboarding merchants and managing relationships with acquiring banks. However, they also introduce extra fees and delays. Merchants frequently face high transaction costs and slow settlement times. This setup can limit innovation and transparency, making it harder for smaller businesses to compete.

For example, a small online retailer might pay 2-3% per transaction in fees, plus monthly charges from ISOs. These costs eat into profit margins and discourage adoption of new payment methods.

Why Stablecoins Offer a Better Alternative

Stablecoins are cryptocurrencies pegged to stable assets like the US dollar. They combine the benefits of digital currencies speed, security and programmability with the price stability needed for everyday transactions.

Using stablecoins in payments gateways can:

• Reduce transaction fees by cutting out intermediaries

• Speed up settlement times from days to minutes or seconds

• Increase transparency through blockchain records

• Enable global payments without currency conversion hassles