As the adoption of cryptocurrencies gathers pace, the means by which businesses and their customers can buy and exchange Bitcoin and altcoins, and use them to make payments, is becoming increasingly important. Among the fastest-emerging of these services is Lithuania-based CoinGate.
Compliant with local and European Union regulations, CoinGate is a payment gateway for blockchain payments that enables businesses to accept cryptocurrency payments worldwide and free of risk. The company’s system aims to make Bitcoin and altcoin transactions a practical option for merchants, increasing adoption of cryptocurrencies globally by providing reliable, accessible and convenient payments infrastructure that caters for the needs of both businesses and their customers. Additionally, CoinGate also enables its users to buy cryptocurrencies for fiat.
Among the advantages that CoinGate offers merchants is a flexible software solution that enables payment using more than 50 cryptocurrencies in a single payment environment, with no added cost to the customer. Whether used by an ecommerce store or a physical shop on a city street, CoinGate’s API integration allows owners to accept payments without extensive technical knowledge and without exposure to volatile exchange rates. Merchants are charged a flat fee of 1% to use the service.
As is the case with many fintech companies, the creators of CoinGate had initially been running various internet businesses together, as well as establishing a premium taxi company in the Lithuanian capital, Vilnius. The founding team of CoinGate – Dmitrijus Borisenka, Jonas Gilys and Irmantas Baciulis – became involved with Bitcoin and blockchain technology about five years ago. “We started building CoinGate in 2014, just the three of us,” recalls CEO Dmitrijus Borisenka. “There were few resources at the time, so it was really a ‘come on, let’s make it happen’ product. Today, we have the knowledge, a rapidly expanding customer base and already what we believe is a reputable brand. For me and my partners, our biggest achievement is the trust we have gained so far within the crypto ecosystem.”
The increasing buzz around the topic of cryptocurrency has seen the platform gain a strong foothold in the market and the CoinGate team has now expanded to 14 people, having doubled in size over the past year. “The expansion of our team indicates we are moving in the right direction, and
I see a lot of room for CoinGate to grow further,” says Borisenka.
CoinGate currently has around 50,000 registered users and more than 2,000 active merchants. These include large businesses such as watchmakers Louis Chevrolet and Chronoswiss. “We recently partnered with Louis Chevrolet to promote their exclusive line of Bitcoin limited-edition watches, sold for Bitcoin only, from which 10% of sales proceeds were donated to an organisation fighting rare diseases called leukodystrophies,” says Chief Commercial Officer Vilius Semenas. “We are really excited that such highly regarded companies are demonstrating innovative attitudes towards new technologies such as blockchain. Adoption is key for Bitcoin and other cryptocurrencies to become not only a viable, but also a popular, payment method.”
In April 2018, CoinGate reached the milestone of 200,000 payments processed for merchants, and the rapid increase in the platform’s activity is evident in the statistic that half of these payments took place in 2018 alone. The company now ranks among the largest cryptocurrency processors globally by volume and is confident of reaching the top three.
“While the cryptocurrency market has taken a downturn in terms of prices, we have not observed any decline in payment activity. On the contrary, more and more merchants are interested in accepting this payment method – not only for Bitcoin, but increasingly for other cryptocurrencies too,” says Semenas. “We have been working on some huge developments these past few months and have launched native Litecoin payments, with Ethereum to come soon. At the same time,
we decided to expand our range of offerings for trade,
adding support for Litecoin and Ethereum, as well as Dash and Bitcoin Cash.”
So far, CoinGate reports that most of its exchange customers hail from Europe, with the biggest trading volumes coming from the UK, France, Latvia, Poland and its home country of Lithuania,. For purchases via credit or debit card, the US leads the way, while its merchants are spread around the world, including Europe, India, Russia and the United Arab Emirates.
Looking to the future, CoinGate is embracing the potential of Lightning Network (LN) payment processing to further develop its platform and adopt a Bitcoin scaling solution. The technology is still at its early stages and currently suited to advanced users with sufficient technical knowledge, so CoinGate is running pilot integrations with selected merchants.
“We strongly believe that LN is the next major upgrade to Bitcoin as a whole and, as a payment processor, we are excited about the potential impact it can have on Bitcoin as a currency,” explains Semenas. “We are very optimistic about a number of improvements that LN brings. The huge increase in network capacity will eventually bring down transaction costs and attract more people to use Bitcoin as a payment method. Plus the ability to make and receive payments near-instantly and securely, without waiting for network confirmations, will make payments online and in retail locations much more convenient, both for merchants and shoppers.”
CoinGate sees other benefits in LN, such as easing the load on an increasingly busy Bitcoin infrastructure. “We have been awaiting this upgrade since early 2017, not just because of the cost savings related to transaction fees, but also because we felt that reducing the strain our payment volumes place on the network was the right thing to do,” says Semenas.
“Currently, around five to six transactions in every Bitcoin block are coming to or from CoinGate – although this doesn’t seem like many, we already feel that it represents a significant part of the network. We enjoy being at the forefront of technology in the Bitcoin space and being drivers for adoption of new technologies in the payments sphere as a whole. Becoming the first gateway to integrate LN payments will allow us to showcase this.”