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You are at:Home » Understanding Crypto Acquiring: A Deep Dive into the Process
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Understanding Crypto Acquiring: A Deep Dive into the Process

Explore the intricate processes of cryptocurrency acquiring, from deposit to withdrawal, and uncover the differences between traditional transactions and crypto flows.
Arun ShakyawarBy Arun ShakyawarMay 12, 2024Updated:May 13, 2025No Comments8 Mins Read
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Understanding Crypto Acquiring A Deep Dive into the Process
Understanding Crypto Acquiring A Deep Dive into the Process
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In analyzing the most important aspects of crypto acquiring, we turn to the extensive professional background of Mikhail Malyi, a seasoned Team Lead at YouHodler with over a decade of hands-on finance experience, ranging from traditional banking institutions to pioneering crypto startups.

According to Mikhail, bridging this gap demands both strategic foresight and a willingness to embrace new paradigms. Our expert thinks that realizing the more subtle aspects of cryptocurrency purchase can be the most important driver of new payment infrastructures within industries.

Unlike traditional transactions, where a user and their bank confirm a transaction, the crypto world introduces a fascinating paradigm shift, involving parties that would never be part of a deal in a conventional finance world. In this article, Mikhail helps us lay out the discreet world of deposits, holds, and withdrawals, unraveling the distinctive features that set traditional and crypto acquiring apart.

The Bigger Picture

Mikhail has given us a bird’s eye view of the general business logic of the crypto acquiring process to see how it differs from what we usually see and do with fiat money:

Stage 1. Deposit

Users receive unique payment details usually containing wallet information, memo ID (if supported by the blockchain), and payment amount. There’s usually a payment deadline as the seller (not the acquiring platform!) takes on some exchange rate risks, freezing the rate until the deadline.

As users transfer funds, Mikhail explains, the acquiring platform awaits a certain number of confirmations or ‘block height’. Here lies one of the major differences between conventional and crypto flows. Traditionally, a transaction is confirmed by the user and their bank. But in the crypto world, when a user initiates a transaction, it is broadcasted to the network and included in a pool of unconfirmed transactions. Miners or validators on the network then compete to solve a complex mathematical problem through a process known as mining.

Once a miner successfully solves the problem, they create a new block of transactions and broadcast it back to the network. When the majority of nodes in the network reach a consensus that the new block is valid, the transaction within it is considered confirmed. The number of confirmations indicates how many blocks have been added to the blockchain after the block containing the transaction.

An example Mikhail cites is, if a transaction has six confirmations, it means that six subsequent blocks have been added to the blockchain since the block containing the transaction. Generally, a higher number of confirmations increases the security and irreversibility of the transaction. As a sufficient number of confirmations have been granted, funds are credited to the seller’s wallet and payment notifications are sent, essentially updating the coin count in the database.

Stage 2. Holding

Mikhail calls this phase a “waiting area” for coins until a withdrawal request from the seller is received. It’s crucial to note that what the seller sees on their acquiring platform account may well differ from the actual blockchain process. Meanwhile, as the acquiring platform profits from its operations, it sends this profit to its cold wallets.

Stage 3. Withdrawal

Sellers initiate withdrawal requests or these requests are generated automatically based on a pre-defined schedule or triggered by specific events, like accumulating a certain sum on the platform. Funds are then deducted from the seller’s account, and the transaction is sent to the blockchain mempool. Our expert believes careful monitoring at this juncture is vital to ensure secure and timely processing.

Zooming in on the Networks

Now, with Mikhail’s help, let’s delve into the specifics across different blockchains, BTC, ETH, and XRP, chosen for their leadership in their respective network types.

Account-Based Networks (One Key = One Wallet)

There are two implementation options:

1. Ethereum-Like Native: for example, ERC-20 for ETH or BEP-20 for BNB

Ethereum-Like Native

Each payment generates an address in the blockchain. Naturally, all private keys are stored by the acquiring platform. The acquiring platform tracks incoming payments, waits until the necessary block height is reached, and then sends payment notifications and credits the seller’s account. Periodically, depending on the acquiring platform’s business processes, funds are transferred to a bucket.

It’s advisable to initiate fund transfers during periods of minimal fees or send transactions to a mempool with a minimal commission. The platform typically has no urgency, so it can afford choosing the right time and/or destination for the transfer. Consequently, holding occurs within our bucket. Fund withdrawal is a transaction to withdraw funds from the bucket to the user-specified wallet.

2. Ethereum-Like Non-Native (e.g. USDT/USDC in ERC-20/BEP-20 Networks)

Etherium-Like Non-Native for instance, USDTUSDC in ERC-20BEP-20 networks

Non-native tokens in such networks are abstract smart contracts. A transaction is essentially a call method for these smart contracts. Each method call in a smart contract requires the native token. However, these tokens are absent from our wallets. Therefore, it’s necessary to transfer a small amount of the native token to order wallets to cover the transfer fee to our bucket. The token transfer itself also incurs a fee on our part.

To optimize costs, wallet reuse is an option after the previous order on the wallet has been processed. Moreover, the same wallet can be used for orders in different currencies, as the fee only needs to be transferred once. Costs of fund transfers from constant addresses can be reduced using various smart contracts enabling bulk transfers. Some networks allow transfers facilitated by fees deducted from the recipient’s wallet.

Account-Based XRP (One Key = One Wallet)

Mikhail notes the key difference from the previous type: there’s also a Memo ID (or memo tag).

Account-Based. One key = one wallet. However, there's also a Memo ID (or memo tag)

As Mikhail explains, all orders are issued to the same hot walled, each specified with different Memo IDs. Payment differentiation occurs based on these Memo IDs. Storage and withdrawal processes generally mirror those of Ethereum. In his view, the memo tagging system further streamlines payment identification without complicating the underlying blockchain transactions.

BTC-Like UTXO (Unspent Transaction Output). One Key = Multiple Wallets

BTC-LIKE UTXO (Unspent Transaction Output). One key = multiple wallets

From a single key, a new wallet for each payment is generated. All funds are stored in these wallets and await withdrawal requests. At the time of withdrawal, the necessary amount in these wallets is located and forms a single withdrawal transaction.

Mikhail notes that due to the unique operating features of Bitcoin’s blockchain, it is necessary to empty all wallets involved in a transaction completely. Thus it may be required to transfer the change to a new or existing wallet.

The Choice Is Yours—Or Maybe Not

As Mikhail has shown, there are distinctive differences not only between traditional methods but also within the diverse realm of crypto acquiring. Traditional transactions, anchored in user-bank confirmations, offer comfort of familiarity and stability. On the flip side, crypto transactions present a fascinating array of choices within their own domain.

Mikhail strongly believes that Ethereum-like native transactions provide efficient payment tracking and periodic fund transfers, making them suitable for streamlined operations. Ethereum-like non-native options introduce abstract smart contracts and cost optimization possibilities, allowing for versatility in transaction handling. Similarly, in his view, XRP’s account-based system stands out for its meticulous payment differentiation.

Lastly, UTXO, while requiring comprehensive wallet management, offers increased privacy and security. In Mikhail’s opinion, the best approach depends on specific needs, preferences, and desired outcomes. Sometimes process familiarity and/or popularity of a specific currency within your market segment may predefine the optimal network and method choice.

Beyond Crypto Acquiring: Adopting a World Standard

Mikhail is of the opinion that optimised key elements of crypto onboarding have the ability to introduce mainstream adoption on a massive level. He elaborates on the way current players with knowledge of crypto deposit, hold, and withdrawal stages will be more comfortable applying cutting-edge blockchain-based financial solutions. Utilizing optimised operations along with expense reduction strategies, they are capable of dealing with quickly changing market scenarios.

Experts tend to call more interoperability throughout blockchains and more user-friendly interfaces among the key forces behind crypto’s emergence as a mainstream payment system to a universal standard adopted by everyone. Due to the natural transparency and efficiency of blockchain transactions, different sectors ranging from cross-border ecommerce to decentralized finance are tending towards these new rails. Eventually, Mikhail suggests, crypto purchasing itself could be but one aspect of greater financial activities, becoming so deeply embedded within the routines of consumers and sellers alike.

Shifting from legacy to crypto-enabled payment processing still involves bridging some gaps—most particularly those of regulation, user education, and infrastructure. Mikhail’s opinion is that regulatory sentiments around the globe are turning more positively toward digital assets, but long-term guidelines are non-existent. Once the regulators give more specific rules, firms will be more willing to invest in crypto payment features.

At the same time, there is education of users. Both buyers and sellers must comprehend wallet management, network confirmations, and security practices. Once word gets out, that resistance that so often discourages newbies will die down, inviting greater adoption. With payment gateways simplifying the deposit-withholding-withdrawing process, crypto payments can rival or even eclipse older techniques on speed, cost, and satisfaction for users.

Disclaimer 1: Not your keys = not your coins.

Disclaimer 2: This article is not financial advice.

Read Also: How Do You Find The Right Crypto Wallet?

Blockchain Technology Crypto Crypto Acquiring Crypto Wallet Smart Contract
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Arun Shakyawar
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Arun Shakyawar is a Tech writer based out of Los Angeles. He holds an Engineering degree in Electronics and communications, and an MBA in marketing. He specializes in TMT. Before writing full-time, Arun worked as a management consultant with leading consulting firms. As a consultant he developed interest in blockchain technology, and now actively tracks blockchain and digital asset markets. Arun can be reached at arun@alexablockchain.com.

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