- Processing payments in Diem is cheaper than processing credit card payments.
- The easiest way to accept Diem payments is by integrating a digital payment gateway like First’s.
- Accepting payments in Diem is easy and doesn’t require any technical background in Diem or blockchain.
- Merchants must qualify as a VASP (Virtual Asset Service Provider) or register under a certified VASP in order to start accepting Diem payments.
- Diem payments can be paid out in your local currency.
Diem is a rapidly-growing digital currency which allows users to transfer digitized money in both a quick and affordable way. It also gives merchants a method of accepting digital payments which is a lot cheaper than traditional credit card processing.
However, most payment service providers will need an intermediary in order to process Diem payments. First Digital Payments is the company bridging the gap between payment service providers and the Diem blockchain. By integrating with First’s API, payment service providers will be able to offer merchants a fast and easy way to get paid with Diem.
If you’re still unclear about what First’s Diem payment gateway is or how it works, don’t sweat it. In this article, we’ll go over six crucial aspects of First’s API to explain what it does and how it works.
Why Accepting payments in Diem can be a significant advantage for your business?
The Diem Coin allows you to accept payments from all over the world, instantly and without having to deal with the costs of credit card processing fees.
As more consumers turn to Diem to exchange money through popular apps like WhatsApp and Facebook Messenger, it will likely become a very popular payment method very quickly. Soon, payment service providers who are able to process and accept Diem payments will hold a competitive edge over sellers who don’t.
If you qualify as a VASP (Virtual Asset Service Provider), your business will be able to start accepting Diem payments through First’s API once Diem launches.
Note: This article is geared toward payment service providers. If you are a merchant who wants to accept Diem, contact your payment service provider to inquire if they’ve integrated with an API like First so that you can start processing Diem payments today.
Key Facts about First’s API
What is Diem?
Diem is a new digital currency. It is a stablecoin backed by the US Dollar, meaning that its value only changes when the value of a local currency does. Diem Coins are exchanged on a permissioned blockchain managed by the Diem Association.
What is First?
First is a company specializing in cryptocurrency payment processing. Its API-based platform provides a method for payment service providers to process stablecoins and CBDCs such as Diem.
What is an API?
API stands for Application Programming Interface. It is a kind of software that creates a connection between two existing programs of software. For example, First’s API allows payment service providers’ existing systems to communicate with the Diem blockchain.
First’s Diem Payment Gateway: How Does It Work?
The first step towards accepting Diem payments is to integrate an API like First’s. First’s API works as an intermediary between the Diem blockchain and payment service providers. In short, First’s API allows your business to process Diem payments by communicating with the Diem blockchain on your behalf. When you integrate with First’s API, First takes care of:
- Providing merchants with a custody wallet
- Giving merchants’ customers an easy way to pay with Diem at checkout
- Conducting risk checks such as anti-money laundering checks
- Communicating with the Diem blockchain
- Burning Diem Coins into local currency
- Transfering merchants paid funds
On part of the VASP, there is very little action needed. First removes much of the complexity of dealing with the Diem blockchain by providing PSPs with an API toolkit that allows them to start accepting Diem payments instantaneously once integrated.
First’s payment gateway allows merchants to accept Diem payments through their payment service provider. Here are the six aspects of First’s Diem payment gateway:
Creating a payment intent for customers
When payment service providers integrate with First’s API, the merchants they work with will be able to start accepting payments in Diem from customers. This means that merchants can now add Diem as a payment method option to their stores. First creates a payment intent by giving merchants:
- The total converted purchase sum in Diem dollars
- A list of digital wallets that customers can use
- A QR code that customers can scan to make a payment
In short, there is very little work needed on part of the merchant. First provides businesses with all they need to offer their customers the option to make their purchase using Diem Dollars.
Providing custody to merchants
To send and receive Diems, customers will need a digital wallet Like Novi . The same is true of merchants. First provides merchants with custody services — including a merchant-specific wallet through which they can get paid.
Conducting risk checks
When payment service providers use First’s Diem payment gateway, they benefit from added fraud protection. When someone makes a payment using Diem, First always ensure the payment is legitimate and secure. This includes conducting fraud checks and applying anti-money laundering policies which ensure everything is in order. The payment only goes through once it's been verified.
Communicating with the blockchain
Once a payment is approved, First transfers the funds on the Diem blockchain. First does this by creating a new transaction, or a new “block” to be added to Diem’s secure permissioned blockchain. Since First takes care of communicating with the blockchain on behalf of PSPs, there’s no need for payment service providers or merchants to deal with the complexity of interacting with the Diem blockchain.
When paying in Diem, customers send money in Diem Dollars or other Diem currencies. However, the merchant receives the payment in their local currency, whether it's the US Dollar, European Euro, or British Pound. First handles liquidation from beginning to end by converting digital currencies like the Diem Dollar into fiat money such as USD.
Transfering funds to merchants
The final step involved is merchant payout where First provides finalized payments to merchants. The reconciliation process involves transferring the money that merchants are owed into their accounts. Keep in mind that the sum merchants receive comes in the form of their chosen local currency.
What Comes Next
Accepting Diem payments through First is fast and easy. But it can really change the deal for the merchants you work with. Here are some of the things that will happen once you provide merchants with the ability to start accepting payments in Diem.
Customers Can Make Purchases in Diem
Once a payment service provider integrates with First’s API, merchants will be able to build a checkout process Diem payments. This means that when customers are redirected to a checkout page, they will be shown an option to pay in Diem. This option automatically displays the final amount of the transaction in Diem Dollars (or other Diem currencies) and connects customers to a digital wallet of their choice. Customers will also get an option to pay with Diem by scanning a QR code on their phone, which can make the experience faster.
Merchants Choose How to Get Paid in Diem
For merchants, accepting Diem payments can result in extra business from new clients and extra income from lower transaction fees. It also means receiving a number of new options when it comes to customer payout. Merchants will get to choose between two main types of payments:
- Immediate Capture
Immediate Capture allows First to capture funds of a transaction as soon as the customer confirms their purchase. In other words, when a customer authorizes their payment, the money is taken directly from their digital wallet and is given directly to the merchant’s wallet.
Authorized Payments are more similar to credit card payments. After a customer clicks pay, the transaction amount is locked in by the wallet. After a couple of days, the merchant can decide whether or not to capture the funds. If they realize that some of the products they’re selling are not in stock, merchants can decide not to capture the funds. This method prevents merchants from having to issue refunds.
Some merchants may also want to get paid through Subscription-based Payment models. This is also possible with Diem. Using First, merchants will be able to ask customers to consent to a set amount that will be pulled from their wallet on a regular and ongoing basis.
With First, merchants also have the option to ask customers for the maximum amount of money that can be taken from their account each month or each week. This means customers will be able to make payments for services they use regularly without the need to authorize the transaction each time.
Merchants Get Paid Out in Their Local Currency
One of the best parts about accepting Diem payments is that it’s business as usual on part of the merchant. First takes care of burning, or liquidating Diem Coins into local fiat currencies. This means that merchants receive money in their local currency without having to do the conversion work themselves.
First’s Diem Payment Gateway Makes Using Diem Easy
First helps payment service providers and merchants process Diem payments without any technical know-how or involvement. By integrating with First’s API, your business will be able to accept Diem payments as well as offer the option to every merchant you work with. If that’s something you’re interested in, reach out to First’s team of financial experts to learn more about how to start integrating First today.