How ACH (Alchemy Pay) Works

ACH is the native token for Alchemy Pay, a hybrid platform that bridges the gap between traditional fiat currency systems and cryptocurrencies. Alchemy Pay operates as a payment gateway service, allowing for seamless transactions and conversions between fiat currencies and cryptocurrencies through its network. It was founded in 2017 with the aim of simplifying crypto-fiat interactions in both online and offline settings. Below is a detailed breakdown of how ACH functions within this ecosystem.

Payment Mechanism

Alchemy Pay serves two distinct but interconnected roles in the payment world: enabling crypto payments for traditional products or services, and facilitating traditional fiat payments for cryptocurrencies. Merchants can integrate Alchemy Pay’s hybrid payment gateway into their Point-of-Sale (PoS) systems or online platforms, permitting customers to choose from a variety of payment methods, including cryptocurrencies or fiat currencies. The backbone allowing transactions like this without friction is ACH, the native utility token of the network.

Utility within the Ecosystem

ACH is primarily used to reward and incentivize participants within the Alchemy Pay network. Merchants, developers, and ecosystem partners can earn ACH tokens for using the payment gateways or referring new users, thus fostering growth. ACH tokens can also be staked to receive rewards, adding value to long-term holders of the token.

Cross-Border Transactions

One core feature of Alchemy Pay is its ability to facilitate cross-border payments between two entities in different currencies (crypto or fiat). The gateway can almost instantly convert one form of currency to another, requiring minimal transaction fees. The role of ACH here is to streamline the conversion process and ensure that transaction fees remain low by settling within the Alchemy Pay network, bypassing traditional banking systems to some extent.

Fiat-Crypto Swaps

Alchemy Pay also supports crypto on-ramps and off-ramps, meaning users can seamlessly swap between fiat and digital assets like Bitcoin or Ethereum. The ACH token plays a role in incentivizing liquidity providers who are essential for maintaining fast and sufficient swaps between these two asset classes. Liquidity providers who supply funds for these transactions are rewarded with ACH tokens, which they can then either hold, stake or transfer.

Security and Compliance

Alchemy Pay’s platform complies with various regulatory standards and implements anti-fraud systems. The use of ACH tokens aids in addressing compliance concerns. For example, transaction data can be added to the blockchain, offering transparency while complying with Know Your Customer (KYC) rules, depending on the merchant’s regulatory environment. Although ACH is not uniquely integral to ensuring the security of transactions, it forms part of the wider infrastructure that helps ensure Alchemy Pay’s services meet both security and regulatory standards.