At a basic level, it sits between your checkout page and the blockchain. When a customer pays in crypto:


The gateway generates a unique wallet address/QR code for that transactionIt monitors the blockchain for confirmationsOnce confirmed, it either credits your account in crypto or auto-converts to fiat (depending on your settlement preference)It notifies your system (via webhook/API) so the order can be marked as paid


The tricky part is handling volatility during the confirmation window and making sure the conversion rate locked at checkout is honored. Good gateways also handle multiple blockchains under one API so you're not integrating separately for BTC, ETH, and stablecoins.


If you want to see how a full crypto payment gateway development process typically breaks this down, it's a decent reference for understanding the moving parts before you scope your own project.