Building a Secure Crypto-to-Fiat Payment Gateway: Bridging Digital and Traditional Finance

The Challenge

Building a payment gateway that bridges cryptocurrency and traditional banking is one of the most complex challenges in FinTech. It requires:

At Capitalino, I was tasked with building this critical infrastructure from scratch.

Architecture

┌─────────────────────────────────────────┐
│      Payment Gateway Service           │
│  - Transaction orchestration           │
│  - Rate management                     │
│  - Security layer                      │
└──────────────┬──────────────────────────┘
               │
    ┌──────────┼──────────┐
    │          │          │
    ▼          ▼          ▼
┌────────┐ ┌────────┐ ┌────────┐
│Exchange│ │Exchange│ │Exchange│
│   A    │ │   B    │ │   C    │
└────────┘ └────────┘ └────────┘
    │          │          │
    └──────────┼──────────┘
               │
               ▼
        ┌──────────┐
        │  Bank    │
        │  API     │
        └──────────┘

Core Implementation

1. Exchange Rate Management

class ExchangeRateService {
  private rates: Map = new Map();
  private lastUpdate: Map = new Map();
  
  async getRate(fromCurrency: string, toCurrency: string): Promise {
    const pair = ${fromCurrency}_${toCurrency};
    
    // Check if rate is fresh (less than 30 seconds old)
    const lastUpdateTime = this.lastUpdate.get(pair) || 0;
    const now = Date.now();
    
    if (now - lastUpdateTime < 30000) {
      return this.rates.get(pair)!.rate;
    }
    
    // Fetch fresh rate from multiple sources
    const rates = await Promise.allSettled([
      this.fetchFromExchangeA(pair),
      this.fetchFromExchangeB(pair),
      this.fetchFromExchangeC(pair)
    ]);
    
    // Calculate weighted average
    const validRates = rates
      .filter(r => r.status === 'fulfilled')
      .map(r => (r as PromiseFulfilledResult).value);
    
    if (validRates.length === 0) {
      throw new Error('No exchange rates available');
    }
    
    const avgRate = this.calculateWeightedAverage(validRates);
    
    // Update cache
    this.rates.set(pair, { rate: avgRate, timestamp: now });
    this.lastUpdate.set(pair, now);
    
    return avgRate;
  }
  
  private calculateWeightedAverage(rates: Rate[]): number {
    // Weight by exchange volume and reliability
    const weights = rates.map(r => r.volume * r.reliability);
    const totalWeight = weights.reduce((sum, w) => sum + w, 0);
    
    return rates.reduce((sum, r, i) => {
      return sum + (r.rate * weights[i] / totalWeight);
    }, 0);
  }
}

2. Secure Transaction Processing

class PaymentGatewayService {
  async processPayment(
    userId: string,
    amount: number,
    fromCurrency: string,
    toCurrency: string
  ): Promise {
    const session = await mongoose.startSession();
    session.startTransaction();
    
    try {
      // 1. Lock user account
      const user = await UserService.lockAccount(userId, session);
      
      // 2. Verify balance
      const balance = await BalanceService.getBalance(
        userId,
        fromCurrency,
        session
      );
      
      if (balance < amount) {
        throw new InsufficientFundsError();
      }
      
      // 3. Get exchange rate
      const rate = await this.exchangeRateService.getRate(
        fromCurrency,
        toCurrency
      );
      
      const convertedAmount = amount * rate;
      
      // 4. Execute atomic transaction
      await Promise.all([
        BalanceService.debit(userId, fromCurrency, amount, session),
        BalanceService.credit(userId, toCurrency, convertedAmount, session),
        TransactionService.create({
          userId,
          fromCurrency,
          toCurrency,
          amount,
          convertedAmount,
          rate,
          status: 'completed',
          timestamp: new Date()
        }, session)
      ]);
      
      // 5. Log for audit
      await AuditService.log({
        type: 'payment',
        userId,
        amount,
        fromCurrency,
        toCurrency,
        rate,
        timestamp: new Date()
      }, session);
      
      await session.commitTransaction();
      
      return {
        success: true,
        transactionId: transaction._id,
        amount: convertedAmount
      };
      
    } catch (error) {
      await session.abortTransaction();
      logger.error('Payment processing failed', { error, userId });
      throw error;
    } finally {
      session.endSession();
    }
  }
}

3. Exchange Integration

class ExchangeIntegrationService {
  async executeTrade(
    exchange: string,
    pair: string,
    side: 'buy' | 'sell',
    amount: number
  ): Promise {
    const client = this.getExchangeClient(exchange);
    
    try {
      // Create order
      const order = await client.createOrder({
        symbol: pair,
        side,
        type: 'market',
        amount
      });
      
      // Wait for execution
      const executed = await this.waitForExecution(order.id, client);
      
      return {
        success: true,
        executedAmount: executed.amount,
        executedPrice: executed.price,
        fees: executed.fees
      };
      
    } catch (error) {
      logger.error('Exchange trade failed', { error, exchange, pair });
      
      // Retry with different exchange
      return this.executeTradeWithFallback(pair, side, amount);
    }
  }
  
  private async executeTradeWithFallback(
    pair: string,
    side: 'buy' | 'sell',
    amount: number
  ): Promise {
    const exchanges = this.getAvailableExchanges(pair);
    
    for (const exchange of exchanges) {
      try {
        return await this.executeTrade(exchange, pair, side, amount);
      } catch (error) {
        logger.warn('Exchange failed, trying next', { exchange });
        continue;
      }
    }
    
    throw new Error('All exchanges failed');
  }
}

4. Security Measures

// Rate limiting
const paymentLimiter = rateLimit({
  windowMs: 60 * 1000, // 1 minute
  max: 10, // 10 payments per minute
  message: 'Too many payment requests'
});
// Fraud detection
class FraudDetectionService {
  async checkTransaction(transaction: Transaction): Promise {
    const checks = await Promise.all([
      this.checkVelocity(transaction.userId),
      this.checkAmount(transaction.amount),
      this.checkPattern(transaction.userId),
      this.checkBlacklist(transaction)
    ]);
    
    const riskScore = checks.reduce((sum, check) => sum + check.risk, 0);
    
    if (riskScore > 70) {
      return {
        allowed: false,
        reason: 'High risk score',
        requiresReview: true
      };
    }
    
    if (riskScore > 40) {
      return {
        allowed: true,
        requiresReview: true
      };
    }
    
    return {
      allowed: true,
      requiresReview: false
    };
  }
}

Results

Metrics

Security

Lessons Learned

Conclusion

Building the crypto-to-fiat payment gateway was one of the most challenging and rewarding projects of my career. It required deep understanding of financial systems, security, and distributed systems. The gateway successfully processed millions of dollars in transactions with 99.7% success rate and zero security incidents.

The experience taught me that building financial infrastructure is about more than just code—it's about reliability, security, and trust.

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