> For the complete documentation index, see [llms.txt](https://docs.paymento.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.paymento.io/overview/how-payments-work.md).

# How Payments Work

Paymento connects your business to multiple blockchain networks, provides a hosted checkout, detects incoming transactions, tracks confirmations, and notifies your system when a payment changes status.

Paymento does not take possession of merchant funds. Where a payment arrives and whether settlement is required depend on the wallet method selected for the store.

### Payment lifecycle

A typical Paymento payment moves through five stages:

1. Your store creates a payment request.
2. The customer selects an asset and network.
3. Paymento presents the appropriate checkout experience.
4. Paymento detects and confirms the blockchain transaction.
5. Your business receives a notification and verifies the result.

For Embedded Wallet stores, merchants can later initiate a separate, merchant-authorized settlement to consolidate received funds into their configured destination wallet.

### 1. A payment request is created

A payment request contains information such as:

* The amount to be paid
* The merchant’s order reference
* The store receiving the payment
* Optional order information
* The URL where the customer should return after checkout

Payment requests can originate from:

* A direct Paymento API integration
* A prebuilt e-commerce plugin
* A Payment Link
* A supported community or merchant integration

Paymento creates a unique payment token and uses it to open the hosted checkout.

Developers can find request parameters, authentication requirements, and response examples in the [API Overview](/api-documentation/api-overview.md) and [Payment Request](/api-documentation/payment-request.md) documentation.

### 2. The customer selects an asset

At checkout, the customer selects one of the cryptocurrencies and networks enabled for the store.

After the asset is selected, Paymento prepares the payment instructions and opens a payment window. The customer must send the requested amount using the displayed network and asset.

Sending a token on the wrong network does not complete the payment, even when the token has the same name or symbol.

### 3. Paymento presents the checkout

The checkout experience depends on:

* The store’s wallet method
* The selected blockchain
* The selected asset
* The customer’s device and compatible wallets

Paymento supports two primary checkout experiences.

#### Address and QR code

Paymento displays a receiving address, payment amount, and QR code. The customer can send the payment from a compatible wallet or exchange account without connecting a wallet to Paymento.

This experience is available for:

* Supported UTXO-based networks
* Supported account-based networks using Embedded Wallet, subject to network limitations

#### Connected wallet

Paymento asks the customer to connect a compatible browser or mobile wallet and approve the transaction.

This is currently required for Bring Your Own Wallet stores on supported account-based networks, such as Ethereum, Solana, and Tron. It is also currently required for Tron and TRC-20 payments using Embedded Wallet.

Customers paying from an exchange account or a wallet that cannot connect may be unable to complete a connected-wallet checkout.

### Checkout by wallet method

| Network type                     | Bring Your Own Wallet               | Embedded Wallet                           |
| -------------------------------- | ----------------------------------- | ----------------------------------------- |
| Supported UTXO-based networks    | Address and QR code                 | Address and QR code                       |
| Supported account-based networks | Connected wallet generally required | Address and QR code on supported networks |
| Tron and TRC-20                  | Connected wallet required           | Connected wallet currently required       |

Network and asset support can change as Paymento expands its infrastructure. Refer to [Supported Networks and Assets](/overview/supported-networks-and-assets.md) for the current source of truth.

### 4. Paymento monitors the transaction

Paymento monitors the relevant blockchain after payment instructions are issued.

As the transaction progresses, Paymento may detect:

* A transaction that is waiting for confirmation
* A fully confirmed payment
* A partial payment
* An overpayment
* Multiple transactions toward the same payment
* A payment received after the payment window
* A failed or reverted transaction, where applicable

Confirmation requirements vary by blockchain and asset. Merchants should not assume that transaction detection alone means a payment is final.

If a customer sends less than the requested amount, Paymento may display the remaining balance and allow the customer to complete the payment during the applicable payment window.

See [Payment States and Confirmation](/api-documentation/payment-states-and-confirmations.md) for the complete status lifecycle and recommended merchant actions.

### 5. Paymento notifies the merchant

When the payment changes status, Paymento can notify the merchant through an Instant Payment Notification, or IPN.

The merchant’s server should:

1. Validate the notification.
2. Call Paymento’s verification API from the server.
3. Review the returned payment status.
4. Fulfil the order only after the required payment status and confirmations are reached.

A customer’s browser redirect must not be treated as proof of payment. The redirect only returns the customer to the merchant’s website; it does not independently verify the blockchain transaction.

Developers should review:

* [Payment Callback](/api-documentation/payment-callback.md)
* [Payment Verification](/api-documentation/payment-verify.md)
* [Merchant Responsibilities](/security-and-trust/merchant-responsibilities.md)

### Where the funds arrive

The destination of a payment depends on the store’s wallet method.

#### Bring Your Own Wallet

Payments arrive directly in the merchant’s configured external wallet.

Paymento monitors the payment but does not receive or forward the funds. Because the funds are already in the merchant’s wallet, no settlement step is required.

#### Paymento Embedded Wallet

Payments arrive in receiving addresses within the merchant-controlled store wallet.

The merchant remains the signing authority. Paymento cannot independently transfer, freeze, or settle the funds.

When the merchant is ready, balances can be consolidated to the store’s configured destination wallet through a merchant-authorized settlement.

### Embedded Wallet settlement

Settlement is separate from payment processing and applies only to Embedded Wallet stores.

During settlement:

1. The merchant selects the available funds to settle.
2. Paymento prepares the settlement request.
3. The merchant reviews and authorizes it using their passkey.
4. The relevant blockchain processes the transaction.
5. The funds are consolidated into the configured destination wallet.

Paymento uses network-specific settlement workflows adapted to each supported blockchain. The underlying implementation may differ by network, but Paymento cannot complete settlement without merchant authorization.

Blockchain network fees apply when settlement is performed. See [Settlement ](/embedded-wallet/settlement.md)and [Fees and Pricing](/company/fee-and-pricing.md) for details.

### Payment Links and plugins

Payment Links and e-commerce plugins use the same underlying payment lifecycle.

* A **Payment Link** creates the payment experience without requiring the merchant to build an API integration.
* An **e-commerce plugin** creates payment requests from within the merchant’s existing checkout.
* A **direct API integration** gives developers more control over order creation, verification, and fulfilment.

Some products may use additional webhook events or metadata. Refer to the documentation for the specific integration being used.