Custodial vs non-custodial wallet for crypto payments
The difference is who holds the private keys. Everything else — when you can spend, who can freeze you, what a failure costs — follows from that.
A custodial processor receives your customers' payments into a wallet it controls and pays you out later, on its schedule and terms. A non-custodial gateway never receives them: the payment goes straight to an address from a wallet only you control, and the gateway watches the chain and tells you it arrived.
Neither is free. Custody trades control for convenience: the provider can handle payouts, conversion and account recovery, and in return it can delay, limit or freeze what it holds for you. Non-custody gives you the money the moment the network confirms it, and in return you look after your own keys.
The table below compares the two on the questions that matter day to day. Where Unheld is the example, it describes how Unheld works: it keeps no private keys, never receives your recovery phrase and cannot move funds on your addresses.