Blockchain Payment Infrastructure Technologies Driving Mainstream Web3 Adoption -…

As the shift towards Web3 projects continues to accelerate, it seems natural for enterprises to offer their customers as many convenient payment options as possible, including purchasing cryptocurrency with the fiat currency of their choice. But that is currently not the case in decentralized finance (DeFi). 

According to the latest survey by Checkout.com, “40% of the 18–35 year-olds say they would like to pay for goods and services with crypto during the course of  2022. Some have already experimented in doing so. However, importantly, the vast majority of such experiments are not wallet-to-wallet transactions, but instead rely on payment processors and schemes whose products help bridge the gap between fiat and cryptocurrencies”. As crypto moves towards mainstream, fiat on-ramps enable businesses to integrate crypto purchases with fiat money into their platforms, improving conversion rate and reducing the risk of users leaving before they’ve completed their purchase. 

In the context of entering and operating in DeFi, it is convenient for consumers to buy cryptocurrencies using their bank account or debit card. It is clear that fiat on and off ramp gateways are the future of growing DeFi from both a retail and institutional point of view. 

So, what are fiat on-and-off ramps and why are they critical to taking crypto mainstream? Why e-commerce businesses, NFT platforms and cryptocurrency exchanges increasingly look into integrating with a fiat on-ramp gateway? 

Fiat “on-ramps” and “off-ramps” – what are they

An “on-ramp” is a gateway to exchange traditional fiat currencies, like EUR, USD, GBP, and others to cryptocurrencies while a crypto “off-ramp” lets users exchange crypto to fiat. As the digital economy is diversifying, ramps for fiat are critical for widespread adoption, granting peace of mind to users who know they may trade crypto for fiat at any time they want. Therefore, crypto on-and-off-ramp gateways are ideal because they combine both capabilities.  The on-and-off ramps can be integrated through API or a widget method.

Recent use cases

As the global adoption of digital assets continues to grow, more businesses than ever start integrating cryptocurrencies into their payment platforms.

Recently, several players, like the crypto exchanges Bybit and Matrixport, Plaid and Bybit-backed GameFi Yeeha Games, announced integration with Cabital Connect, a fiat on-and-off ramp platform. Payment platforms startups, like fiat-to-crypto payment gateway Onmeta have recently announced fundings. According to the company’s founder and CEO Bharat T., “mainstream adoption of Web3 projects is only possible if Web2 UX can be brought to the Web3 ecosystem,” and that’s where enterprise on-and-off ramp technologies come to rescue. Users of the NFT marketplace iNFTSpace have also recently announced they can now enjoy more direct purchases of digital artworks via Alchemy Pay’s fiat-to-crypto gateway plugin. 

Hundreds of other projects around fiat-to-crypto payment infrastructure space are being under way. As the adoption of cryptocurrency continues to grow, on-ramp and off-ramp solutions become increasingly important. On-and-off ramp payment infrastructure connects businesses and consumers to the world of crypto and Web3 and their adoption will only grow in the future. 

Challenges and key factors when choosing fiat on-ramps

One of the biggest challenges presented to traditional businesses when choosing a fiat on-ramp, remains how to follow the law, since there are many nuances with compliance for crypto businesses in different jurisdictions. To prevent money laundering, sponsoring terrorism, drug and human trafficing, it’s essential to closely follow international and local regulations. 

Key factors to pay close attention to when choosing a fiat on-ramp include: 

• Security
• Strong KYC & AML processes 
• Verification procedures
• AML screening & monitoring 
• Real-time global sanction screening