The payment giant Stripe is going to offer a new product that makes it easy to hold cryptocurrencies without registering with a cryptocurrency exchange. What's new in the company fiat-to-crypto You can embed into any crypto product so that users can enter their card information and purchase crypto assets that can be used in another web3 product.
There are a few use cases where widgets like this make sense. The most common is probably non-custodial wallets. Once you have crypto assets in the wallet, you can interact with various web3 products using Wallet Connect. You can buy NFTs, use DeFi products, etc.
But how do you load crypto assets into these software wallets? The most logical use case is for you to first sign up with a centralized crypto exchange like Coinbase or Kraken. Once you have verified the identity, you can buy cryptocurrency and so transfer those assets to the non-custodial wallet.
That is not a perfect experience. That's why non-custodial wallet developers like it Argent o zengo and have been using the fiat-to-crypto widget. Stripe is not the first company to introduce this product. Crypto companies like Moonpay y Ramp they are already available in many crypto wallets.
In that case, MoonPay and Ramp take care of KYC (Know Your Customer) requirements, fraud, and compliance. They support dozens of fiat currencies and clients from over 150 countries. Essentially, you create an account with MoonPay or Ramp when you want to buy crypto assets and top up the wallet, no exchange to wallet transfer required.
That's a much smoother experience since you don't have to jump between multiple products. Of course, comfort doesn't come cheap. MoonPay charges 4,5% on card payments, while Ramp charges 2,9%. Both also offer bank transfers for lower fees.
The path of access fiat-to-crypto from Stripe would work in much the same way. It is currently only available to US customers who are invited to try the product.
When a user wants to buy crypto, the Stripe widget asks how much they want to spend in their fiat currency; the company adds the fees on top of that value. You can then select the cryptocurrency you want and see how much you will receive once the trade is confirmed.
Image credits: Stripe
In the example screenshot from Stripe, the company charged $4.99 to purchase $100 worth of USDC. But that fee may vary depending on the amount and method of payment. Since it is a Stripe product, it should work with different payment methods from day one, such as card payments, bank transfers, Apple Pay, Google Pay, etc. Behind the scenes, Stripe is associated with zerohash to obtain cryptocurrencies.
Stripe hopes its widget will appeal to developers working on DEXs, NFT platforms, wallets, and dApps. For example, the company says that it has been testing the product with audius (a blockchain-based music streaming platform), magic eden (an NFT marketplace) and Silver (an Ethereum wallet).
The payments company handles KYC (Know Your Customer), payments, fraud, and compliance so that cryptocurrency businesses can focus on cryptocurrencies instead of competing with Stripe.
There are also some secondary benefits with the product fiat-to-crypto from Stripe. For example, it integrates with Link from Stripe. If you purchased with Stripe in the past and saved your payment information, Stripe can help you retrieve this information and check out faster.
After the FTX debacle, products like Ramp, MoonPay, and the Widget fiat-to-crypto Stripe will be essential. They can make it easier to avoid centralized exchanges. And it's good to see that there are several companies that are still working on this business model.
