- May 9, 2023
- Posted by: [email protected]
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Internet payment processor Stripe has launched a new fiat-to-crypto on-ramp service that aims to solve the “cold start problem” for Web3 companies. The problem refers to customers not having any cryptocurrency in their wallets to carry out transactions. The service will allow Web3 companies to offer US-based customers the ability to purchase crypto at the precise moment they need it without the need to embed any code into a website or app. Customers will simply be directed to a link to convert their fiat into crypto, with Stripe handling several compliance-related tasks for Web3 companies using the on-ramp, including conversion and authorization optimization, identity verification, and fraud prevention. Built-in fraud detection and identity verification tools have been implemented to support companies in meeting Know Your Customer and compliance requirements.
Stripe’s new service is expected to make it easier for users to top up their cryptocurrency wallets. Several Web3 companies, including Brave, 1inch, and Lens Protocol, have already adopted the service.
According to James Mudgett, Brave’s Vice President of Web3 products, the service will allow the platform to reach new Web3 users. Meanwhile, Sergei Kunz, co-founder of 1inch, highlighted the importance of building bridges between Web2 and Web3, adding that Stripe’s experience with Web3 companies makes it well-positioned to help.
While the service is expected to allow many people to easily access Web3, Ohm Shah, co-founder of Wallet Guard, emphasizes the importance of conducting due diligence before purchasing digital assets. Shah stressed that it’s important to consider how easy it is to lose assets, as all it takes is one malicious signature.
Stripe’s new offering comes after Venmo and Robinhood announced their own fiat-to-crypto payment services. Venmo’s service provides a use case for digital assets, allowing for fast and free, near-instant transfers between Venmo wallets and PayPal wallets. Meanwhile, Robinhood’s service, called Robinhood Connect, allows users to purchase and sell crypto using a credit or debit card in their self-custody wallet or natively in decentralized applications.
