Crypto Payment Processing: Fiat Rails for Web3
Crypto businesses need fiat on-ramps and off-ramps. Here's how to navigate the banking challenges.
The Challenge
Crypto businesses need fiat rails - ways for customers to buy crypto with cards or bank transfers, and ways to convert crypto back to fiat. Traditional banks and PSPs are often reluctant.
Business Models That Need Fiat
- Exchanges (on-ramp and off-ramp)
- NFT marketplaces (card payments)
- Crypto wallets (card deposits)
- DeFi platforms (fiat access)
- Mining operations (revenue conversion)
Banking Challenges
Risk Perception
Banks view crypto as high-risk due to volatility, regulatory uncertainty, and AML concerns.
MCC Classification
Crypto often falls under MCC 6051 (Non-Financial Institutions), which many acquirers restrict.
Regulatory Uncertainty
Different jurisdictions have different rules. Acquirers prefer clarity.
Finding Solutions
Specialized PSPs
Some PSPs specifically target crypto businesses. They understand the vertical and price accordingly.
Licensing
Proper licensing (money transmitter, crypto licenses) opens more doors. Regulated entities have better banking access.
Stablecoin Settlement
Some PSPs offer settlement in stablecoins (USDC, USDT), reducing volatility risk.
What to Expect
- Processing rates: 4-8%
- Enhanced due diligence
- AML/KYC requirements
- Transaction monitoring obligations
- Potential volume limits
Compliance Considerations
- Travel Rule compliance
- Wallet screening
- Transaction monitoring
- Sanctions screening
- Record keeping
Key Takeaways
- Fiat rails exist for crypto but require specialist PSPs
- Licensing improves banking access significantly
- Expect higher costs and more compliance requirements
- Stablecoin settlement reduces some volatility concerns
- AML/KYC is non-negotiable
Need help finding the right PSP?
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