Crypto payments are a long-promised feature of the technology, dating back to the original bitcoin white paper. But many obstacles have left crypto payments mostly limited to geographies with runaway inflation or tied up in the operations of crypto businesses like miners.
But more companies are building the necessary parts of a system for mainstream crypto payments and expect adoption to happen, even if it may take some time. Mastercard, PayPal, and Stripe have recently made moves to accommodate crypto in consumer payments.
Fireblocks, the crypto infrastructure startup with 1,500 clients including Revolut and Prime Trust, is the latest to do so. The company is releasing a product Monday that enables payment service providers to settle a variety of different types of crypto transactions.
Fireblocks’ new Payments Engine has been used by Checkout.com in a pilot phase and done $1 billion in crypto transactions this year. Now FIS has signed on to do merchant settlement with Fireblocks. FIS’ Worldpay unit already handles card-to-crypto transactions for four large U.S. crypto exchanges, offers USDC settlement, and is planning further moves into crypto.
By providing technology for large institutions to manage and transfer crypto securely, FIreblocks is providing a key piece of the puzzle that these financial firms need to enable crypto payments. While all the other elements needed may not be in place yet, Fireblocks’ offering is laying the groundwork for a future in which spending with crypto is commonplace.
Fireblocks does not handle fiat-to-crypto conversions and doesn’t intend to get into this aspect of payments directly. Instead, it provides technology to handle settlement and other services related to handling crypto.
For example, if a consumer buys crypto on an exchange with fiat currency using a Worldpay-based credit card, the exchange handles sending the crypto to the consumer. Worldpay can then use Fireblocks to settle securely with the exchange via stablecoins in minutes, using a wallet transfer instead of sending fiat, which could take two to three days to settle. Transactions can also be sent 24 hours a day instead of between 9 and 5 on weekdays.
Fireblocks also provides the compliance and reporting that large financial institutions need to do these types of transactions, said Ran Goldi, vice president and head of payments.
Besides helping merchants take payment in crypto, the startup’s new tools could be used for other payment scenarios, including cross-border transactions, creator payouts, and subscriptions. That’s potentially helpful for marketplaces and other companies that currently deal with a wide range of fiat currencies.
For some merchants, the ability to settle almost instantly in stablecoins may be attractive even if they aren’t crypto companies, Goldi said, for the cash flow benefits. Still, he acknowledged, crypto payments have a ways to go. Barriers include regulatory questions, a lack of infrastructure for required identity checks, and the paucity of banks willing to hold stablecoins for customers.
Some banks like Silvergate and Signature are offering digital assets custody services for merchants. If more banks offer support for stablecoins, more merchants will use them, Goldi said. While now there may be “tens” of banks worldwide that support crypto, he expects that number to increase.