Stripe is a popular payment processing application that allows businesses to accept debit cards, credit cards, and other forms of payment. Stripe is used by some of the world’s largest companies, including Amazon, Shopify, Target, and Walmart. It’s also used by smaller local businesses as well. In total, Stripe has 2 million+ global customers, and 3.1 million+ websites use it as their payment processor. It’s hard to believe that 90% of U.S. adults have bought a product from a business that uses Stripe.
It only makes sense that a payment processor this large would enter into the Web3 space. A large component of Web3 is cryptocurrency, and a large section of the crypto space is involved in making peer-to-peer payments or transactions. So it seems like a natural progression to have a large Web2 payment processing company bring more users to Web3, and that is exactly what Stripe has done.
The new offering is a customizable fiat-to-crypto onramp widget that can be embedded into DEXs, NFT platforms, and dApps. When the widget is embedded into these applications, it allows existing and new Stripe users to buy crypto with a credit or debit card. Stripe handles KYC and fraud compliance. Stripe claims that the widget integration is super simple and can be done “with just 10 lines of code.” The product isn’t the first of its kind, but the main difference here is how many users it will provide access to.
Essentially, anyone that uses Stripe’s secure checkout service called Link, can seamlessly use the new widget to buy crypto from any Web3 application that it’s embedded into. That means the user would already have done KYC and simply has to click on the widget to purchase their crypto. The main advantage of this system is that it could eliminate the need to go through additional KYC on a Centralized Exchange (CEX). Instead, the user can bypass CEXs and just use the widget to receive crypto into their wallet of choice.
Most of the widgets’ current users are building on Solana. Hopefully, Stripe will start reaching out to more blockchains in the near future. One DEX on Solana called Orca has partnered with Stripe to use the new onramp widget. On Orca’s Twitter page, they even offered a quick thread telling their users how to use the widget.
1. Connect your wallet on https://t.co/YSX6dQdYcn, click the dollar sign.
2. Purchase your beautiful tokens.
3. Voila. Your tokens have been transferred to your wallet!
Not too shabby, huh? 🐳 pic.twitter.com/PQKkb9GwGA
— Orca ☀️ (@orca_so) December 1, 2022
A downside is the fees associated with these types of fiat-to-crypto onramps. They can be hefty and can eat into your investment. It’s unclear exactly how much Stripe will be charging, but it would be helpful for mass adoption to keep fees to a minimum.
Overall, this is bullish for crypto in general. Having a massive payment processor entering into the crypto industry will bring more users into the space. And eliminating the need to deal with pesky CEXs will also help users keep better custody of their coins.
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