Internet payment processor Stripe has introduced a fiat-to-crypto on-ramp to address the “cold start problem” faced by Web3 companies due to customers not having “crypto in their wallets to carry out transactions.”
According to a May 4 statement, Stripe’s newly launched fiat-to-crypto on-ramp, which Stripe itself will host, will allow Web3 companies to offer United States-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. Instead, customers will be directed to a link to convert their fiat into crypto.
Guillaume Poncin, head of engineering for crypto at Stripe, said Stripe would handle several compliance-related tasks for Web3 companies using the on-ramp, including conversion and authorization optimization, identity verification and fraud prevention, to help “customers start using Web3 services quickly and safely.“It was noted that built-in fraud detection and identity verification tools were implemented to support companies in meeting Know Your Customer and compliance requirements.
Implementing the new on-ramp service aims to support Web3 companies by providing a user-friendly way for customers to top up their crypto wallets. It stated,“Companies interested in offering cryptocurrency and blockchain-enabled experiences often face a cold start problem. Their customers don’t have the crypto in their wallets to carry out transactions.”
Several Web3 companies, including privacy-focused browser Brave, decentralized finance protocol 1inch and blockchain protocol Lens Protocol, have already implemented Stripe’s fiat-to-crypto on-ramp, according to the statement. James Mudgett, vice president of Web3 products at Brave, stated that the service will allow the platform to “reach new Web3 users.” Meanwhile, 1inch co-founder Sergei Kunz highlighted the importance of building “bridges between Web2 and Web3,” adding that Stripe’s experience with Web3 companies makes it “well positioned to help.”