Worldpay, the payment-processing arm of technology vendor FIS, is now providing Crypto.com the ability to move fiat money in and out of cryptocurrency.
Nabil Manji, London-based lead for global crypto and emerging businesses at Worldpay, says the company works with other crypto exchanges, wallets and brokers. The difference with Crypto.com is the scope of localizing processing in multiple countries.
Over the past six or seven years, Worldpay crypto clients went from operating in just one jurisdiction to become global exchanges with operations centered in locations like Singapore, Hong Kong, or a European Union country.
With Crypto.com, the processor is providing a more localized service in multiple markets, connecting it with a variety of onshore payment channels. “The consumer experience is better with local payment methods,” Manji said. “Costs are lower, fraud is less, and payment methods are more relevant.”
For example this means allowing people in Southeast Asia to use electronic wallets to use local currency to get into Crypto.com’s environment, whereas Europeans may prefer transferring the money from an online bank account.
On top of this, Worldpay is hosting a validation node on Crypto.com’s proprietary blockchain, called Crypto.org Chain. Manji says the blockchain is the conduit for high-speed payments, whether it be among businesses or consumers.
At this stage, he acknowledges there isn’t a benefit to end consumers if their money is processed via the blockchain: “But it’s interesting. As a payments company, we want to be familiar with the technology. Crypto.com has a large consumer base.”
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Crypto.com claims over 10 million users worldwide.
Manji says Worldpay wants to stay close to the technology to understand differences in validation among Proof of Work, Proof of Stake, and other consensus methodologies.
“Proof of Stake is new to us, and we want to compare its energy usage, computing power and other features,” Manji said. “We’re listening and learning.”
For now, Worldpay’s role is limited to fiat ramps (fiat money in and out of Crypto.com). It is a merchant acquirer. In the crypto world, this means it processes merchant payments on behalf of network operators like Visa and Mastercard, owning that customer relationship so Visa and Mastercard don’t have to take the risk of onboarding those merchants. Worldpay takes responsibility for things like know-your-customer checks.
Worldpay only deals with sovereign money going in and coming out. It’s not processing payments within the crypto space. It’s exploring decentralized applications, alternative chains, and how to prepare for central-bank digital currencies.
By connecting its clients with local payment methods, Worldpay lets their customers pay their vendors, suppliers or employees in crypto.
But something more crypto-native could emerge. Manji says Worldpay plans to launch a stablecoin settlement product. This would enable it to process debit or credit card payments denominated in cryptocurrency without having to touch the underlying fiat.
Crypto for payments?
This begs the question: are people or businesses using crypto to make payments?
Manji says they are not, at least not in significant numbers. More people are signing up for crypto-backed debit cards. Visa announced at the end of January this year that last quarter it processed $2.5 billion in transactions of crypto-linked cards. That’s a 70 percent jump over the entire amount processed in 2021. Crypto.com is one of Visa’s card issuers.
But that sum is a drop in the $2 trillion ocean of global card payments processed in 2021, according to McKinsey. Or of the $2.4 trillion of e-commerce payments made in 2020 in Asia Pacific alone, according to FIS. FIS itself processed $2 trillion in worldwide transactions last year. The industry total is at least $20 trillion.
Bitcoin, ether and other crypto are volatile and their transaction (“gas”) fees are high, making crypto untenable as a payments tool. But Manji notes that companies like Circle are developing stablecoins that transact on newer, faster blockchains like Solana that clear in seconds at ultra-low fees.
Stablecoins bring their own complications – such as proving their reserves are adequately backed – and volumes are not large. “But if this sort of thing scales, it could get interesting,” Manji said. “Visa and Mastercard infrastructure brings their own headaches too. If a merchant wants to dabble in crypto, we’d like to help.”