Traditional Payment Processing Companies Are Increasingly Focusing on Crypto
More than two decades after the dot-com bubble ushered in a new era of digital commerce, the payment infrastructure is still very much in flux. That reality is even more prevalent as 2020 approaches, and the cryptocurrency movement is offering a new tool and a unique complication into today’s approach to executing payments.
Indeed, the past year has seen an exciting confluence of traditional payments companies and cryptocurrencies as platforms like Skrill, PayPal, and others strive to provide new avenues to acquiring and using digital currencies.
In many ways, their development has instituted an already-not yet dichotomy where significant gains are evident but not fully realized. To put it simply, traditional payment companies are making progress, but not enough to call the work complete.
After years of development and maturation, many traditional payment companies no longer see cryptocurrencies an aberration. Instead, they see it has an opportunity to embrace what is sure to be a prominent expression of
finance in the digital age.
In response, they are increasing their products and services to the crypto community. For example, the online payment services platform Skrill is expanding its reach into crypto with its recently announced crypto-to-crypto buy and sell service that allows users to
exchange Bitcoin for other cryptocurrencies.
Skrill has been offering a fiat-to-crypto gateway for more than a year, initially allowing users to buy cryptocurrencies using a credit card or a bank transfer. This new offering is an easy-to-use gateway that provides a pathway for crypto enthusiasts and novice users alike to access digital currencies.
However, while their service expansion reflects the continued interest in digital currencies as a payment methodology, it also represents the trouble that traditional platforms have with crypto custody. Skrill’s latest offering is a custodian service, which means that users don’t have direct ownership of their assets, something that chaffs the priority of asset management.
Similarly, Revolut, a London-based fintech firm, is pursuing a $500 million funding round to expand its
cryptocurrency offerings. Commenting on the efforts, the company’s CEO, Nikolay Storonsky, expounded on the company's goals, explaining,
We want to raise at least $500 million in direct equity and potentially, maybe at a later stage, up to $1 billion in convertible (debt).
At times, Revolut has faced questions about its anti-money laundering controls, a shortcoming that will need to be addressed before more users and regulators will give it a broad stamp of approval.