Ask the expert: How crypto merchants can beat the competition with seamless fiat on- and off-ramps

Micah Kershner | Global eCommerce Business Development Manager, Worldpay

December 03, 2019

Micah Kershner is a Global eCommerce Business Development Manager specializing in digital assets at Worldpay and has 18 years’ experience in the payments industry. He has spent the past three years focused on helping cryptocurrency and blockchain companies accept fiat currencies via credit and debit card.

Fiat on-ramps allow people to bring their fiat currency into the crypto ecosystem. This can be achieved in two ways: first, the account load model, where a user deposits fiat currencies to their exchange account or wallet; alternatively, the “click to buy” model for the direct purchase of a crypto via a real-time payment method like a credit or debit card. Fiat off-ramps, by contrast, involves the withdrawal of fiat currency balances from a user’s exchange account or wallet to the user’s bank account or prepaid card. Both the on and off-ramps make a significant difference to the number of customers a crypto exchange can reach. The trick is to create the right customer experience for your market. In this blog, we take a look at how seamless fiat on and off-ramps could be the deciding factor in a user choosing your crypto exchange and how they can help you get ahead of the competition. 

What drives users to one crypto exchange over another?

It could be a variety of factors, such as reputation, liquidity, fees and the user experience. The highly profitable retail investors that exchanges want to attract are looking for a frictionless way to get fiat currency on to an exchange and back out again. So, exchanges that want to get ahead of the competition need to focus on a fast, smooth motion from fiat to crypto and crypto to fiat.

How can a crypto exchange help make the transaction seamless?

Learn from the best global eCommerce merchants who offer local currency pairs and allow shoppers to make the purchase in real-time.

Shoppers are more likely to become buyers when products and services are offered in their local fiat currency. This is because, when users see the price in their local currency, they can easily see the value and become keen to invest. So, give them the comfort of being able to deposit or withdraw in their local currency. This also has the added benefit of improving authorization approval rates and eliminating hefty foreign exchange fees charged by the cardholder’s bank.

The real-time nature of credit and debit cards are a major reason why they’re the trusted, convenient payment methods for the masses. They also have the added benefit of taking less than a second for approval. Users no longer need to wait for a bank transfer to clear to make an investment decision, they can click to buy and get into their investment position instantly.

How can a crypto exchange maximize this local offering?

Find a trusted payments partner that not only has local currency support, a wide offering of local payment methods and robust fraud filters, but also a level of experience that enables you to customize your local offering in a way that’s most appropriate for you, so you can achieve the maximum benefit.

What payment methods should be offered?

A fiat exchange that’s offering local currency pairs will also want to think about what payment methods could put it ahead of the competition. You would certainly want to provide trusted methods, such as card payments, so transactions can be made with added convenience.

Currently, bank wires are the most common method for deposits and withdrawals (85% and 87% respectively1). Offering a real-time off-ramp such as VISA Direct could make you an even more attractive prospect. But you might not want to stop there. Focus on offering any local payment methods that could be a source of competitive advantage. At the same time, and with the appropriate controls, implement the strategies that maximize approval rates and minimize costs and be aware of the positive difference that a great customer service experience can bring.

Where could seamless fiat on and off-ramps be particularly appealing?

Effective on and off-ramps are key for crypto exchanges to grow on a global scale and the local currency pairings giving you access to your target markets. Combine this with the right services for a specific market and the world is your oyster. As a user, when you get the ability to send money to someone on the other side of the planet securely, cheaply and quickly, it can make a huge difference. It’s why crypto adoption among foreign workers worldwide is high and growing. Crypto is used to remit money back home, where it needs to be converted back to fiat. So, exchanges with a robust fiat off-ramp offering would do well to consider developing markets that are providing the world’s foreign labor.