1 / bridging fiat & crypto: a quick thread on payment gateways like @sendwyre @MoonPayHQ @SimplexCC @XanpoolOfficial

2 / Payment Gateway solutions typically solve two problems:

1. For users - they provide onramps, get crypto via credit card, bank or other payment platforms

2. For platforms (e.g., exchanges, dapps)- they often act as a compliance solution and outsource payment integrations

3 / The "stripe for crypto" model makes sense.

A major adoption hurdle is buying your first crypto. If you can do this with a credit card or payment app - friction goes down severely. It can be $$ for startups to build themselves.

4 / This business of payment processing is already massive (~$63B) but incumbents aren’t bought into the crypto market, and therefore not addressing it.

5/ On the surface it feels like a “today” problem that may be taken care of by incumbents & large brands in the future. To this end, it comes down to product differentiation & execution

6/ A few factors that I think will create market differentiation:

- Geographical coverage
- Ease of use
- Brand awareness

7/ Product expansion will also be interesting.

What happens when it reverses: fintech & traditional finance want easy onboarding to crypto?

how can you expand for the entire user onboarding experience?

8 / It's a use case that is exemplary of a larger trend.

crypto creating solutions for crypto problems because they aren't served by the larger market.

the dynamics will be interesting when crypto markets 10x - who has the advantage? incumbent scale or crypto expertise?

9 / Lastly, a few other open questions about the market:

- Will payment gateways remain a 3rd party service or b
become an in-house platform requirement?
- Is there an opportunity to move into the identity space?
- How sticky are these products (for users & platforms)?