Voice of the Industry

All you need to know about crypto payments in 2022-2023

Thursday 27 October 2022 08:50 CET | Editor: Raluca Ochiana | Voice of the industry

‘The decentralised ledger underlying Bitcoin was a fundamentally new kind of network—like the Internet—with possibilities that still hadn’t been dreamed up’, Andreessen Horowitz, a venture capital firm in Silicon Valley, California, that backs bold entrepreneurs building the future through technology.


To reach the undreamed possibilities of Bitcoin, crypto, and blockchains in general, we wanted to understand the space better and find out what drives the huge amount of ongoing payments technology innovation happening away from areas where crypto is seen as primarily a speculative digital asset. Moreover, to grasp the opportunities and hurdles that lie ahead for crypto adoption as a payment method, we conducted our first-ever ‘crypto for payments’ survey from June to September 2022. Also, based on extended research we tried to map out the crypto companies that build the new ‘crypto infrastructure and products’ to help you, the reader, understand the main players in this space.

And we included all in The Paypers’ upcoming crypto payments report, to be out in November. This article aims to grasp ‘the why’ behind the work done around our crypto report.

If you would like to receive a copy of the How to tap into Crypto Payments and Web 3.0 for Banks, Merchants, and PSPs Report from The Paypers, you can express your interest here.

The crypto wave

Since the nascence of Bitcoin in 2008, the crypto industry has been on an ascensional trajectory, despite the bumpy journey that cryptocurrencies have been enjoying so far. Over 300 million people across the globe, no matter what age and background, have heard of Bitcoin and cryptocurrencies and are transacting it. People have seen ads about crypto on YouTube, television, online newspapers, during Super Bowl, etc. Famous people (Cameron and Tyler Winklevoss, investors in the privately-owned Gemini exchange) and large regulated financial institutions (JP Morgan Chase, PayPal, Goldman Sachs, BNY Mellon) actively exploring this space have also spurred crypto's visibility.

Research done by Deloitte in collaboration with PayPal shows that merchants believe many of their customers currently have a significant interest in using digital currencies for payments. Moreover, they are convinced that customer interest will increase in time, and nearly 75% reported plans to accept stablecoin payments, and almost the same reported plans to accept cryptocurrency payments, both by 2024. A refinement of regulations around crypto has also triggered huge interest in this space. If a few years ago the industry players were complaining because it lacks, things are slowly evolving and the regulatory landscape for cryptocurrency has become very dynamic, both within national jurisdictions as well as at a global level (if you think of IMF and BIS active involvement).

The benefits of crypto payments

The new ‘crypto infrastructure and products’ that the cryptocurrency sector proposes, enable people and businesses to perform transactions directly with each other, without needing institutions to act as intermediaries. By ‘crypto infrastructure and products’ we meant base tokens and their infrastructures (stablecoins, bitcoin, Ethereum, Ripple, etc.) and services such as exchanges, payments, lending, borrowing, and insurance.

These are also known as the DeFi – decentralised finance. DeFi can potentially reduce costs and increase speed in payments by eliminating friction in terms of technology, contracting, and coordination between multiple parties. According to Douwe Lycklama, INNOPAY co-founder, ‘this is expected to impact many functions of today’s payment and securities market infrastructures, such as clearing houses, RTGS, secure messaging, custody, exchanges, and FX services. Digital assets enable companies to make their idle cash work for them. It is also possible to obtain yield by depositing into decentralised lending pools such as Aave and Compound’.

INNOPAY/The Paypers Payments Industry Crypto Monitor 

To understand how far crypto has developed in the payments industry, during the summer, INNOPAY and The Paypers surveyed banks, payment institutions, vendors, merchants, and AP / AR departments to gauge their interest in crypto infrastructure, tokens, and services. Not surprisingly, the first edition of our Payment Industry Crypto Monitor has revealed that 88% of the respondents expect crypto to have an impact on the current payment infrastructure, which is why some are already ‘testing the water’. Many of the respondents see various crypto-related opportunities and are keen to pursue them but are still very much at the exploratory stage: reading and researching the crypto opportunities (53%), talking with customers (43%), or preparing decision-making for usage or going to market (26%).

To sum it up

The technology stack behind crypto payments does not merely have the potential to change the way people pay but to reinvent the very dynamics of the digital economy. This is caused by the fast pace of new regulations changing (countries banning and then quickly adopting crypto – e.g. Russia) and technology evolving (e.g. the Ethereum merge).

As we can notice, there are both means and ways to get to the perfect payment experience. For this new digital era to bring meaningful changes and improvements to our societies and environment we need strong regulatory frameworks – which is in progress – as well as an informed and educated community of businesses and consumers with the knowledge and power to shape this space. We are confident the How to tap into Crypto Payments and Web 3.0 for Banks, Merchants, and PSPs Report provides the foundations for that vital knowledge.

If you would like to receive a copy of the How to tap into Crypto Payments and Web 3.0 for Banks, Merchants, and PSPs Report, you can express your interest here.

About Mirela Ciobanu

Mirela Ciobanu is a Lead Editor of the Banking and Fintech domain at The Paypers. She is actively involved in drafting industry reports, carrying out interviews, and writing about the digital assets industry, the regtech space, digital identity, fraud prevention, and payment innovation. Mirela is passionate about finding the latest news on crypto, blockchain, DeFi, and fincrime investigations and is an advocate of the need to keep our online data/presence protected. As a writer, she aims to always get the best obtainable version of the truth. She can be reached at mirelac@thepaypers.com or via LinkedIn.

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Keywords: cryptocurrency, cryptocurrency payments, merchants, banks, blockchain, Web 3.0, DeFi, Bitcoin, Token, digital assets
Categories: DeFi & Crypto & Web3
Countries: World
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