Nov 2, 2022 - Economy's payments gambit blurs fintech and crypto

Photo illustration of Jess Houlgrave with abstract shapes.

Jess Houlgrave,'s head of crypto strategy. Photo illustration: Gabriella Turrisi/Axios. Photo: Louise Yeowart

Payments shops' deep embrace of crypto is a sign of things to come that the average person might never notice.

Why it matters: Mainstream crypto adoption is often talked about in terms of the masses transacting in bitcoin for everyday purchases. But what if crypto makes its way into backend payment processing that everyone uses, but doesn't spend much time thinking about?

Context: Behind every e-commerce transaction is a payments shop like

  • They make sure people who sell stuff get paid by the people who buy stuff — the invisible hand that enables online shopping, among other things.
  • What's important, the company's head of crypto strategy, Jess Houlgrave, tells Axios, "is to keep up with innovation" of the businesses they serve, whether it's for now or for what's coming next.

Between the lines: The line between fintech and crypto starts to blur in payments.

  • While transaction volume for the UK-based fintech is dominated by regular, non-crypto e-commerce activity servicing fast-fashion online retailers like Shein, Checkout also counts 12 of the 15 largest crypto exchanges as customers, Houlgrave says.
  • It has settled roughly a billion dollars in stablecoin transactions since that feature launched in June, according to Houlgrave.

The big picture: Houlgrave doesn't think legacy payments infrastructure will be made obsolete by crypto rails. Rather: "We'll see these two payment systems converging."

Zoom in: The most crucial factor for crypto compared to legacy fiat payment processing is availability, says Houlgrave.

  • Settling stablecoin payments for exchanges requires 24/7 service; on banking rails, it's 9-5 on weekdays, minus holidays.

Of note: settles the stablecoin USD Coin, to be specific.

  • "We built this feature because it was in demand from the market," Houlgrave says. "The desire to be settled in stablecoin was an ask from the industry."
  • Demand from customers also explains "why USDC?"

State of play: Checkout's competition in payments has also taken the crypto plunge. Stripe and PayPal launched their respective crypto services this year, in spite of the crypto winter and broader economic gloom.

The intrigue: Fortune's Jeff John Roberts contends that payments is the real reason Elon Musk bought Twitter, citing his longstanding ambition to disintermediate ACH, the electronic bank-to-bank payment system.

What's next: A payout feature.

  • "Today my options are limited to a bank transfer, which could take days and maybe becomes $80 [after fees]," Houlgrave says, describing how payouts could enable businesses to compensate workers in crypto and reduce associated transaction processing costs.
  • "Imagine a world where you can do it with a stablecoin. Instantly, in my wallet is not $100, but maybe $99.50."

The bottom line: "The holy grail for payments — take crypto out of it — as soon as the transaction goes through, that money is in my account."

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