Onboarding the World: How C14 is Democratizing Access to Crypto
For Web3 to succeed, users around the world will need the ability to easily move between local fiat currencies and on-chain crypto assets. Unfortunately, the fiat on-ramps and off-ramps that exist today are expensive, difficult for normal people to use, and only provide coverage for a small fraction of potential users around the world.
At C14, we believe Web3 has the power to help people around the world reach financial security and independence. That’s why we’re on a mission to democratize access to crypto and help people everywhere seamlessly move in and out of digital assets with the ease and familiarity of a typical e-commerce transaction.
Read on to learn the history of fiat on-ramps and off-ramps and how C14 is working to help democratize access to crypto for global markets.
A Brief History of Fiat-to-Crypto Ramps
For many years after the inception of Bitcoin, crypto was effectively blocked from the traditional financial system. Even for tech-savvy crypto enthusiasts, it was still burdensome and risky to purchase and custody crypto assets.
Services like Local Bitcoins and early exchanges like provided the first versions of fiat-to-crypto on-ramps. However, while Local Bitcoins is still around and functioning today, most readers will already know that Mt.Gox didn’t turn out so well.
Over the years, newer and more robust central exchanges like and have popped up to provide easy on-ramping into a variety of crypto assets. However, even the most trusted central exchanges still carry notable risks for users who trust them to custody their crypto assets and fiat funds.
Firstly, central exchanges only offer meaningful coverage for a fraction of global users. Secondly, these exchanges often charge exorbitant fees and provide access to only a tiny fraction of total crypto assets (typically after the assets have already experienced major price appreciation). And lastly, if you custody your crypto assets with a central exchange, you may lose the entirety of your assets if that exchange fails and can no longer repay the assets you “own”. The custody risk might seem minimal during a bull market, but as we’ve seen with large entities like , your access to crypto assets on centralized exchanges can be revoked at any time according to many of these exchanges’ user agreements.
Outside of central exchanges, new direct fiat-to-crypto ramp services have emerged over the years to provide users with direct fiat-to-crypto transactions. When done right — like with our fiat-to-crypto ramps :) — direct ramps allow users to access a wider variety of assets, avoid exorbitant transaction fees, and bypass the custody risk associated with storing your crypto in central exchange accounts.
However, many of these direct ramps (ie. the ones that aren’t C14) provide a service that is often even less favorable than even central exchanges.
Fiat On-Ramps and Off-Ramps Today
If you live in the United States and your only goal is to buy bitcoin and custody it on a central exchange — congratulations! You can probably do this without much hassle. But even this simple goal can be technically prohibitive depending on what part of the world you live in.
For crypto to succeed, we need ramps to be affordable, user-friendly, and available to the vast majority of users around the world. Unfortunately, the fiat on-ramps and off-ramps that exist today are less than ideal for global consumers.
Expensive Third-Party Ramps
Providing effective fiat on-ramp and off-ramps certainly isn’t free — so charging a small transaction fee is completely understandable as a way to keep the ramp service operating. In fact, that’s exactly what we do at C14 (albeit a fair and reasonably small fee relative to most of our competitors).
Users are accustomed to paying for services that make their lives easier. However, many current ramps provide a sub-par product and user experience while at the same time charging exorbitant transaction fees in addition to massive mark-ups to the market price of listed assets.
We believe that a reasonable and fair transaction fee is better for both ramp users and the health of ramp businesses long-term, as trust and user satisfaction are of far greater value than gouging the consumers who trust us with their transactions. That’s why we incorporate fair pricing into all of our ramps at C14.
Poor User Experience
Let’s say you get lunch with your favorite crypto-obsessed friend, and they turn you on to a new coin that has the potential to revolutionize finance. You do the research, understand the risks, and you’re convinced that buying a few hundred dollars worth of the coin today is a great move for your financial future. Unfortunately, you’re a crypto noob and have no idea how to trade on-chain.
So…
You go to the project’s website, see that you can buy through a third-party ramp integration, and attempt to use this seemingly helpful payments tool. However, when you click the button, you’re redirected to a different site with a brand you don’t recognize. You’re asked to trust this new brand and complete a burdensome know-your-customer (KYC) process that includes manual review of personal documents.
Most people will look through the KYC flow, feel skeptical about providing personal information, give up and decide that maybe crypto isn’t for them. But for the few retail buyers that make it through the KYC phase, more frustration awaits.
Often, transactions on these ramps will fail for no apparent reason. The ramp provider will offer no explanation, and the project whose token you’re buying will be no help as well — because they don’t run the ramp and can’t get in touch with the ramp provider either!
In contrast, C14 offers an embedded payment ramp with no third-party branding or website redirects, a streamlined KYC process that can be completed in minutes (not days), and proactive user guidance to help prevent failed transactions from happening in the first place. And unlike many ramp providers, we actually communicate with our partners to ensure ramp users can easily transact with any of our listed assets.
Poor Coverage for Global Markets
While many ramp providers claim to provide coverage for users around the world, the reality is this: most global users lack easy tools to move in and out of digital assets.
This is partly due to central exchanges and ramp services not having any level of coverage for much of the world. But the more subtle issue is that even when “coverage” is provided, the most adopted payment options in these regions aren’t supported.
For people in the U.S. and Europe, payment options are pretty straightforward and available. Often, users in these areas can use common payment methods like credit/debit cards or bank transfers. However, providing credit/debit card coverage for areas where card adoption is low provides no meaningful coverage to these areas.
More on this later — but for now, know that C14 is working to add meaningful coverage for global users by integrating the most adopted payment methods in emerging and underserved markets around the world.
The Role of Regulation in Crypto Payment Ramps
Contrary to what some people might think, the burden of building fiat-to-crypto on-ramps and off-ramps is less about technical hurdles and more about navigating the uncertainty of regulations in various jurisdictions.
In some countries, there are clear rules as to what licenses and frameworks are required to provide ramp infrastructure. In other places, there are existing laws and regulations but they offer an unclear picture of what exactly is needed to operate a compliant ramp. And in much of the world, it’s difficult to say what compliance even is given the lack of legal guidelines.
While the regulatory landscape today is often vague and open to interpretation, the overall trend is toward clear guidelines for much of the world. So while regulatory conditions are difficult today (to say the least), we at C14 are encouraged that the world is at least moving toward a state where most countries have coherent regulations and definitions for crypto and money transfer.
We will continue to work within the most up-to-date regulatory frameworks to build out C14’s ramp infrastructure and provide meaningful coverage to users around the world. Which brings us to the most important takeaway from this post…
C14 and the Future of Fiat-to-Crypto Ramps
By now it should be clear that there’s real room for improvement when it comes to the fiat on-ramps and off-ramps that exist today. Users need to be able to move in and out of digital assets with the ease of a typical e-commerce transaction; and ramp coverage needs to include native payment methods that users in each market actually use.
So that’s what we’re doing at C14 — building something better.
To truly build the next-generation of fiat-to-crypto payment flow for global users, we’re rethinking how a ramp should function in terms of both product and coverage.
The Product: C14 Ramp Widget
On the product side, we believe the best way to support our partners is to create an embeddable widget that allows users to transact directly on partner project websites and dApps. This empowers users in a partnered blockchain ecosystem to freely transact with the C14 widget wherever it might be embedded. Once a user completes the KYC process with C14, they can easily log into their account, store payment methods and seamlessly complete transactions on any project that hosts the C14 widget.
For users, this makes fiat-to-crypto transactions as seamless as a typical e-commerce transaction today. And for blockchain partners, this creates a powerful incentive for third-party developers to build projects on C14-partnered chains compared to ecosystems that lack an easy and embeddable fiat-to-crypto payment gateway.
The Plan: C14 Coverage Roadmap
On the coverage side, we’re focused on adding meaningful coverage for established markets as well as emerging and underserved markets around the world.
In markets where card adoption is high, we’ll allow users to transact with credit/debit cards and bank transfer where applicable. In this sense, our coverage for established markets like the U.S. won’t look too much different than other ramp providers. But unlike other ramps, we won’t offer cards as the only payment option in markets where card adoption is relatively low or non-existent.
You might be surprised to learn that card adoption is relatively low in most of the world. In fact, there are only 20 countries in the world where >50% of the population has a credit card. This means that offering users in these markets the ability to pay via card is essentially akin to providing no coverage at all. Unfortunately, this is the coverage offered by most ramp providers today.
While meaningful ramp coverage is lacking for much of the world, the places that lack coverage are actually some of the places that need easy access to crypto the most. Government instability and currency inflation are common problems for many Countries around the world — and easy access to crypto can help provide a financial safe haven for their citizens.
Interestingly enough, payments infrastructure is actually far more advanced in many emerging markets compared to areas with high card adoption. For example, Kenya has a robust mobile money system that provides easy banking to millions of people who would not have access to banking otherwise. And service providers like in Brazil represent a new generation of payment infrastructure that looks very different from how payments are done in the West.
Instead of modeling our payment options on the traditional infrastructure we (as U.S. citizens are used to), we’re looking at each jurisdiction worldwide and integrating payment options that make the most sense based on rates of adoption. In this way, we believe C14 can help democratize access to crypto, and help users around the world easily move in and out of digital assets with the ease and familiarity of a typical e-commerce transaction!
If you made it this far, thank you. We appreciate you taking the time to learn about global crypto payments infrastructure and how C14 is working to democratize crypto access for users around the world.
By now, you understand our mission and what we’re building. So the only question left is…
How can we help?
If you’re a blockchain foundation or web3 project looking to offer seamless fiat-to-crypto payment flow to your users (wherever they may be), let’s connect and see how C14 can help.
Use the links below to contact C14 and start a conversation today!
Originally published at https://www.c14.money on July 26, 2022.
