December 4, 2023

Crypto off-ramping vs Third-Party payments

A new way of employing businesses' assets to cover payments, expenses, payroll, and much more securely and efficiently.

Many companies are currently diversifying their asset portfolio to ensure liquidity and easy access to execute payments to suppliers, service providers, and even employees.
However, using tokens to pay salaries, acquire services, or purchase real-world assets (RWA) in Fiat often proves to be tricky.

In a crypto off-ramping situation, where companies desire to convert their digital assets into fiat currency to execute payments seamlessly, the typical journey for a Web3 business usually goes like this:

  1. Access the fund exchange or off-ramping partner's wallet
  2. Swap Crypto for Fiat (e.g., USDC to USD)
  3. Request the withdrawal
  4. Wait for the credit in their own bank account
  5. Respond to the bank's request for additional information about the funds
  6. Receive the bank funds in the user's account
  7. Employ the funds to pay salaries and acquire services or RWA (real-world assets)

Undoubtedly, this process is a logistical nightmare - far from streamlined and a significant source of stress for treasury managers.

Companies have searched for new solutions to solve this problem and make these procedures smoother and more user-friendly. Finally, there is a viable alternative to the difficult path we previously presented: third-party payments.

What are third-party payments?

Third-party payments are a novel approach that allows users to receive and send payments without setting up a bank account.

Businesses and High Net-Worth Individuals can leverage third-party payment intermediaries to facilitate both recurring and one-time payments to access a set of services, products, and real-world assets.

Its main advantages include the following:

  1. Fewer costs

For small and medium businesses, having a third-party payment provider might help reduce expenses, as bank accounts usually charge monthly service fees. As for third-party solutions, the vast majority don't charge onboarding or ongoing fees, as their business model is based on transaction fees.

  1. Increased flexibility

Since there are no entrance fees nor loyalty contracts, businesses can decide when and if they want to use the service, as needs might change over time. Third-party payment platforms allow users to have control over their finances and only pay the corresponding fees as they perform the transactions.

  1. Worldwide payments

These online solutions allow for international payments while ensuring compliance with different countries' regulations and removing an extra layer of complexity regarding taxation.

  1. Easy sign-up

Third-party payment solutions usually have an easy sign-up process, with a KYC (Know your Customer) or KYB (Know your Business) friendly journey that takes only a few minutes, allowing businesses to use the payment service immediately.

  1. Safety of assets and transactions

By using third-party payment providers, businesses' assets are continuously being safeguarded by the latest decentralization and encryption technologies. These solutions ensure the security of transactions while preventing hacks, phishing attacks, and other security breaches.

Pioneering this realm is Skyline Digital's platform, which is one of the first global solutions allowing users to execute third-party payments in Fiat with Stablecoins.

How does it work?

Upon successfully navigating Skyline Digital's KYC or KYB process, the user just needs to follow these simple steps:

  1. Connect MetaMask or Safe wallet
  2. Add payments in Fiat (EUR, USD, GBP, CHF, SGD)
  3. Set withdrawal allowance
  4. Approve the quote
  5. Watch all payments being executed!

With Skyline Digital's platform, users can process Fiat payments without relying on a conventional bank account. Payments can be credited to nearly any bank account across the globe, spanning EUR, USD, GBP, SGD, and CHF.

Additionally, with one on-chain transaction, the user can execute multiple payments in Fiat, simplifying the treasury management effort and accounting reconciliation.

Comparing Crypto Off-Ramping vs Third-Party Payments

Crypto off-ramping has excellent advantages, such as competitive service fees and reduced KYC / KYB, making it easier to onboard. However, it often gets very complex and time-consuming due to its custodial nature, difficult treasury management, and account reconciliation. It also requires a bank account and usually charges for gas fees.

As for third-party payments, they tend to be more flexible and quicker, though there is one catch: fees are usually higher. Regardless, it pays off when using batch transactions or making regular payments.

Skyline Digital can help you transition to a simple transaction platform that will help you gain more freedom and control over your finances. Our non-custodial solution allows users to access simplified treasury management, get bank account independence, and easily reconcile accounting details while enjoying a no-onboarding and no-ongoing fees policy.

Get to know more about Skyline Digital here and join us today!

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