How a payment through a crypto PSP works
The merchant creates a payment through the PSP's API or plugin. The checkout shows an amount in the chosen asset, a network, and a deposit address or QR code, with the exchange rate held for a few minutes.
The customer pays from a wallet. The PSP watches the blockchain, matches the incoming transfer to the order, waits for confirmations and tells the merchant that the order is paid. It then converts the crypto-assets if the merchant wants money, and pays out to a bank account or a wallet, net of its fee.
What a crypto PSP takes on
- Price risk between payment and conversion
- Underpayments, overpayments and payments on the wrong network
- Refunds, which need a new transfer, since a blockchain payment cannot be reversed
- Screening of incoming funds, and Travel Rule data where another provider sends them
- Merchant onboarding and monitoring, as for any PSP
How a crypto PSP is regulated in the EU
Crypto PSP is a market term. Under MiCA the work breaks down into crypto-asset services, typically the exchange of crypto-assets for funds, transfer services and custody, which only a crypto-asset service provider may offer.
Paying merchants out in money is a payment service. Article 70 of MiCA lets the provider offer it itself or through a third party, as long as whichever does so is authorised under PSD2.
Crypto PSP, on-ramp or card PSP?
- Crypto on-ramp
- Sells crypto-assets to a consumer. A crypto PSP collects them from a consumer on a merchant's behalf.
- Card PSP
- Moves card payments through schemes and acquirers, with chargebacks. A crypto payment settles on a blockchain and is final.
Where a crypto PSP shows up in a platform
Modules that do the work
- CheckoutA hosted checkout for cards, wallets, bank payments and crypto, routed to the best provider.
- Custody & walletsWallets on every major chain, with MPC custody from leading providers or your own keys.
- FXCurrency conversion with live rates, your margins and the liquidity provider you choose.
- Merchant onboardingBusiness sign-up, verification and underwriting, from application to first payment.
Platforms that need it
Guides that go deeper
- Stablecoin payments for EU merchants: MiCA, USDC and the Travel RuleWhat a stablecoin checkout for EU merchants needs: MiCA and payment licences, why USDC and not USDT, Travel Rule checks on self-hosted wallets, euro settlement and refunds.
- How to become a PSP or a payment facilitatorGateway, acquirer, payment facilitator or payment institution: where the licence line falls, how the card schemes register payment facilitators, what merchant KYB demands, and the UK and UAE rules.
Where it is written
The laws and standards this page's facts come from.
General information, not legal advice: what applies to you depends on your services and your market.