Crypto transaction success rate hinges on user location: Report

The crypto community is continually looking for ways to bridge the gap between traditional finance (TradFi) and fiat currencies with decentralized financial (DeFi) tools. Crypto onramp platforms are a primary way users are able to cross between these two financial ecosystems. 

However, a new report from Cointelegraph Research and Onramper, a crypto-based financial services provider, revealed that 50% of fiat-crypto transactions fail, even after KYC completion.

Moreover, due to difficulties in the transaction process, transaction abandonment during the purchase flow can be as high as 90%.

The survey looked at 9 of the largest fiat-crypto onramps including Coinify, Moonpay, Transak and Wyre, among others. 

According to the data, the performance of various onramps widely differs, though one of the main factors includes user location. Europe had the highest success rates in transactions, while the lowest are found in Africa and South America.

Other factors that affected transactions on crypto onramps include payment methods, types of fiat-crypto being used and available trading pairs. Bank transfers as a payment method were proven as superior in terms of success rates in transactions, achieving 100% or nearly success in two instances.

Related: Credit cards can bridge Web2 to Web3, says music industry exec

Additionally, transaction value was a major indicator of success with smaller transactions worth $0-26 achieving a 66% authorization rate, compared to transactions with values more than $5000, which typically have an authorization rate of 19%.

The research concluded that potential solutions to transaction authorization issues could be for token service providers to offer as wide a range as possible of aggregated onramps in a single interface. As well as dynamically routing transactions to give users the best option for their specific situations.

Recently, at the Davos World Economic Forum, Tether chief technology officer Paolo Ardoino called the platform’s stablecoin Tether (USDT) an onramp for Bitcoin (BTC). 

The Hong Kong Monetary Authority also called its upcoming retail CBDC as a potential onramp into the DeFi space.

Source: Read Full Article