What is a Crypto Onramp and How to Build an In-House OnRamp?

Today, there’s a notable trend among individuals and businesses to engage with digital assets. It creates the need for efficient fiat-to-crypto onramps. This article explains what a crypto onramp is and how to create a robust in-house onramp solution for business.
What is Fiat to Crypto Onramp and Why Do Financial Companies Build It?
A fiat-to-crypto onramp is a service that allows users to convert traditional fiat currency (such as USD, EUR, or GBP) into cryptocurrencies. This process is essential for anyone wanting to invest in or use cryptocurrencies. Ramp-buy crypto services make cryptocurrencies accessible to the general public. Financial companies often prefer to build onramps in-house rather than relying on third-party solutions. Here are some reasons why:
- Cost efficiency. Utilising third-party onramp services can be costly due to transaction fees and service charges.
- Risk management. In-house onramps allow companies to have full control over their security measures, minimising the risks associated with external service providers.
- Customisation. Developing an in-house onramp allows financial institutions to tailor the system to their specific needs.
- Compliance and control. Managing compliance with regulatory requirements is easier with an in-house solution.
How to Build a Crypto Onramp?
The process of offering crypto onramps involves several key steps:
- Integrating KYC (know-your-customer) procedures is the first step in building a crypto onramp. This process involves verifying the identity of users to prevent fraudulent activities and ensure compliance with regulatory standards. KYC checks typically require users to provide identification documents and personal information.
- Anti-money laundering (AML) is crucial for any financial service, including crypto onramps. Financial institutions must implement measures to detect and report suspicious activities that could be linked to money laundering.
- To protect both the institution and its users, it’s essential to establish strong anti-fraud and risk management protocols. This includes real-time transaction monitoring, behavioural analytics, and the implementation of fraud detection algorithms.
- Transferring funds is a critical aspect of the crypto onramp process. This step involves moving fiat currency from a user’s bank account into the platform, where it is then used to purchase cryptocurrency. Users deposit fiat through bank transfers, credit/debit cards, or other payment methods. These funds are held temporarily while the transaction is processed and verified. Then transactions are assessed for compliance and fraud risk. Suspicious transactions are held or declined. Once fiat currency is converted into crypto, users can withdraw their digital assets to their crypto wallets.
- The final step is transferring the purchased crypto to the user’s wallet. This transfer must be secure and efficient, ensuring that users can access their digital assets promptly.
Having an in-house onramp is increasingly beneficial for financial organisations looking to stay competitive and compliant in this dynamic market.