Almost everyone has likely encountered problems with fintech payment processors — issues like frozen accounts, high hidden fees, and fraud. In 2020, the Federal Trade Commission reported that 16.6% of fraud reports involved a payment app or service such as Paypal.

Recently, Paypal made changes to its terms of service that allowed for a US$2,500 deduction from a user’s account for posting information deemed as ‘misinformation’ by the company.

This decision faced backlash on Twitter with the #DeletePayPal hashtag, only for Paypal to later add it back to their terms of service after the criticisms subsided.

Imagine having your savings deducted for something the company finds ‘offensive.’ Or worse, losing access to your entire savings without explanation, as was the case with Monzo freezing accounts without warning in 2020.

These incidents highlight the power that fintech payment processors have to restrict access to your funds and suggest a shift in attitudes against them.

Financial censorship poses a threat to the open society, and there is a need for better alternatives that allow individuals to control their own finances.

A new era in fintech payments

As many businesses reconsider their accounts with fintech payment processors like PayPal, there is a growing interest in a new type of payment fintech: crypto payment apps.

Crypto payments enable cross-border transactions without the need for costly and time-consuming bank transfers. Unlike traditional processors, cryptocurrencies offer a direct P2P payment system, making transactions faster and more affordable, particularly for international businesses.

Additionally, the rise of stablecoins has made crypto payments more popular, with USD-denominated stablecoins accounting for a significant portion of crypto payments in September 2022 according to Request Finance.

Businesses are attracted to stablecoins due to their price stability, offering access to DeFi platforms like AAVE that provide higher returns compared to traditional bank deposits.

With full control over private keys and cryptocurrencies, businesses find crypto payment apps to be a superior option.

Safeguarding crypto for enterprises

While crypto payments offer numerous benefits, there is a lack of consumer protection against invoice fraud or sending money to the wrong wallet. Invoice fraud accounts for a significant portion of funds that small businesses lose to scammers, as reported by Barclays.

To combat this, tools like Request Finance offer features to prevent invoice fraud in crypto transactions. Their “Invoice Me” feature allows enterprises to send contractors QR codes or links pre-filled with business information to create invoices easily and securely.

As businesses explore the world of crypto payments, platforms like Request Finance can help ensure a safe and smooth transition.

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This article was first published on November 8, 2022

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