How Processors Are Turning to Stablecoins for Internal and Seller Funding

The speed and apparent lower cost of stablecoins—coupled with the digital currency’s rising prominence as a payments method—has captured the imagination of payments companies. Now some are leveraging the coins for both internal and merchant funding.

Shift4 Payments Inc. said early Monday it has launched a facility for stablecoin settlement that can reach merchants globally at a quicker pace than conventional settlement and without the limitations of banking hours.

The new service, which the major Center Valley, Pa.-based processor says can reach “hundreds of thousands” of merchants, offers a menu of stablecoins, including USDC, USDT, EURC, and DAI. Merchants can opt for these coins in preference to a conventional bank settlement, while Shift4 says it is offering a choice of networks, including Ethereum, Solana, Plasma, Stellar, Polygon, TON, and Base.

Information was not immediately available regarding how the cost to the merchant for this new service will be determined or how it may compare with settlement in fiat currency. Cryptocurrency is widely seen as less costly and faster than conventional fiat transfers. That is likely to matter to Shift4’s merchants, some of which are based in Europe and elsewhere outside the U.S. market. Deals are also extending Shift4’s reach. Indeed, the company this fall paid $2.5 billion to acquire Global Blue, a Swiss processor catering to high-end merchants. In June, it agreed to acquire New Zealand-based SmartPay Holdings Ltd. for $180 million.

“As Shift4 becomes an increasingly global company, this offering will support businesses around the world as stablecoins continue to play a growing role in the modern payments ecosystem,” notes Pietro Moran, Shift4’s director of crypto, in a statement. The company, which holds a strong position in hospitality and stadium payments, saw its revenue surge 61% year-over-year in its latest quarter, to $589.2 million.

Meanwhile, Klarna AB, a buy now, pay later processor based in Stockholm but with major U.S. operations, is looking at stablecoins for internal funding, the company said Friday. It said it will work with the crypto platform Coinbase Global Inc. and its USDC coin for funding that normally involves consumer deposits, loans, and commercial paper. “Stablecoin connects us to an entirely new class of institutional investors, and gives us the potential to diversify our funding sources in ways that simply weren’t possible a few years ago,” said Niclas Neglen, Klarna’s chief financial officer, in a statement.

This company said this new venture comes on top of stablecoin initiatives it has already started for consumer payments and merchant settlement.