Polygon, the internet protocol and framework for building and connecting Ethereum-compatible blockchain networks, has partnered with payment gateway solution Alchemy Pay.
Alchemy Pay will create a bridge between fiat and crypto payments by embedding into the Polygon Network, enabling any Polygon-based protocol to set up a fiat on-ramp. The new capability is expected to propel the next phase of growth for Polygon’s DeFi ecosystem.
More than 4,000 hosted dApps within Polygon’s DeFi and broader dApp ecosystem will now be able to enact transactions via direct fiat on-ramps to traditional financial payment platforms like Visa, Mastercard, PayPal, and multiple local payment channels around the world.
The move will also simplify DeFi app payments on e-commerce platforms, such as Shopify and other networks. Alchemy Pay currently handles $5 million daily transactions, primarily from Asia and Europe.
A greater volume of US transactions is expected after Shopify completes integration with Polygon by the end of this year.
Sandeep Nailwal, co-founder of Polygon – which recently acquired the Hermez network – explained that DeFi protocols have been flourishing, but challenges with Ethereum’s usability at a global scale have slowed development.
“Scaling solutions are vital to DeFi’s ability to go mainstream. Polygon is already solving the problem of Ethereum’s slow and costly transactions, and now thanks to Alchemy Pay, we can provide an essential gateway between fiat and crypto transactions,” he said.
“This development opens up new capital inroads that will propel users of polygon’s DeFi ecosystem onto the next level in their commercial development.”
Number of Polygon daily users surpassed Ethereum’s
Polygon’s full-stack scaling solution has the potential to lead the way in reducing congestion on the Ethereum mainchain.
In September, the number of daily active users on Polygon regularly surpassed those on Ethereum.
Rather than being a competitor to Ethereum, however, Polygon facilitates the use of platforms on the Ethereum network.
Still, DeFi advocates recognise that Ethereum also needs to find more ways to accept fiat into the ecosystem. The network’s ability to handle transactions between fiat and cryptocurrencies will be crucial for attracting new users.
The CEO of Alchemy Pay John Tan commented that this integration of fiat payment options is key to the goal of a frictionless payment experience on crypto networks.
“It will reduce the tendency of users to hold tokens long term, and make it more appealing to use them within decentralised apps,” he noted.
“This, in turn, will appeal to developers who want to build dApps that people can actually use. Both Polygon and Alchemy Pay enable people to use blockchain apps and DeFi platforms rather than just speculate on the tokens.”
Kanani also added that “with the hybrid crypto-fiat support of Alchemy Pay, Polygon now will have a much broader scope for development as well as a stronger appeal for adoption”.
He said: “By empowering Polygon and Ethereum with more seamless and flexible fiat-crypto payment channels, Alchemy Pay is supporting the DeFi sector at a fundamental level.”
Polygon and Alchemy Pay are also part of a newly-forming Blockchain Infrastructure Alliance (BIA) of industry infrastructure builders and leaders.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.