A Gateway Is a Payment Firm Wearing a Crypto Label
A crypto payment gateway collects payment from a customer, converts it, and settles fiat to a merchant. This flow makes it a payments business first and a crypto business second, and it is the payments half that determines how a bank underwrites it.
Banks ask directly: at what moment do the merchant’s funds become the merchant’s, and where do they sit until then? A gateway that cannot answer precisely has not shown whether it provides a payment service or under which authorisation, and the conversation ends there rather than moving to pricing.
Stablecoin flows add an EU question of their own. Where the gateway is a crypto-asset service provider that transfers e-money tokens on behalf of clients or provides custodial wallets allowing e-money token transfers to and from third parties, the EBA has advised national authorities to treat those services as payment services that, since its no-action transition period ended on , need PSD2 authorisation or a partnership with an authorised payment service provider; exchanging crypto-assets for funds is not treated as one.[6]
Two Clocks: Settlement and Volatility
Two timing risks run at once. Settlement timing is how long merchant funds sit before payout. Volatility timing is how long the gateway carries price exposure between customer payment and conversion. Banks weigh both, because together they decide whether the gateway can still pay its merchants in a bad week.
Gateways that convert instantly and settle daily present a clean file. Gateways that hold crypto positions to improve margin are running a trading book alongside a payments business, and institutions price them as the trading book. A gateway that has not decided which it is will be treated as the riskier one.
Four Tests Decide a Gateway File
Merchant onboarding. Merchant risk transfers upward. Institutions ask what verticals are accepted, how merchants are screened, and what happens when a merchant’s own activity turns out to be prohibited. Serving unlicensed gambling merchants means, from the bank’s position, serving unlicensed gambling.
Flow-through segregation. Where merchant funds sit in transit, whether they are pooled, and how per-merchant entitlement is reconstructed.
Chargeback exposure on the card leg. Where the gateway accepts cards to fund crypto purchases, Visa requires quasi-cash coding under MCC 6051 (6012 where the seller is a financial institution) and lists card-absent crypto merchants among its high-integrity-risk categories,[1] and the dispute risk sits with the gateway rather than the merchant. Scheme thresholds are unforgiving: Visa’s merchant Excessive threshold is 1.5% from in the AP, Canada, EU, and US regions (already 1.5% in LAC; 2.2% in CEMEA), using fraud and dispute counts divided by settled card-absent transactions, with a monthly floor of 1,500 fraud and dispute counts (CEMEA: 150 and USD 75,000).[2] Mastercard’s Excessive Chargeback Programme flags a merchant once a month’s chargebacks reach both 100 and 1.5% of the previous month’s sales, with a High Excessive tier at 300 and 3%.[3] These Visa merchant thresholds apply where the acquirer is neither Above Standard nor Excessive; Visa’s public fact sheet excludes Brazil, Chile, and India; their programmes are announced separately.
Analytics and Travel Rule. Live analytics coverage on the crypto leg, and transfer-information handling where the gateway is itself a crypto-asset service provider.[4]
Stack and Costs: The Funds-in-Transit Account Decides the File
| Layer | Institution | Difficulty | Timeline |
|---|---|---|---|
| Merchant settlement account | Bank or EMI with high per-item limits | Moderate to hard; volume-sensitive | 6–12 weeks |
| Client/merchant funds in transit | Credit institution, or another safeguarding method the applicable regime permits | Hard; turns on when the funds become the merchant’s | Varies by provider |
| Card acquiring (MCC 6051 or 6012) | Acquirer with quasi-cash appetite | Narrow panel; 3.5–8% charged to the gateway, rolling reserve 5–10% held 180 days | 4–12 weeks |
| Operating and treasury | Bank or EMI | Routine once licensed | 2–6 weeks |
Ranges are indicative across the partner network as of . Economics usually hinge on settlement speed rather than headline rate, because working capital tied up in transit is the largest recurring cost.
How Jagelski & Partners Helps
Gateway placement begins by settling the funds-in-transit question, because everything downstream depends on the answer. Where the gateway holds merchant money, the file is a payments file and the counterparty list is the payment-institution one covered on the EMI and payment institution banking page. Where it does not, the file is simpler and the list is wider.
The assessment then covers merchant onboarding policy, flow-through segregation and reconciliation, the card leg if one exists, and the conversion and settlement timing that determines how much working capital the arrangement consumes.
Frequently Asked Questions
A payments business first. The gateway collects from a customer, converts, and settles fiat to a merchant, so it holds third-party funds in transit. That moves it from “crypto company needing an account” to “firm holding third-party funds”, which in the EU can mean providing a regulated payment service under PSD2 unless an exclusion applies.[5]
Institutions therefore underwrite gateways more like payment institutions than like exchanges.
At what moment do the merchant’s funds become the merchant’s, and where do they sit until then. A gateway that cannot answer precisely has not shown whether it provides a payment service or under which authorisation, and the conversation ends rather than moving to pricing.
Everything downstream depends on the answer, including which institution list is even relevant.
Because a gateway that holds positions to improve margin is running a trading book alongside a payments business, and institutions price it as the trading book.
Gateways that convert instantly and settle daily present a clean file. A gateway that has not decided which it is will be treated as the riskier one by default.
Entirely. From the bank’s position, a gateway serving unlicensed gambling merchants is serving unlicensed gambling. Institutions ask which verticals are accepted, how merchants are screened, and what happens when a merchant’s activity turns out to be prohibited.
A permissive merchant policy can cost a banking relationship a gateway spent months building.
Under Visa rules, card-funded crypto purchases use quasi-cash coding: MCC 6051 for non-financial institutions or MCC 6012 for financial institutions. The dispute risk sits with the gateway rather than the merchant. The acquiring panel is narrow. Across the partner network as of June 2026, rates ran 3.5–8% with rolling reserves of 5–10% held for 180 days, moving with processing history.
Scheme thresholds are unforgiving: Visa’s merchant Excessive threshold is 1.5% from 1 April 2026 in the AP, Canada, EU, and US regions (already 1.5% in LAC; 2.2% in CEMEA). These Visa merchant thresholds apply where the acquirer is neither Above Standard nor Excessive; Visa’s public fact sheet excludes Brazil, Chile, and India; their programmes are announced separately. Monthly floors are 1,500 fraud-and-dispute events, or in CEMEA at least 150 events and USD 75,000.
Settlement speed rather than headline rate. Working capital tied up in funds in transit is usually the largest recurring cost, so a relationship that settles a day faster is worth more than a rate concession.
Per-item limits and cut-off times matter for the same reason.
Not necessarily. Where a safeguarding regime applies, it sets the permitted methods: PSD2 in the EU, for example, requires a payment institution providing services such as acquiring or money remittance to safeguard the funds it receives for payment transactions, either by segregating them or by covering them with an insurance policy or comparable guarantee.[5]
Where no regime applies, an institution may still ask where merchant funds sit in transit, whether they are pooled, and how per-merchant entitlement is reconstructed.
The funds-in-transit account, where a credit institution is required, varies in timing by provider and cannot be generalised. Merchant settlement accounts run 6 to 12 weeks, card acquiring 4 to 12 weeks, and operating accounts 2 to 6 weeks.
Sometimes, by settling directly from customer to merchant with the gateway acting only as a technical and conversion layer. Where that structure is genuine it materially simplifies the placement and widens the institution list.
Where it is asserted but the gateway does in fact control funds at any point, institutions find out, and the discovery costs the relationship rather than the application.
No. Jagelski & Partners is paid by the institution that takes the business, through a referral or revenue-share arrangement, not by a fee billed to the client. The pricing is the institutional rate, with no markup and no onboarding fee.
Ready to Settle the Funds-in-Transit Question Before Applying?
Book an assessment. We establish whether the gateway holds merchant money and therefore which institution list applies, then introduce an independent specialist to place settlement, transit, card, and treasury layers against counterparties whose appetite fits. No markup on institutional pricing. No onboarding fee.
References
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- Visa Inc., Visa Merchant Data Standards Manual (April 2026 edition), pp. 20–22: quasi-cash and cryptocurrency purchases coded MCC 6051 or 6012 with special condition indicator 7, and card-absent 6051 and 6012 crypto merchants among the high-integrity-risk MCCs, usa.visa.com, accessed .
- Visa Inc., Visa Acquirer Monitoring Programme (VAMP) Fact Sheet (2025); merchant Excessive threshold 150 basis points from , CEMEA retained at 220 basis points and LAC at 150; monthly floor of 1,500 fraud and dispute counts (CEMEA 150 and USD 75,000); acquirer Above Standard 0.50% and Excessive 0.70%, corporate.visa.com, accessed .
- Mastercard Inc., Security Rules and Procedures: Merchant Edition (), Excessive Chargeback Program §8.3 (thresholds set in Mastercard’s Data Integrity Monitoring Program manual), mastercard.com, accessed ; thresholds as an acquirer publishes them (Excessive Chargeback Merchant 100–299 chargebacks and 1.50–2.99%, High Excessive 300 or more and 3.00% or more, both conditions met; a month’s chargebacks over the prior month’s sales): PayPal Braintree, Mastercard Excessive Chargeback Program, developer.paypal.com, accessed .
- European Union, Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets (recast Transfer of Funds Regulation), transfer-information obligations for crypto-asset service providers with no de minimis threshold; applicable from , eur-lex.europa.eu, accessed .
- European Union, Directive (EU) 2015/2366 on payment services in the internal market (PSD2), including Articles 3, 4(22), 4(25), 4(44) and 10(1) and Annex I, eur-lex.europa.eu, accessed .
- European Banking Authority, Opinion on the interplay between PSD2 and MiCA in relation to crypto-asset service providers that transact electronic money tokens (EBA/Op/2025/08), , paragraph 23, eba.europa.eu; Opinion on the supervisory priorities at the end of the transition period under the No Action letter on the interplay between PSD2 and MiCA (EBA/OP/2026/01), , paragraphs 2 and 8, eba.europa.eu, both accessed .