Future-Proofing Merchant Onboarding for Crypto-Enabled Payments

Global payments are evolving rapidly. Crypto, stablecoins, and digital wallets make transactions instant, borderless, and often outside traditional systems. But innovation brings sharper regulatory focus, especially as high-risk sectors like crypto, online gambling, and forex grow globally. PSPs and onboarding platforms face tighter AML/CFT rules, making risk management and merchant monitoring essential.

Regulation is fragmented and struggles to keep pace. While the European Banking Authority updates AML rules, other regions set conflicting standards, creating a complex compliance maze. For PSPs handling high-risk or cross-border merchants, this leads to operational challenges, legal risks, and revenue pressure.

Onboarding merchants is no longer just ticking boxes—it demands seamless digital merchant onboarding and strong risk management. Success requires smarter, faster, and flexible solutions that navigate regulatory grey areas and global risks without slowing growth.

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Key Takeaways

Crypto and stablecoins are changing how payments work worldwide, but new rules are making it harder for payment providers to keep up.

• Crypto payments are fast (and global) but need strong checks to prevent fraud and money laundering.
• Using smart technology and testing new systems helps payment providers keep up with changing rules and grow safely.
• Hong Kong’s new law for stablecoins shows the world is moving toward stricter regulation.
• Payment providers must use flexible, automated systems to onboard merchants quickly while staying compliant.

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Crypto Goes Mainstream

At the core of this shift lies usability without added complexity. Take Bitget Wallet, for example: users can pay with stablecoins like USDT and USDC—not only within niche online groups but across a growing network of global merchants. Whether shopping in-store, travel, entertainment, payments flow smoothly. Users aren’t burdened by blockchain details or gas fees.

Customers experience instant, cross-border payments that hold their value. Merchants enjoy faster reconciliation, no foreign exchange fees, and zero risk of chargebacks—while platforms handle merchant risk monitoring in the background to ensure secure transactions.

Behind the scenes, platforms like Paydify simplify the technical side. They standardise blockchain protocols, connect multiple networks, and provide merchants with easy plug-and-play integration. This removes the need for merchants to handle crypto directly—a key obstacle to wider adoption. By clearing these hurdles, services such as Paydify and Bitget are setting the stage for crypto payments to expand commercially.

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From Pilot to Mass Adoption

Bitget and Paydify aren’t running a simple technical test or a regional pilot. They’re targeting genuine international impact. Their journey begins in Vietnam and the Philippines, where national QR code systems are unifying crypto payments for everyday consumers and businesses alike.

Next, they turn to Mexico and Latin America — areas with heavy remittance flows, inflation issues, and large unbanked populations. These conditions make them prime candidates for stablecoin adoption. 

Their ultimate aim is straightforward: establish crypto as a credible alternative to card networks and conventional banks, particularly in places where high fees or limited infrastructure complicate identity verification for digital onboarding.

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From HODL to PayFi

Bitget’s “PayFi” strategy rejects the notion of crypto as merely a speculative asset. Wallets aren’t just for holding or trading anymore—they’re evolving into payment gateways, making everyday crypto use straightforward.

The concept is clear: for crypto to work as money, it needs to circulate. This partnership delivers just that—a seamless payment experience powered by stablecoins. Spending crypto becomes as simple as tapping a card or scanning a QR code. No volatility, no jargon, no hurdles.

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Regulatory And Compliance Challenges

Why This Matters

For Payment Service Providers (PSPs), this shift is significant. As crypto payments evolve, the merchant onboarding processes must adapt, and meeting anti-money laundering (AML) rules isn’t just theory anymore. PSPs must update their procedures—integrating AML compliance tools to manage blockchain payments, stablecoin settlements, and crypto-to-fiat conversions.

That means:

• Checking crypto wallets and transaction histories, not just standard bank accounts.
• Ensuring compliance with travel rules and tracing the origin of crypto funds.
• Supporting high-risk merchants working at the edges of new payment methods.
• Doing all this without letting user experience slip.

The Bitget x Paydify model goes beyond payments—it offers a glimpse into the future of digital commerce. PSPs must get ready for a world where crypto is no longer unusual, but the everyday standard.

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Risks And Vulnerabilities In A Borderless System

PSPs and ISOs navigate a tangled regulatory maze as digital payments stretch across borders. The old rules don’t apply anymore, especially when dealing with high-risk merchants or operating in patchy regulatory environments.

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AML/CFT Gaps Across Jurisdictions

A core challenge in a borderless payments system is regulatory inconsistency. Anti-money laundering and counter-terrorist financing (AML/CFT) standards differ sharply from one country to another, leaving gaps criminals can exploit. Some regions demand strict transparency and thorough checks; others lag behind with weak enforcement or outdated laws.

• Conflicting definitions of what counts as a “reliable source"
• Differing document requirements
• Uneven processes for verifying beneficial ownership

These disparities make it harder to assess risk during merchant onboarding, particularly without the support of adaptable onboarding systems. Without a flexible, unified compliance approach, PSPs either expose themselves to fraud or create unnecessary barriers for genuine businesses.

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The Complexity Of High-Risk Merchants

Certain sectors — cryptocurrency, online gambling, adult services, and forex trading — stand out as particularly exposed. Their international reach and unclear regulatory status, combined with high transaction volumes across borders, make them easy marks for money laundering and fraud.

The European Banking Authority’s final AML amendments specifically highlight these sectors by imposing:

• Stricter onboarding and monitoring requirements
• Enhanced due diligence (EDD) beyond basic Know Your Business (KYB) checks
• Ongoing merchant risk monitoring using advanced risk modeling to detect changes in behaviour, ownership, and transaction patterns in real time

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Where Geography And Regulation Don’t Align

Geographic dispersion adds layers of complexity to onboarding. For example:

• Merchants working in multiple countries face different onboarding requirements, causing delays, confusion, and higher dropout rates. Inconsistent forms, languages, and document standards slow down the process.
• Online-only merchants without physical locations are harder to verify. Missing or incomplete business details make digital merchant onboarding more difficult and increase risk.

This mismatch creates bottlenecks. PSPs must balance swift merchant verification with compliance obligations, frequently navigating incomplete or conflicting data. Without a flexible onboarding system that adapts dynamically to regional rules and risks, scaling across borders becomes risky and inefficient.

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Global Regulatory Response

What The EBA’s Final AML Amendments Change

The new rules demand:

• Tighter onboarding checks for high-risk sectors
• Thorough KYB processes to verify ownership and business purpose
• Continuous transaction monitoring, adjusted to risk levels

This pushes PSPs to adopt a dynamic, risk-focused onboarding strategy. Risk assessment must be ongoing throughout the entire merchant relationship. Relying on manual methods or fixed risk scores is no longer enough—automated risk assessment, data integration, and machine learning take centre stage.

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Stablecoins: The Next Regulatory Flashpoint

Stablecoins are drawing sharper attention from regulators as they sit squarely between crypto and traditional payments. They offer speed and global reach, but also raise serious questions around financial stability, fraud, and AML safeguards.

Hong Kong has stepped up with one of the clearest regulatory frameworks to date—potentially setting the pace for others to follow.

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Hong Kong’s Stablecoin Bill: Setting A Clearer Standard

On 21 May 2025, Hong Kong’s Legislative Council passed the Stablecoins Bill, introducing a risk-based licensing regime for fiat-referenced stablecoins (FRS). Under the new framework, any organisation issuing or promoting FRS—whether based in Hong Kong or merely referencing the Hong Kong dollar—must now be licensed by the Monetary Authority (MA). The rules apply equally to local and overseas players.

Key points worth noting:

• Licensing isn’t optional: only regulated entities can issue or promote stablecoins to the public. That puts an end to unlicensed advertising or casual promotion of FRS products.
• Reserves and redemptions are non-negotiable: issuers must keep client assets separate and maintain enough reserves to redeem stablecoins at face value. Redemption needs to be possible under fair and workable conditions, offering reassurance to both retail and institutional holders.
• AML, CTF, and risk controls are baked in: full compliance with anti-money laundering and counter-terrorist financing obligations is mandatory. Risk management standards are aligned with global benchmarks.
• Governance needs to be watertight: transparent reporting, external audits, and proper board oversight aren’t just best practice—they’re legal requirements under the new regime.

The Bill follows a simple but firm logic: same activity, same risk, same regulation. In effect, stablecoin issuers now face the same level of scrutiny as traditional financial institutions.

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What The Stablecoins Bill Signals For Global PSPs

Hong Kong’s new Stablecoins Bill might be locally applied, but the message is global. As a financial heavyweight, Hong Kong often sets a regulatory tone others follow—and this latest move is already echoing across the UK, EU, and other major markets.

For PSPs and ISOs, the direction of travel is unmistakable: stablecoin-related activity is heading into a new era of scrutiny. What’s changing, and what needs your attention?

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What’s Already in Motion

• ‍Licensing Required: entity issuing stablecoins pegged to fiat currencies (like the Hong Kong dollar) must obtain a license from the HKMA.
• PSPs and FinTech's cannot onboard merchants that accept or settle in unlicensed stablecoins.
• PSPs and ISOs must verify that stablecoins used by merchants are from licensed issuers.

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The Global Direction

While the EU moves ahead with MiCA, Hong Kong’s framework sharpens the focus on FRS specifically—and that sharper scope is resonating. We’re seeing a clearer global consensus emerge around three core pillars:

• Stablecoin-related merchants now face stricter onboarding checks, as issuers must meet licensing standards similar to those for banks.
• Onboarding platforms must dynamically tailor workflows to assess whether merchants using stablecoins comply with reserve and redemption requirements.
• Real-time AML are now essential in onboarding flows, requiring tools that can track stablecoin transactions and flag high-risk activity instantly.

For PSPs and ISOs, this isn’t a wait-and-see moment. It’s time to:

• Reassess onboarding logic and flag high-risk flows tied to stablecoins.
• Audit partners for regulatory exposure—especially wallet providers and cross-border processors.
• Choose infrastructure that can flex with local and international rule changes, not fight against them.

The stablecoin space is fast becoming the next regulatory flashpoint in digital finance. Firms that move early—investing in automated customer onboarding, embedding oversight, and building regulatory intelligence into every layer—will be the ones that scale with confidence, not compliance debt.

A Regulatory Tightrope

For PSPs, wallets, and merchant aggregators, regulation isn’t just another operational layer—it’s a complex, constantly shifting ecosystem. Payments and crypto may move freely across borders, but compliance doesn’t. Each jurisdiction sets its own rules, priorities, and thresholds. This creates four key areas where firms are having to adapt fast, often under pressure.

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1. Hong Kong: Clarity With Constraints

Hong Kong’s Monetary Authority (HKMA) takes a tightly focused approach, licensing issuers of e-wallets and stored value facilities through a prescriptive framework. It’s structured and unambiguous—designed to safeguard financial stability and protect consumers. But that clarity can slow things down.

Key friction points:

• Heavy front-loading: Firms must clear strict compliance hurdles before launching, delaying time to market.
• Limited flexibility: Rigid requirements leave little room for legacy systems and outdated workflows.‍
• Innovation bottlenecks: Slow regulatory approvals prevent PSPs from quickly adapting onboarding workflows to new products or services.

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2. Europe: Scrutiny Beyond The PSP

The European Banking Authority applies a broader lens, tightening AML and onboarding obligations for PSPs and also for merchants—especially in cross-border and high-risk sectors. The compliance bar keeps rising, demanding ever more from operational teams.

Where complexity creeps in:

• Extended due diligence: Firms must vet not just customers, but merchants—often with jurisdiction-specific requirements.
• Ownership transparency: Disclosure rules differ across markets, requiring tailored approaches.
• Onboarding drag: Localised merchant risk monitoring adds steps, time, and increases the chance of inconsistency.

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3. Crypto: One Asset, Many Rulebooks

Frameworks like the EU’s MiCA and various US stablecoin bills aim to bring consistency to crypto regulation. But their scope stops at the border. For firms with global footprints, this creates overlapping regimes that don’t talk to each other, forcing teams to manage fragmented compliance workflows with limited interoperability.

Three Core Challenges for Global PSPs and Wallets

• Operational sprawl: From licensing to data laws, firms face a patchwork of standards that multiply costs and bog down onboarding.
• Compliance inconsistency: Disclosure and monitoring requirements vary wildly—there’s no single rulebook to follow.
• Scalability strain: Adapting to each market means extra steps, more resources, and bigger risks.

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4. Striking the Right Balance

Global firms sit between two competing priorities: delivering fast, seamless user experiences and staying compliant with an expanding web of regulations. These aren’t easily reconciled.

The tension in practice:

• Innovation needs agility: Speed, simplicity, and scalability are non-negotiable in competitive markets.
• Compliance demands control: Robust checks, transparent reporting, and rigorous oversight are essential.
• The solution: Agile, automated compliance systems that adapt to change and flex to local nuance—without slowing everything down.

Get this right, and compliance becomes more than a checkbox—it becomes a lever for scale.

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What Forward-Thinking PSPs and Wallets Need to Do

As regulations tighten—especially with the EBA’s stricter AML requirements—PSPs, wallets, aggregators, and stablecoin issuers must act decisively to remain compliant and competitive. Nayax Australia shows how smart onboarding platforms can simplify compliance and fuel operational growth.

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1. Build Flexible Onboarding Processes

Rigid onboarding is a thing of the past. Today’s PSPs and wallets use digital merchant onboarding platforms to craft adaptable workflows that respond instantly to risk, location, and merchant type. Automation triggers enhanced checks tailored to:

• Industry specifics
• Geographic regulations
• Ownership structures
• Transaction behaviour

Automated onboarding processes balance thoroughness with speed, cutting customer drop-off and smoothing the onboarding journey.

Case in point: Nayax Australia used OnBoard’s Smart Forms and Reseller Integration to automate data collection, slashing onboarding time by 98% and onboarding over 8,000 new businesses via 100+ partners.

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2. Navigate Cross-Border Compliance with Jurisdictional Mapping

Cross-border operations demand sharp local insight. PSPs and wallets need tools that map AML/CFT regulations, accepted data, and verification requirements by jurisdiction. This ensures onboarding and monitoring:

• Respect local rules
• Maintain global consistency

Seen clearly when: Nayax brought siloed systems together with OnBoard’s unified platform, managing compliance seamlessly across 11 offices worldwide and multiple acquirer integrations.

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3. Leverage Automation, Continuous KYC, and Network Risk Scoring

Complex data requires smart tech. AI-powered tools enable:

• Ongoing continuous KYC updates
• Network risk scoring
• Instant risk insights based on transaction and merchant relationships

Illustrating this: Continuous KYC keeps profiles current and early risk detections. Nayax’s partnership with OnBoard delivers AI-driven compliance checks and risk underwriting that uncover hidden threats, while outsourced KYC avoids bottlenecks during rapid scaling.

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4. Monitor Stablecoin Licensing Worldwide

Regulations around stablecoins evolve quickly. PSPs and wallets must stay vigilant on:

• Licensing requirements
• Policy shifts
• Enforcement actions

Consider how: Nayax leverages OnBoard’s real-time compliance automation and centralised workflow visibility to swiftly adapt processes and stay ahead across multiple markets.

By adopting these practical strategies and drawing on solutions proven by leaders like Nayax Australia, PSPs, wallets, and aggregators don’t just meet compliance requirements—they turn it into a competitive edge, speeding up onboarding and sharpening transaction monitoring.

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Conclusion

Crypto payments have stepped out of the shadows and are reshaping how value moves across borders and industries. Innovation charges ahead, but regulation struggles to keep up—marked by complexity, fragmentation, and tighter scrutiny. For PSPs, the key to success lies in agility and foresight: adopting compliance approaches that adapt to changing rules, manage risk on the fly, and ensure smooth user experiences. Those who turn these challenges into strengths will lead in a payments ecosystem where crypto is no longer the exception, but the standard.