Coin Rivet: Tell us about yourself and Paytomat.
YO: I’m not a fan of this phrase, but I could probably be called a serial entrepreneur. Before the blockchain, I was associated with the IT industry. Then I founded a consulting company CryptoGroup, which specialises in developing decentralised solutions for different FinTech businesses. Finally, in 2016, I came up with an idea to launch a global infrastructure project based on blockchain. This is how Paytomat came to life.
It is an EOS-based decentralised software solutions provider for cryptocurrency payments, custom-tailored for retail. In simple terms, we want to help traditional business discover the world of cryptocurrencies, as well as prove that crypto is really convenient and simple to use. We also want to show crypto core teams that businesses are interested in such developments.
Unlike other projects, we rely on existing PoS solutions, payment processing and guest management software. We’re building plugins and performing API integrations to enable existing products to process payments in crypto. Without the need to invest into new hardware or software, merchants can quickly integrate cryptocurrency payments into their existing business processes. Paytomat solutions include a multi-currency wallet (available for iOS and Android), merchant app (Android; iOS), modules for PoS systems, e-commerce and shopping cart plugins.
Finally, merchants can use our mQR technology, a solution similar to WeChat Pay or Alipay where each merchant can create and print out a static QR code for their business. This product specifically designed for small businesses that might not have their own PoS systems. To make a payment, the customer simply scans the mQR-code and chooses their crypto to pay, while the merchant receives a simple push notification or SMS on their phone. In conjunction with the Paytomat wallet, such a payment goes through almost immediately in any cryptocurrency.
Coin Rivet: What sort of progress have you been making in Europe?
YO: Let me brag a bit here. Today we are the largest company of our type in Eastern Europe. It’s too early to talk about the western part of things, but we are heading in that direction.
Paytomat is already being used by more than 300 merchants, from restaurants to stores, beauty salons, and even medical clinics. This summer a grocery market installed Paytomat. As a result you can buy groceries with your Bitcoin. The most interesting thing here is not even the fact that the grocery market and the blockchain concepts are so far from eachother, but that ordinary salespeople – typical Baby Boomer moms – easily understood how to use our system. It means that we are bringing, in small steps, mass crypto adoption closer to your average Joe.
At this moment, I’m talking about our home market, Ukraine. If we look at Western Europe, we already operate in Spain, the Netherlands, and the Czech Republic. Next in line are Germany and the UK.
As practice shows, adding the Paytomat solution to your business is not just a way to replace cash or add a crypto payment option to your PoS system. Crypto is perceived by customers as something innovative, proof that business can move with the times.
“The situation is similar to the gun ownership debate, i.e. guns don’t kill people, people kill people. Just like that an instrument that’s quicker, cheaper, and independent of any financial institution is not necessarily (and in most cases is not) a way to buy drugs or scam people out of their money”
Coin Rivet: Could you talk us through your US launch, how you landed Insomnia as the first customer there and what are your plans for the future?
YO: Today, the US is one of the largest cryptocurrency markets in the world with around 9% of Americans owning digital assets, according to Dalia Research. This figure is estimated to double in the near future. And in view of local legislation, the market for crypto payments can become especially popular. Crypto won’t be exclusively used to be withdrawn or converted into fiat currency.
Insomnia is our first project in collaboration with the American Nightlife Association, our partner since the end of summer 2018. This organisation unites over 30,000 merchants and assists us in establishing a network of partners (banks, exchanges, gateways and processing companies) to create a legal scheme for each of the states to introduce payment to merchants on the fiat settlement account in exchange for payment received in the cryptocurrency.
The choice of Los Angeles as the city for launch was not accidental. First, Insomnia is a place with a history that is also called the ‘truest writers’ cafe in the city’. It has its own big formed community. The second reason is the reopening of this cafe. We thought that the ability to pay via crypto in the cafe that has updated not just its interior but even inner woking processes, is kind of a symbolic thing.
Although Insomnia became the first place where Paytomat had appeared, we have ambitious plans. Just a week ago, our system was launched on the east coast, in New York’s Radiant Room. Next up are San Francisco and Chicago. Thus, we are gradually expanding our influence in the major US cities.
Coin Rivet: How do you respond to claims that cryptocurrencies are all hype, no substance and a solution to a problem that doesn’t exist?
YO: Of course I cannot agree with this statement, but let’s start with some numbers. There is no exact data on all those who use digital assets in the world, but the number of blockchain wallet users increased from three million in 2015 to almost 29 million by the third quarter of 2018.
If we’re talking about crypto payments, the Boston Federal Reserve cited as a fact that 75% of US consumers who own cryptocurrencies have used them for payments within a 12 month period. I don’t think that these facts are simply related to hype. People get acquainted with blockchain-world products, start using them and find certain benefits that the fiat world simply cannot offer. As an illustration, take a look at some countries in Latin America or Africa. Due to the enormous inflation of local fiat currencies, crypto becomes a convenient asset for storing and transferring valuables.
However, I understand why the overhyped label is still used by many. Because of the boom that we saw in the 2016-17 years, and the blind belief that the market is waiting for constant growth, some could be disappointed in the topic of cryptocurrency, as a phenomenon. I agree, it is unpleasant to observe your capital making impetuous Xs, and then decreasing in the same way.
Besides, a negative factor affecting all of us is the large number of unscrupulous projects. Because of them, for example, there is a huge risk of finding a scam or fraud epithets next to the term ICO. Even if we’ll see plenty of great ideas and favourable investment climate on the decentralised market, we will have to face the problems of today’s situation.
Coin Rivet: The UK Treasury Committee recently labelled Bitcoin and other cryptocurrencies a ‘Wild West industry’ and called for regulations in order to protect investors. What’s your take on regulation in this space?
YO: It’s clear that a regulatory presence in this space is imminent. If you look at the entire world, I can say that the situation is more positive than negative. Yes, some countries are trying to tighten the laws for the blockchain, but the rest, one way or another, understand that cryptocurrencies are already here, and they have to be taken in to account, although nobody knows how to do this. Paradox, but that is the reality. So far maybe only the US-based SEC is making some clear statements about it
If we are talking about the statement made by the British committee, the ‘Wild West’ is mostly referring to illegal and unmonitored fundraising which in some cases is a masked security offering. Here regulation is necessary because investors should be protected against scammers, not decentralised tech in general. The situation is similar to the gun ownership debate, i.e. guns don’t kill people, people kill people. Just like that an instrument that’s quicker, cheaper, and independent of any financial institution is not necessarily (and in most cases is not) a way to buy drugs or scam people out of their money.
Coin Rivet: The call for regulation aside, what’s your take on the current state of the cryptocurrencies space? Has the bubble burst?
YO: In this matter, I don’t want to be like some public figures and predict the price of certain cryptos or future of the whole market. This is a very complex issue with many variables. I want to point out that there are some significant challenges which the crypto community should solve together, even though each project has its own global targets.
Without teamwork with other projects, mass implementation of blockchain technology will take much longer and be more problematic. It is possible that the crypto industry needs its own industry alliances to create common technology standards and defend against the biases of traditional financial institutions.
Coin Rivet: Where would you like Paytomat to be 12 months from now?
YO: We see Paytomat taking a niche in developing markets with a share of at least 10% of cryptocurrency payments. We see enabling low-tech merchants to process payments easily and people having a real alternative to cash. And reliable gateways in dozens of countries that convert crypto to fiat and vice versa, and also assets bought and sold on decentralised exchanges en masse.
We want to make our customer solutions the most convenient way into crypto payments for a million people worldwide, for buying and spending their first ‘digital gold’ and being their own bank. A few weeks ago we launched a test of our economic model, and today I can say that our hypotheses were correct. Therefore, we have decided to abandon the usual crowdfunding in favour of a bolder, but promising strategy.
In a nutshell, we decided to distribute Paytomat tokens, which are the basis of our economy, not through an ICO, but immediately through decentralised exchanges. That is, we are going to play by other – our own – rules. We offer not an abstract whitepaper with an abstract tokensale, but a working product with a working economy and assets which are available right here and right now.