Paid By Coins wants to transform the global payments industry
There are few places where you can use cryptocurrencies, but Aussie startup Paid by Coins is trying to change that.
Holding a wallet full of crypto coins might seem like fun, and perhaps even a way of making a start in a world where traditional fiat currencies might not be the only way to buy goods and services. But using cryptocurrency for everyday transactions is still a challenge. Paid by Coins, a service founded in Australia, plans to change that. They have created a bridge between cryptocurrencies and traditional payment platforms.
Gabriella Wilson, a user of Paid by Coins, has been interested in cryptocurrencies for some time and saw Paid by Coins as a way of using her saved coins.
Wilson says she has been able to pay her bill from Sydney Water using the technology.
"I found to really easy and simple – pretty much the same as other ways of paying your bill, except that you're using cryptocurrency," she said.
The initial setup was very straightforward, said Wilson, with the establishment of a Paid By Coins account and linking it to her cryptocurrency wallet only taking a few minutes.
What is Paid by Coins?
Paid by Coins has been developed by the Lakeba Group, a business incubator based in Sydney. Giuseppe Porcelli, founder and CEO of the Lakeba Group said they identified a problem and decided to take a different approach to the challenge of linking traditional payment platforms with cryptocurrencies. They developed a Software Development Kit, or SDK, that can be leveraged by any licensed party to build a gateway between cryptocurrencies and payment systems.
In Australia, that bridge, branded Paid by Coins, links cryptocurrency wallets with the BPAY platform.
"The SDK is the expertise of software development and the business capabilities of commercialisation all in one place together. This enables any level of developer to immediately build any services between cryptos and fiat, no-cash services like BPAY".
And, as BPAY leverages the New Payments Platform that uses Osko for near real-time payments between accounts, Porcelli expects to be able to use Paid by Coins with the PayID system, so users can use the cryptocurrencies to transfer cash into other people's bank accounts.
Porcelli said that even though they've started with BPAY, there are many non-cash payment systems operating globally, and there's no reason this platform couldn't work globally. For example, he said it would be possible for the SDK developed by Lakeba and used by Paid by Coins to be used in his native Italy to allow cryptocurrency payments to work with the SIA payments platform.
Paid by Coins is, effectively, a proof of concept that can show the world how this technology can be deployed globally.
Overcoming the volatility challenge
One of the challenges Paid by Coins faces is dealing with the price volatility of some currencies. Porcelli said the company has made a substantial investment in AI technologies, with three-quarters of the company's 150-strong developer team being "AI experts". The AI is used to find the best possible market prices for currencies, acting as a cryptocurrency arbitrage system that identifies the best prices at the time a transaction takes place.
In addition, they have a float of fiat and different cryptocurrencies, so they can effectively hedge against short-term price movements that might affect the value of a transaction. This is important as none of the parties in the transaction wants to suddenly find their payment has decreased in value.
"We are effectively working as a 'cold storage'. We are able to guarantee, at the time of their transaction, a fixed price for our customers".
It's this combination of techniques that allows Paid by Coins to generate revenue for the Lakeba Group.
In order to expand globally, Porcelli said the company will be using a franchise model where "hundreds of Giuseppes around the world, in their own countries, are able to deal with the local market".
Those managers will be members of a franchise program where they can work with the local exchanges.
As far as challenges go, Porcelli said the lack of regulation is a problem as it discourages many people from engaging in cryptocurrency markets. Once some better regulation is in place, this will "massively change the game" he adds. Once that happens, more consumers will enter the market and he expects Paid by Coins will be ready to engage with more people.
That will result, he expects, in a market where rather than having 10,000 people spending $1000 per month in cryptocurrency, there will be a million users spending $100 each day.
- Can Dogecoin’s price continue to soar despite a marketwide correction?
- Bitcoin’s price plunges 10% before rebounding – market witnesses massive liquidations
- Ethereum price surges to all time high before Berlin hardfork
- Bitcoin price sets record above $84,000 lifting these coins with it
- What is behind Ethereum’s soaring price?