Wix to take cryptocurrency payments with PumaPay
A more flexible payment solution opens up a lot of new doors.
Wix has made a name for itself as one of several next-generation web-development providers, generally opening up the Internet and supplanting the era of expensive professional web design with satisfactory DIY tools.
Depending on your background, it might be best known as either a disruptive web-development platform or the company that bought DeviantArt for $36 million.
It's done well for itself so far, with one of the open secrets of its success likely being its "freemium" payment model, similar to what's used by the Robinhood trading app, WordPress, almost all of the most commercially successful "free" mobile games and many more.
This model is essentially a set of core features available to everyone for free, and then some more advanced features behind a paywall and available as a subscription model. It's proven to be a very financially happy compromise between free accessibility and commercial viability, but also comes with the limitation of needing to either devise a one-size-fits-all payment model or to break the product down into a few separate tiers (Gold, Silver, Platinum, etc) with pre-defined features on each.
This tiered system is fine for physical goods, where manufacturing limitations mean you can't customise everything anyway, but for purely digital goods and services, or access-ticket type services like gym memberships, the limitations of existing payment systems are one of the main bottlenecks that's preventing businesses from letting customers customise their own products.
That might be why Wix will accept cryptocurrency payments, specifically PumaPay for a more seamless and secure recurring payment option.
Pull Payment Protocol
PumaPay wrapped up a hefty $117 million ICO a few months ago, carried largely by private fundraising. Its core value proposition is a system that lets companies pull payments from customers, with customer approval, rather than one where customers push payments at companies.
It might sound like a fairly arbitrary distinction at first, especially with direct debits from banks already being a "pull-type" system. But it does offer some unique benefits.
First, it lets businesses pull funds from customers with that customer's approval. This gives customers direct control over the automated payment system itself, rather than needing to hunt down the company who then needs to hunt down the bank if they want to cancel a service or for the business to suddenly deal with a customer cancelling payments out of the blue.
There are also major advantages with the elimination of fees on international payments and currency conversions, which make an enormous difference to a global digital goods firm that needs to accept payments from all around the world. Plus, it also works on weekends, there's no need to rope in banks over changes, it can potentially offer a much more seamless experience and will often be the only commercially viable way to serve legitimate customers in high-fraud areas.
These are all relatively well-known benefits of cryptocurrency payment systems. However, one of the more uniquely PumaPay advantages might be the ease with which a company can minutely customise payment systems on a per customer basis or let customers customise it themselves. This lets businesses seamlessly weave together subscription models, free trials, pay as you go, pre-pay or pay-later models, different pricing tiers, deeply customisable products with automatically generated pricing schemes, options for automatically adjusting prices based on other factors like website traffic or seasonal variations or average market performance, and anything else one can think of.
It might be no surprise that online adult entertainment sites were among the earliest brands to start exploring PumaPay.
But Wix might be an especially interesting use case. It deals purely in digital goods and services, but its customers (the website owners) are often running ecommerce websites and dealing with customers of their own. Eric Benayoun, head of payments at Wix, foresees the Wix-PumaPay collaboration extending down the chain to let Wix's own customers reap the benefits as well.
"We believe our collaboration with PumaPay will help us provide an additional layer of payment options to benefit both our users and their customers," he said. "We continually strive to offer our users new and alternative means to reach additional customers and enhance the buying experience."
"Wix and PumaPay share the vision of providing merchants with the best online business experience," says PumaPay CEO, Yoav Dror. "While Wix enables small businesses to easily integrate payment methods to their businesses online, PumaPay offers the potential for them to accept payments in cryptocurrencies hassle-free, avoiding the pains of traditional payment solutions, such as transaction fees, chargebacks and associated fines, and long transaction consolidation timelines. We're excited about the potential of this collaboration."
Planet Healthness Gym
Planet Healthness is a (hopefully hypothetical) gym, looking for new ways to better serve its customers, beyond just being packed with New Year's resolutioners in early January and then dealing with dwindling attendance for the rest of the year.
Like most businesses, it's dealing with a lot of limitations in its existing payment system, including hefty fees as well as having to batch payments, having to chase down customers for unpaid memberships and having to occasionally scrap with banks over clerical errors. Also like most businesses, it's gotten accustomed to these and perceives them as normal, rather than as problems to be solved.
Then one night, in a weirdly specific flash of inspiration that came in a dream, Planet Healthness's owner starts thinking of what it might be able to do with a crypto payment system. He immediately pulls out a permanent market and scrawls it on the wall before the inspiration fades.
- Payment systems that let customers top up accounts or set up pull payment arrangements and have individual control over their plans rather than just signing up for one of three membership tiers and then feeling the emotional burn as their money works its way out of their bank accounts
- Customisable plans with algorithmically adjusted prices, such as access to facilities of the customers' choice programmed onto customer membership cards
- Automated cashback rewards for regular attendance month on month, resetting each January
- Letting customers add and remove specific extras as needed, such as one-off sessions or personal trainer workouts
- Referral arrangements
- Fees that vary throughout the day, being higher during peak hours and lower at other times, to more evenly distribute traffic
- A way to more easily attract international visitors by charging membership cards with any (crypto)currency sans exchange fees
Of course, selling customers on maintaining a separate cryptocurrency in a separate wallet, and being their own bank, is still a tall order. For now, systems like PumaPay are probably going to remain a niche payment option for the more crypto-enthusiastic customers.
But it opens up a lot of doors, and there are plenty of reasons for businesses to encourage their customers to pay with crypto. At this stage, it's largely a matter of waiting for the technology and infrastructure to be ready, and waiting for a large enough user base to make it worth unlocking the advantages.
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VET, XLM, BTC and ADA.