Crypto Payments Firm CEO: Hacks, Scams, and Volatility Discourage Mass Adoption

AtomicPay’s CEO believes that scams and volatility are the primary things holding back public mass adoption of cryptocurrencies.

The Thailand-based company is a non-custodial crypto payment processor. They are one of the few crypto payment processors that facilitates payments for multiple cryptos without holding merchant funds in escrow and charging a fee before releasing funds. AtomicPay charges 0.9% at the end of every month that their service is used. Rather than demanding a percentage of every sale at the time the sale is settled, they issue a bill.

CEO Benz Rif tells CCN in a recent interview that they very much rely on an “honor system.” Importantly, he says they haven’t had any problems with people failing to pay fees.

Founded Out of High Fee Woes

Rif says that he created the company after paying as much as 13% to Paypal. Domestic users based in the US may not experience such high fees, but when all is said and done, for companies operating in places like Thailand, PayPal and currency conversion fees top 10% routinely. He says his company tried to use Bitpay but ran into similar problems there.

“Back in 2017, I was doing a lot of online business. Before we used BitPay, we used Paypal. So what happens with Paypal is, let’s say a customer pays us $100. At the end of the day we only get $86 or $87. So I decided to move to cryptocurrencies. When we tried Bitpay, it was around 8%. What they advertised was 1%. There are other charges like withdrawal fees, EFT when you do a bank transfer across borders, and other fees. So I was sitting down with friends and we decided to create something different.”

AtomicPay enables its users to accept crypto payments directly. They use an in-house wallet software which enables them to know how much revenue a company generates in a month. It enables merchants to issue as many addresses as necessary for customers. Companies receive the funds directly and could theoretically skip out on the bill, but this doesn’t happen.

Rif is working on a whitepaper that discusses the problems for merchants with the existing centralized payment processing model. He provided the following infographic as a visual aid to explain the issue of exchange rates and centralized models.

Rif is working on a whitepaper that discusses the problems for merchants with the existing centralized payment processing model. Source: Benz Rif

Non-Custodial Services Are More Decentralized

Besides the simple desire to improve user ability to receive cryptocurrencies, Rif says the company wanted to build something more in line with the principals of decentralization than was currently available.

The majority of crypto payment processors hold funds and charge fees for withdrawal. An advantage to a non-custodial service is that AtomicPay doesn’t fall under certain new regulations in Thailand which would otherwise see his firm as a money services provider or essentially the same thing as a bank.

“If you hold funds for any length of time, you are liable to be regulated as a financial institution.”

Clients in Thailand and Venezuela have access to various exchanges which will conveniently convert their proceeds to fiat for them.

The service is not yet supporting Ethereum publicly. Rif says that the company has offered Ethereum to some private customers who asked for it, and they have experienced problems with in-person transactions taking too long to settle.

The majority of AtomicPay’s merchants to date have been in Venezuela and Colombia, thanks to the help of efforts by the Dash community.

Scams and Volatility Leading Issues With User Adoption

As discussed in a recent interview with Edge wallet’s Paul Puey, merchant adoption of crypto is nowhere near where we’d have expected it to be from a vantage point of 2014. Being that Benz Rif’s company works directly on merchant adoption, we asked him what he thought were the contributing factors to slow merchant adoption.

“The amount of money in e-commerce is around $2.8 trillion. But Bitpay itself is only like $1 billion. So we are so far away. But for years we were convinced that one day cryptocurrencies would be the future of digital payments.”

“Chainalysis did a report on crypto payment processors, and they saw a decline in 2018 by 80%. So I did more research.”

“Alone in 2018, we saw more hacks and scams than we have seen over the past 10 years. There are so many hacks, so many scams, it creates a distrust among the general public.”

“I asked my wife, I asked my friends: why don’t you guys use cryptocurrencies? They told me this very simple issue. ‘We can’t trust that with all this news on it.’ Unless we can solve this issue, we will never form a trust among general merchants and people.”

Rif also believes that volatility is a hard problem for merchants to deal with. If you sell something for $100 and the following day the payment is only worth $80 or even less, you’ve got a problem that creates excess costs. The emergence of stablecoins might help to deal with this side of the equation, but ultimately volatility is part of the process in crypto markets.


Source
Author: P.H. Madore
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High Times Now Says It’s Accepting Crypto Payments For Its IPO

It turns out that the cannabis publication High Times is accepting cryptocurrency for its ongoing initial public offering (IPO) after all.

The publication announced at the beginning of August that it would accept bitcoin and ethereum for its IPO, but later walked back that announcement in an August 13 filing submitted to the U.S. Securities and Exchange Commission (SEC), as previously reported by CoinDesk.

Despite the move, however, bitcoin appears to have remained as a payment option on the company’s investment page.

When reached for comment, High Times representative Jon Cappetta confirmed that the company is, in fact, accepting bitcoin and ethereum as payment options. Cappetta told CoinDesk that the regulatory filing was made “to make the SEC happy.”

“Yes, technically we are accepting bitcoin and ethereum,” Cappetta told CoinDesk. However, High Times is not taking or holding any cryptocurrencies – rather, a third-party processor called Fund America is taking the two cryptocurrencies and converting into U.S. dollars, which the company will then receive.

“On the legal side, it’s a lot of jargon. There’s no real easy way to spell it out. They issued the release to make the SEC happy,” he said.

He explained:

“We’re accepting [cryptocurrencies] as a payment option, but technically Fund America takes the bitcoin and ethereum … It’s similar to the way if we were doing an international IPO, and we were accepting the pound or the euro, those guys aren’t accepting that money, they’re converting it to [dollars].”

The reason for the earlier walk-back was due to concerns expressed by the SEC after the company initially said it would accept bitcoin, which mainly revolved around whether High Times would directly receive cryptocurrencies, he said.

“The reason we got slapped by the SEC last time is because we were accepting it … similar to a credit card processor … [however], it gets transferred to cash and we get that, we’re not explicitly holding [cryptocurrencies],” he said.

High Times’ IPO itself is going well, Cappetta said, and the company is looking at a direct listing as a result.

“The Regulation A [fundraising] is going to close on the 12th of this month, and then from there we will begin the listing process,” he said.

Hat tip to Scott.


Source
Author: Nikhilesh De 
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Coinbase Wins Patent for Secure Bitcoin Payments System

A newly published Coinbase patent seeks to protect a way of making bitcoin purchases more secure for customers.

In the filing, published August 14, the U.S.-based cryptocurrency exchange outlined how it could develop a payment portal which would allow users to pay using bitcoin directly from their digital wallet.

“It may be a security concern for users that the private keys of their bitcoin addresses may be stolen from their wallets,” the patent stated. “Existing systems do not provide a solution for maintaining security over private keys while still allowing the users to checkout on a merchant page and making payments using their wallets.”

The system as described sets up a “key ceremony” that creates key shares that are combined into an operational master key – encrypted with the users’ passphrases – that can be made publicly available and deleted after use.

The operational master key is used for private key encryption during checkout, as well as for transaction signing when a payment is made.

What the filing calls “freeze logic” is also employed in the process, a security measure that automatically halts transactions if an administrator chooses to suspend the system.

The patent explains:

“At any point in time after the master key is loaded, the system can be frozen. The system can be unfrozen after it has been frozen using keys from the key ceremony. The checkout process can be carried out when the system is frozen and when the system is unfrozen. The payment process can only be carried out when the system is unfrozen.”

The patent goes on to note that the system also includes an API key, meaning different websites would be able to launch their own version of the portal.

The API key would have two parts: one would be specific to the host server, while the other would be stored on the system developed by Coinbase. The two keys would have to match for a transaction to go through, adding another layer of security for customers.


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5,000 Merchants Can Now Accept Cryptocurrency Payments in Chile

Chilean cryptocurrency exchange Crypto MKT has recently announced that the country’s citizens can now buy products and services with cryptocurrency from over 5,000 merchants through a new integration with a crypto payment processor.

LIONBIT

According to the announcement, a partnership between Crypto MKT and online payments platform Flow.cl allowed the merchants to add cryptocurrency payment options through a platform called CryptoCompra.com.

CryptoCompra’s platform is available in Chile, Argentina, Brazil, and Europe, and lets customers pay businesses using bitcoin, stellar, or ethereum, while letting merchants receive their payments in pesos, the country’s fiat currency.

From Crypto MKT’s end, there’s a guarantee fund that ensures payments made in crypto aren’t affected by significant price fluctuations. The announcement reads (roughly translated):

“There is a guarantee fund that allows payments not to be affected by large increases or decreases in the price of Bitcoin, Ethereum and Stellar. This gives tranquility and security to the client, since it will not have surprises in its payments.”

It further states that accepting cryptocurrencies allows businesses to accept payments from all over the world, and gives them a chance to be recognized as a “vanguard company” that can enjoy fast, secure payments.

The development is notable, as Chile is a country in which the top cryptocurrency exchanges, Orionx, Buda, and Crypto MKT, endured what was considered a blanket ban on the crypto industry, as local banks shut down their accounts, prompting them to seek clear regulations.

The ordeal saw the exchanges take the banks, Itau Corpbanca, Bank of Nova Scotia, and state-owned Banco Estado, to an appeals court that agreed to hear them. Chile’s anti-monopoly court ordered two major banks, Banco Estado and Itau Corpbanca, to re-open the accounts of Buda, an exchange that was reportedly seeing a daily trading volume of over $1 million before its accounts were closed

As CCN covered, Orionx later on won its case against Banco Estado, as the court noted the financial institution made an “arbitrary and illegal action” in closing its account. While it’s unclear whether Crypto MKT managed to see banks re-open its accounts, the other two cases seemingly point that way.

The president of Chile’s central bank, Mario Marcel, has earlier this year revealed he is considering implementing cryptocurrency regulations that would give financial institutions information needed to “monitor associated risks.”



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