Bitcoin has been around since 2009, and since then an influx of altcoins have entered the market to much acclaim. Yet, despite questions being raised as to whether bitcoin is going to change the world and how it will become the world’s single currency in 10 years, its acceptance among merchants is still low.
A number of factors are involved which may be hindering its surge into the mainstream. These include slow transaction speeds and a lack of regulation. With discussions ongoing relating to regulatory issues and work continuing with the Bitcoin Lightning Network — designed to solve bitcoin’s scalability problems — a complete concrete solution has yet to be found.
One payment aggregator, however, is claiming to have a solution that will bridge the gap between traditional payments and cryptocurrency that will enable merchants to accept digital currency anywhere, anytime.
Linking fiat with crypto
SelfPay.Asia, a point of sale (POS) payment aggregator, uses local payment processors in each merchant’s country to provide a unified mobile and Web interface to accept international credit cards and local debit cards, according to its white paper.
For many merchants and sellers the concept of accepting cryptocurrency payments may seem like a plausible idea; however, the act of merchants changing from traditional fiat to digital is something that hasn’t seen much excitement.
For the Singapore-based company, they are hoping to change this by getting sellers and merchants to use digital currency without changing their habits. They aim to achieve this through the POS system. They are also hoping to educate sellers on the advantages of cryptocurrencies by giving back a sum of their POS transaction fee in the form of the platform’s SxP tokens.
Additionally, SelfPay will enable deals between merchants in a B2B model using either credit cards or bank transfers with reasonable transfer fees, or cryptocurrencies that come with lower fees. Unlike traditional banking services, the platform is available 24/7.
“SelfPay is built with a modular architecture that allows payment gateways to be swapped in and out in a seamless fashion,” the company white paper states. “This allows the user to select their preferred payment gateway depending on their business context and the country their business is targeting. The modularity allows SelfPay customers to adapt their payment gateway to a more favorable one as their business grows or shifts.”
Notably, the simple fact that SelfPay accepts credit cards and local debit cards, as opposed to just focusing on cryptocurrency alone, means that it is offering a market size worth hundreds of billions of dollars.
A hybrid blockchain business model
The use of SelfPay’s SxP tokens means that it can combine the best of two worlds: cryptocurrency and fiat.
In the blockchain space, in order to incentivize the network to continue doing what it’s doing, transactions fees are applied. In a Proof-of-Work (PoW) system those fees are distributed to the miners, and in a Proof-of-Stake (PoS) system they are sent to masternodes.
According to a post from Blockonomi, ‘a masternode is a server on a decentralized network. It is utilized to complete unique functions in ways ordinary nodes can’t. It can be used for features like direct send/instant transactions or private transactions.’ It adds that as they require a significant investment to run, masternode operators receive a rewarding incentive by earning block rewards in whichever given digital currency they are aiding.
Similar to an existing blockchain model, 60 percent of transaction fees from credit card or bank transfers are exchanged to SxP tokens. With SelfPay, masternode operators receive 40 percent of those fees once they have been converted to SxP tokens. Whereas, 20 percent are reversed as a cryptocurrency reward to the seller and/or buyer, depending on the seller’s decision.
“On the other hand, when a buyer is willing to pay in ETH or BTC, those tokens will be exchanged to SxP, and then will follow the normal transaction fees in the SelfPay blockchain,” the white paper states.
The SxP token can also be exchanged to fiat currency either through SelfPay’s own exchange or via partner exchanges.
SxP token sale
After the completion of its pre-ICO sale at the end of 2017, SelfPay plans to launch its ICO sale at the end of July 2018 and is expected to last 30 days. It is aiming to raise 25,000 ETH from its initial token partners and create 7.5 million SxP for sale in exchange for the ETH committed. Once the 25,000 hard cap limit has been reached the SxP smart contract will stop accepting commitments. One ETH will be worth 300 SxP.
Funds from the token sale will help with the product launch and continue platform development and user acquisition. R&D and product development will receive 25 percent; marketing and customer acquisition will see a 30 percent stake; 15 percent will go toward admin and operations; legal and advisors and the Bounty Program will both receive five percent; and working capital will get 20 percent.
SelfPay will initially use ERC20 tokens on the Ethereum blockchain, but by Q4 2018 it will use its own blockchain. When that happens all SxP ERC20 tokens will migrate to the SxP blockchain on a 1:1 ratio. The goal for SelfPay is to set up its exchange by Q1 2019.