Card services’ scaling limitations
On the way to global scaling and domination, a startup should solve several problems. The key one is the scaling problem, which represents the serpent eating its tail, an ancient symbol of the life cycle. In the case of a payment service, the more users it has, the more new people want to use it. Here are the most common scaling problems facing cryptocurrency card payment services, and the ways for the Weld project will solve them.
Although today the traditional payment cards market can be defined as completely flooded, users of cryptocurrency services still need tools allowing them to fully unlock the potential of both traditional finance and digital currencies. This niche is still free, especially in emerging markets, and low and middle-income countries (LMIC).
Such projects require the involvement of employees of the traditional finance field and have advanced skills in the field of digital currencies and blockchain. Their development and launching process includes not only the productive activities of developers and product designers.
It involves the scope of the legal work, interaction with banks, regulators, and local legislators, as well as significant marketing expenses, including competent PR and GR. This turns projects into ‘monsters’ that require significant initial investments or spread partnerships.
A good example here is the Venmo payment service, which was sold to Braintree company in 2012 for $26.2 mn. A year later, Braintree was acquired by the payment giant PayPal. At that time, the deal already amounted to $800 mn. At the end of 2020, PayPal launched its cryptocurrency purchase service, and six months later, Venmo’s revenue increased by 183%.
Lack of regulation
The lack of regulation in different countries also hinders the scaling of cryptocurrency services. The legislation simply can’t adapt quickly to the rapidly developing industry.
Central banks issuing national currencies and regulating local financial markets consider decentralized financial tools as a competitor that encroaches on their monopoly and try in every possible way to underrate the importance of the industry.
Given their media and administrative resources, it’s worth noting their efforts are successful. The industry image in the eyes of potential users is unfairly deformed.
The difficulty is also the fact that legislators’ evaluations of industry development vary. So different countries develop their diverse regulation, while users look to cryptocurrencies as a primarily cross-border payment tool. Therefore, they require common global rules acting equally in different jurisdictions, facilitating financial transactions.
This is one of the reasons for not negative, but at least cautious users’ attitude to cryptocurrency card services.
Among other important reasons, it’s worth noting concerns about excessive or unclear fees, as well as difficulties of KYC/ALM procedure passing. In addition, users are afraid of the ambiguity of taxation of cryptocurrency transactions which complicates its implementation as a payment method for retail trade networks.
The user may also be rejected by the difficulties of cryptocurrency daily operations which still require certain keen skills and haven’t turned a simple procedure managing from one useable app. In particular, different coins are stored on different types of wallets having various interfaces and operation rules. Other complexities are independent storage of keys from various wallets and the implementation of security procedures.
Finally, the cryptocurrency project scaling is hindered by difficulties with attracting investment. Institutions are afraid they’re investing in the industry experiencing a lack of regulation won’t allow them to get returns and make a profit. Difficulties may also arise with taxation and financial accounting.
In addition, inverters often don’t get a transparent token distribution procedure, which doesn’t clarify amounts that get developers and founders, and the possible profit of retail investors.
There are also concerns about the project’s prospects, especially at the early stages, when it has only recently entered the market and is at the stage of developing its niche. At the same time, investors are willing to return their investments as soon as possible and maximize their profits.
The cryptocurrency market volatility can be another obstacle for investors. Ones who don’t accept this key crypto market feature are afraid to invest in cryptocurrency startups and support its negative image.
How Weld solves it
How does Weld plan to overcome these difficulties? Firstly, it’s worth noting we are entering the CIS and Eastern Europe markets, where the niche of cryptocurrency payment card services is unfilled still.
We are entering the markets verging the adoption of cryptocurrency market regulation. Particularly in Ukraine, the relevant bill is already being prepared for parliament debate, while in Russia, the ‘Digital asset law’ has been implemented since January 2021.
The Weld service offers seamless cryptocurrency payments technology reducing fees that don’t depend on market fluctuations and blockchain conditions.
From the point of view of the client service, Weld offers a simplified KYC/ALM procedure and the ability to connect multiple wallets for various altcoins and stable coins, as well as reliable key storage and clear security procedures. This turns our service into a so-called super app, similar to the designs of Binance and mentioned above PayPal. In the coming years, the development of such apps will be the dominant fintech market trend.
For their part, investors get a clear white-paper and road map, which are fully implemented according to the stated deadlines.
Weld offers a clear token distribution plan. Сommunity participants and early investors have the opportunity to make a 25% profit. We are actively preparing an IDO to attract institutional investors, scheduled for October 2021. In 2022, a listing on key trading platforms is expected, which will be supported by a wide range of retail investors.
A broad partnership and integration with the traditional finance industry provide project protection from cryptocurrency market volatility.
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