7 Questions for PayPlus+: The power of Smart Contracts & API’s, The choice to launch an ICO and why the ICO Industry is a bit like that old movie ‘Home Alone’
Payplus+ is an open blockchain ecosystem, based on multifunctional APIs (application program interface). The company aims to lead the evolution towards the cashless economy and become the flagship of the global digital application transaction industry. I sat down with PayPlus’s CEO Roberto, and Co-Founder Nicola, to better understand the choice to integrate blockchain Technology into their existing payment processing services and why they’re launching an ICO.
Douglas: PayPlus+ as a company offers a range of payment processing and accounting services. From my perspective your focus is on delivering an ‘ecosystem’ of Fintech services — Would that be an accurate description?
Roberto Piroddi, CEO: Yes, that’s a great perspective, but we see PayPlus+ more as a cloud ecosystem delivering secure multi-channel application transaction gateways, including digital payments for e-commerce and mobile POS Payment to corporates clients, stores, online-banks etc. for deploying services and products online. The ‘PayPlus-ecosystem’ grants online transaction credit for quick and safe payments, for every type of device which our corporate clients and their customers may use.
Our system can be integrated within a few days and is managed with customized templates: With PayPlus+ our corporate client and their customers can process a payment from the web selecting a preferred communication channel and protect the processing data (we are certified and comply with the Payment Card Industry Data Security Standard, operating at the same security-standard as a bank with over 50 mil. application contacts)
Douglas: What really stands out for me is that you’re not just a “white-paper with a vision”. PayPlus+ has been a payment processing company for some time now, with a proven track record of both clients and growth. Now you’re integrating token functionality and launching an ICO.
Walk me briefly through how you arrived at the decision to take these steps?
Nicola Facciorusso, Co-Founder: The PayPlus+ ecosystem has been operational for 2 years, while its mother company YourVoice have been operating with other IT services for over 20 years. We decided to bring PayPlus to the next level by tokenizing transaction securely stored on blockchain. We currently handle 25 mil euros and 5mil payment transactions annually. With this evolution we will handle all kinds of application transactions in cloud.
The present status of centralized payments systems gives reasons to blockchain players like PayPlus+ AG to lead the evolution of the cashless economy.
Our goal is not to be a local hero, but become the ‘lighthouse’ of the global digital application transaction industry within a few years through our existing innovative business solutions for corporate clients built on our own ecosystem.
PayPlus+ creates network capacity and opportunities for easier digital application transaction payments, which did not exist before. PayPlus+’s new marketplace is also open to power applications, provided by other Developers of new business solutions addressed to corporate clients who really appreciate such an opportunity. Thanks to this proven ecosystem the corporate customer base of PayPlus+ will benefit from the open Protocol developed on the decentralized Ethereum Blockchain, using ERC20 compliant tokens to run intelligent applications for their own customer transactions
Douglas: Your choice to integrate blockchain technology — I know it was not motivated by ‘Hype’. What were the key operational & sales reasons that shaped this decision?
Roberto Piroddi: ‘Why blockchain’ is easy to explain. Actually we have enabled the functionality of the PayPlus+ ecosystem on Ethereum ERC20, the most reliable network able to support decentralized applications, which can be shared and regularly enriched by external Developers with new applications. All existing centralized payment systems do not have the same high secure, faster, transparent, extendable and less-costly business profile as of a payment gateway provided by the Ethereum blockchain with an extended network capacity to develop new applications. Corporate clients appreciate these new but pivotal aspects and are willing to pay for validated safe transactions without the errors usually generated by the interfaces of centralized intermediaries.
Douglas: Smart contracts in particular appear to be a key focus in your 2019 roll-out plans. How do they empower your business services, particularly on the payment processing and accounting side?
Roberto Piroddi: Digital payments in Europe for e-commerce and mobile POS transactions are expected to increase their number and value from 2017 to 2022 by 69% to €900m, significantly influenced by the payment behaviour of using mobile devices. In such a unprecedented environment PayPlus+ will compete with centralized payment systems offering corporates customer a developer-friendly API ecosystem based on the smart usage of cross applications, where the client can use the same application with true functional value for different kind purposes.
Smart Contracts, and in particular the API market is gaining momentum and could rise to a $1.2 trillion market generated by 20 billion devices transactions, according to what mulesoft.com has forecasted. PayPlus+ is aware that API transactions can generate a significant source of revenue, especially when you know where and how to apply them for the ever increasing needs of our customers.
Douglas: As you well know, payment processing services, especially within the Crypto market, is a rapidly expanding and very competitive (albeit iterative) Sector: What’s your personal appraisal of the market currently, and where do you see it heading down the line?
Roberto Piroddi: Due to the different needs and purposes of corporates clients and their customers for multichannel payments and methods, such as one-time payments, pay-as-you-go, subscription, pre-paid packages and deferred billing, there is massive potential for the FinTech and blockchain ecosystems to offer a variety of solutions in different industries such as financial, consumer-retail, telco, media, utilities and e-commerce services.
Douglas: I’m keen to know your stance on ICO and token regulations and in particular, how it applies to the Fintech sector?
Nicola Facciorusso: A serious problem in the blockchain industry today is the fundraising-market, overwhelmed by mostly illiquid traded ICO who exist only as concepts on a Whitepaper, supervised by ‘some’ financial authority somewhere in the world.
Token buyers do not pay attention to the feasibility of those theoretical concepts, they ignore simple investment-criteria regarding existing and/or potential fundamental data, and they believe that a security token is better than an utility token only because a security token could give some dividend. How they can do that without many of them achieving any profit for years is another story!. Token investors also believe that the supervision of a financial authority ‘somewhere’ gives them ‘protection and rights’ in European jurisdictions — without 100% knowing that those rights are not really valid in the EU and definitely not in Germany.
This is an alarmingly poor level of market-quality, which is reducing the market acceptance of tokens as a financial product among institutional investors who are scared of the confusion and inconsistency of most traded ICOs. Last but not least, security tokens are a controversial example of tokens being subject to the regulations of a centralized financial authority, when the key-message of blockchain is just the opposite, namely the decentralized, unregulated use of the blockchain. Structurally a security token does not offer anything really different to a share listed on stock exchange, so nothing disruptive actually.
However, utility tokens offer what stock exchanges cannot give, namely the purchase of rights to use or trade as value of predefined services — that is decentralized and disruptive.
Douglas: What would your advice be to other established companies, Fintech or not, pondering an ICO and/or integrating blockchain technology?
Nicola Facciorusso: Whether a mature company or a start-up, both should reflect about the effective need of blockchain for their own business model: Will this technology better facilitate their internal working processes and improve the quality of their business?
Pivotally important on the road to preparing and executing a professional ICO is to select the right professional partners.
For KYC/AML we naturally chose Fractal, which enables us to focus on our business — saving us a lot of time as they take care on the critical launch processes like KYC and AML as well as the regulatory requirements.
Unfortunately the ICO industry is crowded by too many players with limited experience of financials, balance sheets, capital markets or existing operative business of ICO candidates. The results of this lack of competence are visible in the current chaotic environment in the ICO markets — despite the unprecedented technological value of blockchain when implemented in the working process of all industries. The current ICO market does not accurately reflect the technological evolution provided by blockchain technology to the world. The market acceptance of ICOs by smart investors (usually willing to invest billions in brilliant business cases) is still significantly limited (but growing)
I sometimes view the current status of the ICO industry like the old movie “Home Alone”, with the 9 year old Kevin alone after his parents left him behind after going on holiday, with the young boy living in chaos.
This seems exactly what is happening in the ICO industry currently: a luxury apartment in a fantastic city (blockchain Technology) and a 9 year old boy causing chaos (the ICO-market: with too many ‘Kevin’s’ playing Wallstreet 2.0).