MinexPay Operational Update: What’s next?
We’ve been working on our MinexPay crypto-card project for a while now and we would like to give you an update on what we’ve accomplished over the past time from the operational side. In this post we will mainly focus on our relationships with partners and the difficulties the project has faced in terms of looking for partners. We will also outline the operational milestones that we’re going to reach with MinexPay in the near future.
The Long Road to Finding a Partner
We started negotiating with potential partners and service providers for MinexPay back in the spring. This is a more time-intensive process than you can imagine. Even if we’re just talking about the partner we ended up deciding to work with, we spent over two months in negotiations before starting to actually work on the project. We weren’t surprised by this — there were an awful lot of conditions and nuances to check, balance, and approve.
The project faced the following difficulties while searching for partners:
They stopped listening when they heard the word “cryptocurrency”.
Many of the companies we talked to ended the discussion as soon as they realized that the project was somehow related to cryptocurrency. For them, cryptocurrency is still an entirely new thing, and not many companies in the conservative financial world have had to deal with it yet. After all, this isn’t just another risk for them. It’s a risk that they’re not able to estimate, i.e. an unacceptable risk. But we got through it.
Because of the undetermined legal status of cryptocurrencies, it can be tough to find appropriate jurisdictions and combine them into a single operating service. It’s also hard to determine the legal field in which to conclude agreements and conduct all future activity of the card service. The legislation in some jurisdictions is just absurd. Get this: a jurisdiction will determine the legal status of cryptocurrencies and implement laws that allow companies to license their crypto-related activity. But not one bank in the same jurisdiction (i.e. the entire country) allows the same company to open an account in which to do business! We’ve already had to deal with a couple of jurisdictions like this.
On top of that, in some jurisdictions partners have no right to issue cards to international customers — and this even applies to fiat cards!
Because of certain facets of crypto-card projects there is a range of technical requirements that need to be done only by the card issuer in order for the service to operate at all. Try to imagine how hard it is to find a reliable partner who not only agrees to discuss a crypto-related project, but is also willing to adjust its systems to meet to the needs of the project. And then there’s the complexity of these technical tasks and their long approval process, with lots of bureaucratic procedures, cost inefficiency, and massive development time frames. This is what differentiates software development in the financial sector from any other field.
It’s no secret that the higher the risk a project has for partners and service providers, the higher their commissions will be for this project. But you wouldn’t like having to use a card with, say, a 10%, 15%, or 20% transaction fee, would you? Of course, you wouldn’t, and neither would we. That’s why our criteria for choosing a partner were extremely strict. As a result, the number of partners that met our standards was very small. There are numerous reasons why 80% of the partners we considered were declined or refused on their own.
We are negotiating with several card issuers. To answer your questions in advance, we want to focus your attention that the card issuer may not necessarily be a banking institution.
A bank contract is a possible way to provide customers with a popular payment management tool, but not the only one. Other financial institutions, such as credit unions or payment service providers (PSPs), can work with Visa or Mastercard directly as well. For example, Visa can serve any company that services third parties’ accounts legally. Thus, we explore different directions to find a convenient solution for MinexPay’s customers.
We plan the following:
- to finalize the Minex Web Wallet according to the public test results;
- to find an agreement among the potential card issuers;
- to work out the legal aspects;
- to prepare cards delivery to customers;
- to finalize funds transferring issues to ensure service operates smoothly;
- to test all of the system’s integrations and the first cards internally;
- to deliver the first cards.