XPOS® Merchant: Offchain in Korea adopts crypto payment to get ready for the post-COVID world
Located in Northwestern Seoul, the trendy Mapo-gu district is known for its hip and quirky vibe, owing to the high concentration of colleges and universities housed in the area. It’s in Mapo that you can find anything from Bohemian boutiques to late-night jazz bars with an offbeat feel.
Yet despite the area’s unconventional feel, one recently-opened cafe still managed to stand out.
This is none other than Offchain, a cafe that founder and CEO RHEE opened in April 2020 with the aim of seeing how the real-life usage of crypto payments has evolved over the years. In Offchain’s case, they’ve decided to do this by offering Pundi X’s XPOS device as a way to accept payment for their delectable cakes and coffee. As a point of sale (POS) system, the XPOS allows brick-and-mortar stores like the Offchain cafe to easily accomplish transactions in various cryptocurrencies and on the blockchain.
This case study will take a look at how Offchain has incorporated the XPOS into its day-to-day operations, how doing so has impacted their business, and the possible role XPOS may play in the cafe’s future.
After they started offering crypto as a payment option in mid-April, Rhee shared that one of the challenges they faced was first motivating customers to use it. Furthermore, customer response to the XPOS seemed to have been rather lukewarm.
According to Rhee, the reason for this doesn’t explicitly have anything to do with the XPOS itself, but rather a lack of awareness on the customer’s end regarding cryptocurrencies.
“They do not know Bitcoin,” said the CEO and co-founder about the customers, despite bitcoin being arguably the popular type of cryptocurrency there is. So there seems to be no information to expect [on how the customers would react to the XPOS].”
Offchain considered from the outset going with a regular card reader as their alternative payment method.
Yet what convinced them to eventually go with the XPOS was Pundi X’s experience moving in the world of cryptocurrency and blockchain.
“[We wanted to work with Pundi X] because it is the blockchain-based startup that entered the POS device business the fastest,” cleared up Rhee. “And because it will have many trials and errors and concerns first compared to other startups, we [also] expect that future development will be the highest.”
Rhee refers to the fact that Pundi X has already deployed XPOS in over 30+ countries. The company has also produced developments like the XPASS card which lets users easily transact cryptocurrencies with a card swipe and the XWallet, a secure method of storing said cryptocurrency, that both work adjacent to the XPOS.
Results and the road to come
Although it may be admittedly too soon for more concrete insights on how XPOS devices have fared at Offchain, there are signs that point to a better future up ahead.
Recently, the South Korean National Assembly passed a comprehensive bill to regulate cryptocurrencies in accordance with the global Financial Action Task Force. Prior to the creation of the bill, the government had only produced guidelines for cryptocurrencies and related service providers but no actual law had been passed. The bill’s presence paves the way for cryptocurrency to become fully mainstream in the country.
It’s worth noting that this bill comes on top of previous initiatives already pushing for mass adoption of cryptocurrency in South Korea. As recently as June of last year, the South Korean won was the third most frequently-used fiat currency for trading bitcoin, accounting for 6.5 percent of all transactions. A reported one-in-three salaried workers held investments in cryptocurrency and local exchanges.
In line with this, Rhee then believes that a better response to XPOS would come about if it were used in a business where large capital flows in one single transaction. They then recommend that businesses such as logistics or high-tax medicals look into incorporating XPOS devices.
“In the micro-pay market, without a significant discount, there seems to be not much merit for general users to expect a response,” they admitted.
Still, it’s possible that XPOS may help out in the cafe’s response to the COVID-19 pandemic. This is because the cafe may look into reducing the amount of contact between customers and staff, moving more into a non face-to-face cafe service that’s more about the experience than a simple kiosk. A device like the XPOS could greatly reduce the need for staff to interact with customers, amidst concerns that bacteria on cash may be spreading the virus.
This is especially important considering Offchain’s plans to eventually expand. Rhee shares that plans for a second store in Sokcho (another city in South Korea) are currently underway, and the company aspires to eventually open up throughout Southeast Asia in the next few years.
Offchain’s story is one to watch out for as cyptocurrency — through platforms like Pundi X’s XPOS — continues to grow and be further adopted by consumers.