Alchemy Pay x Satoshi Club AMA Recap from 20th of August
Welcome to another episode of our AMA series. Today we are glad to tell you about the AMA session with our friends from Alchemy Pay, the pioneer of the world’s first hybrid crypto and fiat payment solution. The AMA took place on August 20 and our guests was John Tan, CEO of the project.
The total reward pool was 500$ and was divided into three parts. In this AMA Recap we will try to summarize some of the most interesting points for you.
PART 1, INTRODUCTION AND COMMUNITY QUESTIONS
Mary | Satoshi Club: Hello Satoshi Club! We are happy to announce our AMA session with Alchemy Pay! Welcome to Satoshi Club.
John Tan: hello @madamlobster thanks for having me. happy to be here to share with everyone what Alchemy Pay is all about.
Gold Rocket | Satoshi Club: Introduce yourself please. How did you get to be involved in crypto & Alchemy Pay? Tell us please about your position in Alchemy Pay?
John Tan: I’m the CEO of Alchemy Pay and have been with the project since the early days — start of 2019. Then, our products have not even been launched and crypto payments is still in its nascent stages where there are few actual use cases.
I came from a background of consulting across the technological and finance sectors, and not too long ago, I was a business development manager for a humble startup that pioneered mobile car grooming here in Singapore. I always thought that my client-facing roles and startup experiences instilled in me the importance of focusing on creating value for our end users.
Gold Rocket | Satoshi Club: What is the essence of Alchemy Pay?
John Tan: The focus on creating value led to voluntarily put myself into various departments, from products/operations/risk management/ compliance to ensure we can deliver a world-class product to our end users which are mostly businesses, developers and enterprises with huge merchant networks such as Shopify.
A short and succinct reply could be our mission — to bridge the gap between crypto and fiat economies. Alchemy acts as the bridge between the gap of crypto and fiat to drive crypto/blockchain usage. Be it in payments, investment or other sectors. our well-established hybrid crypto and fiat infrastructure empowers us to be that bridge.
Mary | Satoshi Club: So, you started to develop Alchemy Pay in 2019, can you tell us what are the most difficult obstacles you have overcome on the way to today?
John Tan: The constant challenge would definitely be regulatory environments. Crypto regulations have remained fairly grey in most markets and poorly defined. Fortunately, our founders have decades of experience in the payment industries and understand the kind of KYC/AML processes we need to collect from businesses we deal with in order to stay compliant. Additionally, we are well connected in this space — this allows us to either partner with someone with a license to operate, or acquire a license ourselves in a much shorter time.
Gold Rocket | Satoshi Club: Also we would like to know more about your team. Who is on the project team core?
John Tan: I’d share perhaps just a few examples since there are too many to list, but effectively, the senior leadership team members either come with a stellar background in the payment space or fast-evolving internet products. Our chairwoman, Molly Zheng, who was our last CEO has over 20 years of payment experience from PayPal, MasterCard and QFPay.
Our co-founder Shawn Shi, was the youngest ever VP from ZhongAn — which is one of the fastest growing insurance companies. They are acting as my strategic consultant and provide me with the networking we need to secure partnerships with industry giants like QFPay, Shopify, Binance, Huobi and more.
Q1 from Telegram User @andrey_seleznov
I’d like to learn more about your payment gateway and how it deals with price volatility that is an integral part of the crypto space. Crypto assets are volatile, some more some less but we are all too familiar with sudden pumps and dumps that can occur on the market in a matter of minutes. How do you solve this problem if conversion rate cannot be maintained during transaction processing time? Do you warn users beforehand and require acceptance that the price is not guaranteed? Or do you have your own pool that dampens the volatility and allows for a safe transaction completion at an agreed upon price? Or do you stop and fail transactions that encounter high price fluctuations and fall outside of the expected price range?
John Tan: This is an excellent question. This doesn’t just concern risk management (mitigating volatility) but more importantly, user experience.
If we have to wait for at least 1 block confirmation for a Bitcoin transaction, it will take at least 10minutes for the transaction to be approved. Poor experience for both merchants and payers = poor use case = low adoption.
Mary | Satoshi Club: So, you are telling that you have excellent speed?
John Tan: This requires us to be creative such as:
– work 2nd-layer solutions into our system, such as accepting Bitcoin over the lightning network
– selecting only strategic tokens to be accepted that has lower block times
– conducting direct integrations with wallets (i.e. Binance Pay) for instant transactions and zero gas fees
– preparing a pool of operating capital assets on exchanges to ensure the real-time liquidation. for example, 0.1ETH is received, instead of sending this 0.1ETH to exchanges to sell into USDT. We prepare ETH in advance on exchanges which is sold automatically via API integrations.
There are many more of such strategies but effectively, we need to place emphasis on user experience, otherwise, no merchants will want to accept crypto and no payers would consider paying with crypto.
Q2 from Telegram user @Karry1999
As Payment is one of the popular application areas of the blockchain, and many innovative projects have emerged. Can you give a brief comparison of Alchemy and Existing Blockchain Payment Platforms simple words?
How Alchemy meets the needs of large-scale commercial application and what are the payments and settlement modes of. Alchemy platform? Can you also talk about the product features of the platform?
John Tan: We’d like to focus on strategies as our main differentiators. Alchemy Pay focuses on the following: 1. Adding value to our merchants (why should they use our solution) — our hybrid model enables merchants to accept both fiat and crypto. This is important as merchants have reservation in just accepting crypto especially at this early stage of crypto industry. Many partners choose our solution because they can accept both fiat and crypto, and no matter the payment method — they receive their local fiat current in their bank account directly. This is made possible by establishing partnerships with exchanges, OTCs and global remittance companies.
2. Scaling fast (more merchants accepting our solution) — Alchemy has a top-down approach, meaning we work with only the best and largest industries no matter on the merchant side (QFPay/Shopify etc.) that gives us access to millions of merchants per integration, or the consumer side (e.g. Partnership with Binance with 60+M users, as well as other partnerships that we will announce in the near future). This ensures real world use cases are established quickly and reliably.
3. Low cost to use our service — Be it via an API, SDK, Plugin, merchant mobile app, businesses can easily access our service from anywhere around the world. If they want to use our payment system, they can do so by downloading the merchant app after conducting KYC with us. No need to purchase any devices. To give an idea, our handling fees are typically between 1–1.5% compared to 2%-3.8% for credit cards. We also pay out to merchants in T+1 to 3 while cards are T+7–14 to mitigate any cash flow problems to merchants.
Q3 from Telegram user @Jmagsss
I am very interested on one of Alchemy Pay’s feature which is the “Asset Certification and Token Issuance”, where Alchemy intends to provide certification agencies and token issuers assurance by helping the asset owners tokenize their assets, thus, improving both liquidity and tradability amongst buyers and sellers. My question is, does this feature works on both liquid and illiquid assets like commodities, stocks, cars, real estate and housing? Also, how would Alchemy pay verify and check if an asset owner really does have the certain asset that he/she wants to tokenize? Can you explain the algorithm for this feature?
John Tan: This is a VERY interesting subject — which explains why 2019 and 2020 STOs and security tokens have been hot topics. But regulations have been show stoppers for this revolutionary play.
It’s not as simple as algorithm, in fact, technical expertise is the easiest piece of the puzzle. Alchemy Pay’s team can easily work with asset holders to determine what platform to issue their tokens on. But we need other key partners in this whole flow — from legal, brokers, secondary liquidity providers (crypto exchanges/digital asset platforms), regulatory approvals before anything can happen.
Mary | Satoshi Club: So, you will use third party services?
John Tan: A quick overview of the flow is:
- 1. Deciding the jurisdiction, deciding of funds to be raised — a lot of legal efforts required here
- 2. designing the offer (structure of tokens/rights etc.) and representation of ownership of each token
- 3. Only now then you decide on the blockchain to use
- 4. Planning of secondary liquidity.
It’s a lot more complicated than this but Alchemy team has experience in capital markets-.
Hint: we are currently negotiating a real estate STO deal with a conglomerate as a consultant and technical solution provider. That said, its lengthy process which we need to proceed diligently. We will be leading the project, acquiring 3rd party professional services as required, and providing technical solution/advice.
Q4 from Telegram user @NataliyaKil
Your payment protocol rewards us and our customers with ACH tokens for every crypto transaction. So, please tell us about the reward programs for Alchemy Pay users. After receiving the ACH Tokens reward, how can we use it? Besides transaction rewards, what other ways are there to earn ACH Token? And what other programs do you offer to your community: a loyalty program, an Ambassador program or a referral program?
John Tan: At present, our incentive mechanism focuses on one main goal, actual usage and demand for our services (which require the pledging of ACH). Enterprises with merchant network are rewarded for scaling our merchant network size and contributing transactions on our network. These transaction requires fees to be paid, which can be done in ACH for a fee discount. We are currently building a reward system for our community that can help drive usage of our services. For instance, community members connecting us with payment companies or major brands with huge transaction volumes will receive ACH rewards. Stay tune to our Twitter for more information!
Q5 from Telegram user @Highpee
In order to facilitate smooth payment solution, you have released Alchemy Payment App. This app can function as a crypto wallet and users can use it to buy and receive crypto by registering with your email. However, some users have observed that despite the fact that this wallet app can be used to hold crypto, there is nowhere to access their seed phrase or private keys. Apart access to account password, why can’t users have custody of their private keys or seed phrase? Who is responsible for securing these sensitive data and how can users be assured that these information is in a safe place? What type of email do you support as I am having difficulty receiving OTP using my email address? And since am stuck at registration and cannot explore the app further, can you explain more about the game and reward system of the app?
John Tan: Great question! This is a good opportunity to clear up a common misconception — this sounds like a wallet app which we have put together for consumers. However, this is not the core offering. Our core payment solution is directed for merchants. For instance, once our integration with Binance Pay and Shopify are completed, Shopify merchants simply selects us as one of the alternative payment partners and can begin to accept cryptocurrencies without even having to understand how it works. We understand that our wallet app for consumers/investors require more work to improve user experience. However, all hands are on deck to ensure project delivery for our enterprise solutions. We are currently looking to hire more developers so we can allocate more resources to work on this wallet app — it will certainly be improved but we need to be mindful of our priorities. After all, organic demand for ACH doesn’t derive from our consumer wallets but the enterprise solutions.
Mary | Satoshi Club: So, in the future you can give your customers access to their pks?}
John Tan: With that said, some of you may already know this but we are working on a significant partnership now to build an infrastructure that can service retail and institutional investors. It will be a simple platform where both retail and institutions can access fast and easy access to crypto investment, DeFi yield products as well as traditional services such as ewallet and remittance services — all in a single app. Users do not even need to understand blockchain as we will make it easy to use with clear benefits stated.
As stated before, we want to drive adoption of crypto/blockchain. We need to target the masses that are not already in the crypto world. This will be happening if we provide direct fiat access and take out all the Defi/crypto/blockchain complicacies.
Q6 from Telegram user @Tony253210
One of the KILLER features of Alchemy pay is possibility of the DApps to pay with tokens Instead of assume the Gas costs, so How this can be possible?
John Tan: I think we have covered this earlier. Alchemy’s hybrid payment system can support on-chain transaction for ANY cryptocurrencies as long as we can find liquidity for it. That, however, is not the main consideration. It still goes back to user experience. therefore — integrating with major wallets like Binance Pay, 2nd layer scaling solution, blockchain analytics will be the way forward for us.
We’re very optimistic for our Binance Pay and Shopify partnership, connecting 60+M users to 1.75M merchants in 1 integration. We are truly driving a revolution for the crypto payment space.
PART 2, TELEGRAM COMMUNITY LIVE QUESTIONS
The chat was open for 120 seconds; a lot of questions were posted by Satoshi Club community. Our guest chose some of them.
Q1 from Telegram user @Ratash97
Alchemy support many fiat currencies so my question is how easy it is to make withdraws on local currencies and do we need to pass a verifications and is there a limited amount for withdraws?
John Tan: This is an excellent question. Alchemy relies on a global top B2B remittance partner (currently under NDA but will share once both parties approve it) to achieve this — they will take care of forex at near spot rate and be able to pay out to our merchants directly into their bank accounts. Since this is a B2B service, limits are set way above what we need. However, we need to do stringent due diligence when onboarding merchants/merchant networks.
Q2 from Telegram user @ Ronaldo_super
Who will be your next business partner? Do you want to make a partnership with Binance?
John Tan: The next partner will be a conglomerate that will drive our business in the Middle east region.
Q3 from Telegram user @hsyin1
Is it possible for you to integrate with global shopping platforms such as Alibaba and eBay?
John Tan: Yes. Our business pipeline is full for 2021 but we will try to expand our team and secure more deals. Of course, quality of our service delivery has to be top notch. While it will take more time for us to execute, we would rather ensure quality for our partners — this mindset is most likely we are able to secure partnerships with global leaders such as Binance Pay and Shopify.
Q4 from Telegram user @AaronBurn1
You mentioned your fees are between 1 and 1.5%. I work in the payments industry and know that there are many interchange rates that are higher than that. How are you able to offer rates that are below the typical interchange costs and still maintain profitability? Is it just offset elsewhere and you take a hit on the interchange costs?
John Tan: Glad to answer a question from a fellow industry mate, cryptocurrency payment and settlement flow is much simpler compared to the traditional payment flow for card payments which have many middlemen from card issuers, card networks, merchant acquirers, settlement parties, processors (and there’s a lot of back and forth between these players).
For a crypto transaction, it goes from Payer -> Alchemy -> OTC -> Remittance partner -> Merchant.
Q5 from Telegram user @xxxxxxxxx12112
Who are your potential customers what market are you targeting?
John Tan: I think this would be a good opportunity to shed light on our presence. It is true that we have capabilities to serve numerous countries in regions. For instance, we can go through a payment partner to provide crypto acceptance to a merchant in London. But that is not our strategy or what we are doing — it’s simply too slow. We have now built our capabilities, and carefully selecting partners that grants us the massive merchant network with the least amount of integration.
If we spend 1–2 weeks to integrate with conduct POS integration with a group of 10–20 merchants, we will take forever to scale our service adoption worldwide. In short — we build global capabilities then select global leaders to partner with.
Q6 from Telegram user @cindy_crypto
Crypto means freedom so why does you require KYC/AML processes from your users?
John Tan: If merchants are willing to accept crypto/stablecoins as settlement, it will be much easier from a regulatory point of view. However, merchants want to be paid in their local currency, into their bank account.
For that to happen, there’s conversion from crypto to fiat and usage of remittance corridors — this is when regulators step in to ensure licenses/KYC/AML processes are already in place. Regulations is inevitable. We might as well embrace it sooner so that governments across the world are comfortable with us delivering our services in their jurisdictions.
Q7 from Telegram user @nuralomyasir
I will invest in you. However, there are many fake websites or Page. So How can I recognize your website or page? Please share your website link.
John Tan: Our website is www.alchemytech.io
You may find more information on us as well as exchanges we are listed on via CMC: https://coinmarketcap.com/currencies/alchemy-pay/
Everyone, please beware of scammers — do refer to official channels such as our website and Twitter (@AlchemyPay) for legitimate updates and promotions.
Q8 from Telegram user @Kargil1999
How has Alchemy Pay deals with Governments Regulations & actions?
Have You partnered with any Local Govt to work at local level?
John Tan: There has been conversations with governments where Alchemy shares our regulatory experiences in mature/established financial hubs to help them put together their regulatory framework. There’s also discussion on how they can leverage blockchain and our payment system to mitigate frauds especially involving government grants — providing traceability and accountability and transparency from issuance to redemption. Of course — this may take time as governments do tend to act cautiously in the interest of the public.
Q9 from Telegram user @Korryl
what makes you different with other competitor? can you mention what makes Alchemy Pay special and why people should choose to invest in your project?
John Tan: Our hybrid model and top-down strategy. There’s no point in comparing which project has the most sophisticated protocol/tech stack.
Firstly: we are all peers and can learn from each other. If crypto adoption doesn’t take place because payment projects doesn’t drive use cases globally, EVERYONE (including investors) loses.
Secondly: if you must compare — the greatest indicator would be partnerships and merchant network count.
Q10 from Telegram user @Kathdm
I noticed that the motto of your website is “Be connected Globally”. Your mission is global. However, among the languages available on your website is only English. Have you considered adding other languages as well? In order to facilitate the use of the platform to users from different countries and regions. I understand that it may be difficult to add all the languages but have you considered adding the most used languages? for example: Spanish, French, German, Chinese.
John Tan: Thanks for your feedback Katherine! We certainly need to do better in helping our investors understand us (this AMA is one example!) — we will look into providing our materials in more languages to mitigate language gap.
PART 3, QUIZ AND INFO
As usual, for the third part, Satoshi Club Team asked the chat 4 questions about Alchemy Pay. A link to a Quiz form was sent into the chat. Participants had 10 minutes to answer. 300$ were distributed between the winners.
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