Today, we will be looking at one of the hottest ICO’s of 2018, which has raised about USD$ 117 million through private funding alone.
PumaPay is a project by Decentralized Vision, a Cyprus-based blockchain firm, that aims to create a non-intrusive payment method for merchants using the blockchain.
What Pain Point does PumaPay Intend to Solve?
According to the Worldpay Global Payment Report November 2015, there were over 257 billion credit card transactions worldwide, comprising 77% of global commerce that year. However, the complex structure of the payment cards’ ecosystem is oligopolistic. As a result, infrastructural costs are passed on to merchants.
The introduction of Bitcoin, a peer-to-peer electronic cash system, was an attempt to create a modern online payment solution. However, it was designed to address trust issues and to optimize security, rather than catering to modern commercial use. In its current form, Bitcoin is unable to offer flexible processing solutions for many billing methodologies used today.
Currently, using cryptocurrencies to purchase goods or services requires a user to ‘push’ the payment to the merchant. This works fine for the most part, but in today’s day and age, there are many other types of billing that are not supported by crypto.
A good example would be subscription-based services, such as Spotify or Netflix subscriptions. While users may not mind paying the monthly fee, it is quite a hassle if they have to manually ‘push’ a payment out each month. They could forget, or not have the time, to renew their monthly subscription.
Spotify is a must-have for many music lovers! It would be devastating to have it cancelled because of a missed payment.
The result is that is that both users and vendors ‘lose out’. For vendors, they could lose income from willing, but forgetful, users. For users, it results in an inconvenient loss of service if they accidentally miss a payment.
PumaPay intends to create a beneficial ecosystem that is built from the ground up for the digital era. It will be as scalable, flexible and accessible as payment cards, but without their inherent flaws and disadvantages. It intends to leverage on blockchain technology to build up an ecosystem which is beneficial for both merchants AND consumers in terms of cost, flexibility and security.
PumaPay’s Unique Selling Point
PumaPay’s PullPayment protocol aims to do this by utilizing a new architecture of smart contract called ‘PullContract’. Simply put, the PullContract allows users to automate their cryptocurrency payments.
For example, a merchant can issue a ‘PullContract’ for a magazine subscription, which the user has to approve. The user can choose to approve the ‘PullContract’ option on a one-off basis or a monthly recurring basis. This gives the user flexibility with his payments: instead of having to ‘push’ the payment to the merchant every month, he automatically subscribes to the magazine until he chooses to cancel it.
The convenience of credit cards, without the extra fees? Yes, please.
This protocol is not just limited to fixed payments per month. Let’s say a user is charged by the hour for a service. Using PumaPay, the merchant can ‘pull’ the correct amount from the user at the end of a specified time period (e.g., weekly, monthly). This flexibility ensures that all kinds of services will be able to benefit from blockchain technology, rather than being constrained by the billing limitations that current cryptocurrency offerings have.
The PumaPay Wallet
PumaPay is currently developing two versions of the Wallet: a mobile application (first for Android, then for iOS), as well as a Google Chrome-based application which will be similar to Metamask. Its simple to use, and does not require the user to have any knowledge of cryptocurrency.
Through it, the user can execute actions on the blockchain. The wallet can be used to facilitate payment between accounts, submit and approve PullContracts, show pending and previous transactions, as well as display the user’s account balance. To date, the wallet supports all ERC20 tokens, and is poised to provide further support for other cryptocurrencies.
In order to develop the ecosystem, the team is developing a prototype third-party extension service called PumaPay Pride within the wallet. It is envisioned as a hub where users can search for businesses that have integrated the PumaPay Protocol and accept the PMA token as a means of payment.
This will increase their exposure to PumaPay users and customers, offering them an advantage over their competitors. Rather than having to search laboriously for places to spend their PMA tokens, users are provided with a collated list of vendors, and they can choose from there.
Partnerships and Collaborations
PumaPay’s collaborations include famous entertainment companies such as FashionTV, Backpack, and various adult entertainment companies. These are large industries that require flexible payment methods, and PumaPay will gain a large boost by partnering up with companies that have a large, existing clientele whom have a use-case for the PMA token.
In conclusion, PumaPay has been progressing leaps and bounds since it’s ICO and the rapid growth of the merchants and cryptocurrencies supported will only benefit the users on the platform. Its novel billing protocol adds much-needed flexibility to users for customization of subscription and one-off payments, while also lowering costs and restrictions that merchants face using more traditional payment infrastcutures.
With it’s strong technical development team and clear vision for a digital future, PumaPay is a strong contender to be the top solutions provider for merchants and users alike.