Cryptocurrency analyst. Founder and editor at btcpeers.com
For a while now, the fintech sector has taken center stage as consumers are flooded with thousands of tools looking to finetune the way we execute banking processes and communicate with financial institutions.
Earlier this year, KPMG reported that the sector attracted over $135.7 billion worth of investments in 2019, which is just shy of the figure recorded in 2018.
As such, there is no doubt that the quest for introducing and implementing infrastructures designed to fit into the growing demand for speed, inclusive, transparent, diverse, and cheap financial processes is in full force.
However, regardless of this narrative and the billions of dollars invested into enabling it, the fintech sector still reeks of some of the limitations attributed to the traditional banking processes it looks to replace.
For one, there is no real attempt to ensure that transparency serves as the bedrock of the operations of fintech tools or companies.
For instance, the crisis that rocked the German financial landscape in the form of Wirecard’s insolvency proves that the emergence of fintech does not automatically eliminate the age-long deficiencies of the banking and payment sectors.
Although it has become easier to access and transfer funds, the intermediate-based architecture prevalent in the traditional banking world still governs these systems. And so, the cost for executing such processes remains on the high side, especially when it involves cross-border payments.
The same sentiment applies to the restrictive nature of fintech-based transactions as regards the geo-selectiveness of such systems. Hence, there is a need to reimagine the current models for fintech infrastructures and, if possible, reinvent them to fully capture a dynamic and robust architecture suitable for current financial demands.
Fortunately, we have few entities aligning their businesses and operations towards this singular goal. One of the companies that meet this criterion is Crypterium.
By infusing the censorship resistance, and transparent capabilities of cryptocurrency with traditional banking infrastructure, Crypterium is currently carving out new paradigms that can reinforce all of fintech’s core values. Already, this platform has introduced a two-pronged solution framework that appeals to both new and experienced crypto participants.
One the one hand, crypto holders, who had previously had to rely on rigid crypto payment platforms, can now access various avenues to spend, transfer, and exchange their cryptocurrency.
On the other, newbies have access to easy-to-understand user interfaces suitable for seamless convergence of traditional bank features and advanced crypto functionalities. The seamlessness of this crypto gateway has endeared it to a growing community of over 500,000 users.
Besides, it has just introduced a new payment card — the Crypterium Card VISA Edition. This product is an alternative to Crypterium Card UnionPay already used by 30,000 crypto holders in over 150 countries.
If Crypterium continues on this upward trajectory, then chances that its native token, which is integral to its crypto gateway infrastructures, will follow a similar path.
In light of the compelling narrative surrounding the emergence of this startup, I decided to interview Steven Parker, CEO of Crypterium and a former Visa executive.
During this interview session, we explored the current state of the fintech sector, the impact that the budding crypto industry has made thus far, and how Crypterium became a dominant player.
Andrey Sergeenkov: You have amassed a ton of experience working with some of the most established names in the fintech sector. What do you think of Crypterium’s progress so far?
Steven Parker: It is very important to put all of our progress into perspective. Cryptocurrencies are still very much seen as the future of money, but it has become clear that, for the moment, they need to fit into the existing global money infrastructure - they cannot easily break the status quo and they can benefit from existing network effects. In short, “if you can’t beat them, join them.” Since I started with Crypterium at the end of 2018, I believe that our own progress has been remarkable. Within a little over 18 months, the service has gone from a good-looking digital wallet that provided a few essential features into a truly convenient, all-in-one service for cryptocurrency holders.
Now, our customers can store, buy, cash out, exchange, transfer, and even spend cryptocurrencies from a single, very easy-to-use platform.
Andrey Sergeenkov: Do you think fintech has done enough to alleviate the pain points associated with legacy banking systems?
Steven Parker: The traditional banks have been through a tough period in the past decade or so. This has been partly due to the economic crisis and regulatory backlash that followed but, then, also from some of their own errors, for example, mis-selling products like personal loan insurance. They are also unwieldy institutions, often brought about through years of mergers and acquisitions. As a result, we see banks applying overly restrictive customer practices, with products and processes hampered by aging, complex and inflexible IT systems. It is therefore no wonder that customers are turning to a new breed of challenger banks and fintechs.
One of the things that I love about today’s fintechs is that they are extremely customer-focused. And because they are not burdened by legacy IT systems and are often mobile-centric, they can build processes around the customer experience. Fintechs are either replacing traditional players or forcing them to improve their services and product offerings.
Andrey Sergeenkov: You could have chased a different path when you left Visa. Why did you make the switch to the crypto world?
Steven Parker: The jump was not immediate, there were a few steps in between, but I love the thought of being part of such a potentially world changing phenomenon. I have also spent my working career trying to make managing money easier for consumers – that has been my passion. Despite the idea of digital money being criticized by media and politicians, over the past decade, I honestly believe that digital currencies are the future. Otherwise, why would the International Monetary Fund suggest that central bankers adopt and implement so-called Central Bank Digital Currencies (CBDCs)? Cryptocurrencies are a great way to democratize financial services and break out of the constrained “account-model” paradigm. Digital currencies allow anyone, with just a mobile, to access and control their money – financial freedom - and avoids them being forced to deal with big, cumbersome institutions such as banks. Cryptocurrencies and digital money can help do that.
Andrey Sergeenkov: What’s your thought on the push for a cashless society and how crypto may or may not have capitalized on this trend?
Steven Parker: I wouldn’t say the concept of “cashless society” is a trend, but rather the future. Some countries, like Sweden or Norway, are expected to go cashless by 2023. However, developed countries represent only a small part of the world. Back in 2018, the Central Bank of Brazil released a study showing that half of the country still gets paid in cash and 60% of businesses don’t accept payment cards. The question is: why such a difference? I believe that it all comes down to the availability of financial services.
In Brazil and other developing countries, accessing a bank account can require multiple documents and takes a considerable amount of time. Moreover, basic operations like account opening, balance checks, and even withdrawals happen face-to-face in bank branches. That’s incredibly inconvenient, especially for those that don’t live near big cities or don’t have access to all the paperwork to identify and validate themselves.
Cryptocurrencies offer high-quality services, without all the costs of bureaucracy. For example, the Crypterium Wallet allows you to send money to anyone using just the recipient’s phone number. And the best part? It’s a zero-fee service. No need for a bank branch, no need for Western Union, all done in seconds, just with any smartphone.
Andrey Sergeenkov: How has global health pandemic affected crypto fintech? Has it spurred growth?
Steven Parker: The world did not know how to react to the pandemic. We have had very different approaches from different countries, with mixed success. We had a market crash and then rebound. And cryptocurrency was no different. It followed a similar cycle. But what I think it has proven is that cryptocurrency is not a “bubble”, as some people were predicting. A bubble would not survive the past 9 months. In fact, digital money is stronger today than it was pre-pandemic. So, at the very least, crypto has proven that it is here to stay, and that it is a realistic alternative for the storage of wealth - a form of digital gold. In fact, with the massive monetary stimuli around the world, crypto may be a better place to store your money, in the longer term, than traditional “fiat” currencies which will ultimately be inflated and devalued.
Andrey Sergeenkov: One of the major stumbling blocks for crypto fintech solutions is the onboarding and payment bridging processes for new users. Can you explain why this has remained a hurdle? Has Crypterium been able to tackle this challenge?
Steven Parker: Indeed, traditional and cryptocurrency infrastructures have been built somewhat in parallel. I believe that there are three paths that money innovation can take. The first is to take an existing well-used solution and add a layer of value to it. PayPal is a perfect example; it saw an opportunity to use the existing payments infrastructure, for example clearing systems and cards, and use them for more convenient payments. The other extreme is to introduce something completely new. Alipay and WeChat in China have proven that this is possible. In less than 10 years, their QR payment apps overtook all other forms of payment in China. Anyone can now display his own QR code for payments. There are a few companies in crypto that have tried this path, for example they introduced their own payment terminals. But this is “reinventing the wheel” and adds no value. The final option sits between the two extremes. A brand-new solution that integrates with the old-world infrastructure. That is what most cryptocurrency companies, including Crypterium, have attempted to do. And we have made great progress in the past couple of years. When Crypterium first launched, it faced resistance from every avenue, including the card schemes. But that is changing with both Visa and MasterCard now embracing crypto players. Now Crypterium can provides a “best of all worlds” solution. It has all the benefits of cryptocurrency, such as near-instant transfer of money to anywhere in the world, coupled with the ability to use that cryptocurrency in an everyday environment by using the existing payments infrastructure. I therefore believe that the gap is being bridged and may disappear completely.
Andrey Sergeenkov: Apart from enabling a seamless crypto onboarding user interface, can you tell us more about the functionalities distinguishing Crypterium’s offerings?
Steven Parker: The Crypterium Wallet was designed from scratch to provide a seamless experience to our customers, enabling them to manage their digital finances from a single-access platform. I think sometimes we gloss over just how good our solutions are. For example, any of our users can send their cryptocurrency to any Visa or Mastercard anywhere in the world, often within just minutes, and when it arrives on the card, it does so in the card currency. Or our ability to send cryptocurrency to any mobile phone number anywhere in the world in the same speed as a text message. Ping, and the money leaves your wallet and arrives on their phone. For almost no cost. The person receiving that money can instantly spend though the Apps payment features, including an instant allocation to their Visa card. Our users can send or receive a payment in cryptocurrency, from anywhere on the planet to anywhere on the planet, within a minute of requesting it, and one minute later they can allocate it onto their own personal Crypterium provided Visa card and spend it in Starbucks, right away. This is amazingly convenient, and these types of service are just inconceivable with traditional players.
But not everybody wants to spend money, some want to save or speculate, and for those customers we provide a purpose-built exchange function that finds the best rates on the market, and within the coming weeks, we shall provide a service to let people earn interest on their cryptocurrency balances.
Andrey Sergeenkov: You recently launched the Visa edition of your crypto card. How does that play into the startup’s long-term goal as a major portal for crypto payments?
Steven Parker: A global currency without national boundaries needs a global payments solution. We can do that within the crypto eco-system but many people still want their own national currencies. This means that we have to bridge the gap between crypto and traditional “fiat” money and the best way to do that is via a partnership with the world’s leading payment institutions, and Visa is clearly on that list.
After long negotiations, Crypterium has recently become an official “fast-track” partner of Visa — a partnership that enables us to create such a unique solution. Technology aside, the greatest thing about this card is that it is absolutely free which is completely aligned with our long-term goal to lower the entry barriers for anyone to be able to access money and payments.
Andrey Sergeenkov: Do you think that, at a point, crypto banks must do away with all intermediate entities and processes? Or will such a move limit the availability of crypto cards, since mainstream adoption seems to be the unifying goal?
Steven Parker: As I mentioned before, the path to change is possible. Alipay proved that, but right now, integration with traditional systems is necessary. After initial hostility towards cryptocurrency, financial leaders, international monetary policy makers, regulators and even major banks are starting to adopt it as part of their portfolio. But it has not yet had a “Eureka!” moment - that point when it stops being a niche and turns mainstream. I thought Facebook may have been that moment, but that project has been greatly diminished. Maybe Telegram could have been it, but they have fallen foul of US regulators. Nevertheless, I remain confident that a game changing moment is out there somewhere and when it arrives, it will change the whole game.
Andrey Sergeenkov: How important is the CRPT token to Crypterium’s crypto payment gateways?
Steven Parker: CRPT is a utility token and it’s embedded into everything we do. We call it our “fuel”. Practically every transaction has a cost, even a simple transaction on the blockchain has a cost. Our token is our way of paying for those costs. Without it there would be no Crypterium. It is also a self-balancing mechanism since the more the Crypterium wallet is used, the more CRPT tokens will be “burnt” and become scarcer and therefore, in theory, more valuable.
Andrey Sergeenkov: I am particularly impressed with Crypterium’s mobile app and the fact that its design reflects the company’s business principles. Why have your company gone all out to deliver a premium mobile experience to users?
Steven Parker: At the end of the day, a cryptocurrency wallet is exactly that — a wallet. Part of our job is keeping the customers' money well protected. Educating our customers as much as possible and enabling security features such as two-factor authentication protocols helps a lot. A great user experience is also vital to ensure that our customers find the things they need to quickly and to reduce any risk of customers “pressing the wrong button.”
Andrey Sergeenkov: What are your expectations for the fintech sector for the rest of the year and what should we be expecting from Crypterium in the same timeframe?
Steven Parker: This may well be a hard year for fintechs with knock-on effects from the pandemic. The good news is that the era of frothy “unicorns” is over, for the moment. However, customers have initially retreated to “safety”, which means banks and with payment transaction volumes declining, due to lockdowns, some fintechs have lost their key revenue stream. As a result, fintech players with insufficient cash have had to scale back, such as Monzo. For those with plenty of cash, such as Revolut, they have stated that they are now looking at acquisitions, so we may well also see some consolidation. Very recently, we have seen fascinating new partnerships emerging between “fiat” and crypto players – such as PayPal with Paxos and Western Union moving towards Ripple.
For Crypterium, we are in a good place, with our new Visa card and other card projects in the pipeline. We shall continue to enhance our services with new features, such as savings, investments and lending, all close to launch in coming months. Once we manage all of that and coupled with all the great payment features that we already provide, our users will have no reason to use any other App and will be doing everything they need with us.
Whichever way, at Crypterium, we believe it’s going to be an exciting time and we are happy to be pioneers in this exciting new financial world.