Crypto Veteran. Tokenization, DeFi and Security Tokens - Blockchain.
The cryptocurrency market is registering an impressive growth year by year. With the rise of DeFi, investors expect next-generation wallets, payment processors with various services, catered to users at one spot. As the market expands not only in the B2C but B2B sector, startups must strategize efficiently and effectively. I sat down with Greg Waisman, Co-Founder, and COO at Mercuryo.io, a payment processing company, to discuss what makes a customer tick and what management should look at when expanding overseas.
Ishan Pandey: Hi, Welcome to our series “Behind the Startup.” Please tell us about yourself and Mercuryo.io?
Greg Waisman: Hello, and thank you for inviting me. I am a co-founder and COO of Mercuryo.io. The company was founded in 2018, but my passion for the fintech industry has a long history. I believe this is one of the most promising areas for tech startups and the technology industry. I may not be entirely precise, but the crypto market’s capitalization reached over $350bn showing 80%+ growth since the beginning of 2020. I have been in technical project management for more than ten years. Our current project is the quintessence of experience and skills in fintech, blockchain development, and crypto-economics.
The project is an ecosystem comprising fiat-to-crypto processing, crypto acquiring, a widget to buy, and refill the balance on exchanges and crypto wallets on Android and iOS. We have started by building an efficient fiat-to-crypto ramp infrastructure allowing instant fiat-to-crypto and crypto-to-fiat transactions. Then we have developed a B2B solution - a payment gateway integrated directly to an app/website of a crypto exchange.
Our customized widget enables users to buy cryptocurrencies via credit card in local fiat currency and transfer them to connected crypto exchange accounts or crypto wallets. We also have some other exciting prospective on the go and have plans to launch other multiple crypto payment products in the nearest future.
Ishan Pandey: As a European startup, what is your go-to strategy when it comes to expanding?
Greg Waisman: Ah, good question! Before expanding company operations, company executives should take stock of all resources, be it cost of capital, projected cash-flow, cash-outflow, assets, risks, and liabilities to provide management with actionable data to take actionable business decisions. The management must look at the market from a bird’s point of view. Managers need to ensure that they are getting both a macro and micro understanding of the market and its demographics to cater to its needs.
Slicing a small chunk of the market to yourself is crucial for surviving, and for that, companies need to identify watering holes that customers are looking for and then cater to those needs. The key is waiting and understanding what makes the customer tick. At the start, companies need to wait and observe. The best analogy for this is found in nature. A deer can survive in the open because his calories spent on grazing is less than the calories gained from consuming food. The deer is finding water holes from where it can quench its thirst. Just like that, a customer is looking for solutions that can solve the problem they face.
As a startup, you need to find these watering holes that customers are looking for and cater to that specific need. Wasting calories, aka money everywhere in the hope of catching a fish, will end in exhausted funds and disgruntled employees and investors. Yikes!
For example, as a European cryptocurrency payment processing provider, Mercuryo.io has over 150+ crypto projects in its portfolio, and it is now one of the leading crypto-fiat gateways in Europe. We have identified individual watering holes that convert potential users into customers with partnerships with enterprises such as Binance, TrustWallet, Bitfinex, Trezor, and OKEx. These watering holes can be anything from security, transaction fee, smooth interface to goodwill in the market. It all depends on the participant’s demographics, and that’s why these parameters must be identified. For example, due to the KuCoin hack, security and trust can be a watering hole that customers are looking for in the cryptocurrency exchange market.
I believe that any expansion should be of mutual benefit to both the company and the target market. Without adding value, the development will yield significantly fewer results for everyone in the long term; the keyword here is ‘Everyone.’ For example, we believe that North American expansion will be of a mutual benefit to both the company as well as the market. As it will undoubtedly grow our clientele, it will also provide an opportunity for overseas customers to enrich their choices and quality of service.
So, here we can see that why giving value in the transaction is so important. i.e., because it ensures a mutually beneficial relationship as generally one side relationships hardly persist. The same goes for a startup. Providing value and understanding of the market is very important to expand and succeed.
Further, it is crucial to lead the market in thought leadership by providing your users with good informational content as a company and an individual. Educating the customers about the technology, risks, and further, companies can leverage thought leadership to transfer their vision to their customers – a win-win and critical step for a fintech startup. For example, a cross-border payments network enables businesses worldwide to send and receive payments for goods and services using cryptocurrencies regardless of the local payment method. To explain this, we have created a blog where we educate users about cryptocurrencies and how it makes payments more efficient.
Further, we also highlight the drawbacks that traditional payment systems suffer: such as transaction time, which is crucial for business in our instant and volatile era, and other disadvantages of costs and risks of failure. So, we highlight these risks and pitch to our potential customers in the most favorable manner promoting new standards in payments, cross-border payments, ensuring and promoting user protection and satisfaction, etc. Taking initiatives in the industry separates you from others, increasing your chances of success. The key is to step outside of your comfort zone.
Ishan Pandey: Is security a significant concern for cryptocurrency users?
Greg Waisman: This is so true, and it is good that you have asked this since cryptocurrencies themselves are a relatively new asset class. Cryptocurrencies require a secure payment infrastructure. That is what, as a startup, you should focus on. Complying with PCI DSS international information security standards means tight control measures surrounding the storage, transmission, and processing of data that businesses handle. The standard is adopted by VISA, MasterCard, AmEx. What else could be noted is that it should never be overlooked when we talk about security since this affects your overall performance.
Mercuryo.io, for example, has created excellent traction, demonstrating 20x volume growth in the last six months. I think that the reason for a crypto startup to become successful in providing reliable security for its users. Implementing clear policies, understandable terms of services, ensuring high latency of platform, and cyber-security are among other concerns that users face.
Ishan Pandey: Was the KuCoin hack inevitable?
Greg Waisman: It is not a secret that one successful cryptocurrency attack could bring hackers tens of millions of dollars in crypto funds. The unanimity makes it even more appealing for cybercriminals, even though KuCoin claims they identified the hackers. If we are talking about KuCoin case - attackers gained access to private keys for the cryptocurrency exchange’s hot wallets. The issue is a hot wallet infrastructure, which is what most exchanges are dealing with. Hot wallets, by nature, keep assets easily accessible by users. It enables them to execute trade “at a glance.”
On the other hand, exchanges gain trade commission, so they need to grow trade volume, and therefore it is in their interest to enable users to trade as much as possible. Sometimes what seems like a mutual benefit - is a significant risk. There are basics code reviews and penetrations tests to ensure that entry points for hackers are being checked in terms of risk attack prevention. Then there are technology updates such as 2FA, face verification, trigger/kill switches - that signal if larger transactions being executed. Some exchanges introduce multi-signature and insurance, but this also doesn’t completely solve the problem.
Ishan Pandey: What are your views on the DeFi?
Greg Waisman: If I remember, correctly I would quote Warren Buffett here, “The markets are designed to transfer money from the impatient to the patient.” (laughs). Well, I have both theoretical knowledge and practical experience in blockchain and cryptocurrencies, particularly closely I monitor the development of Defi and decentralized communities — I believe this is the future trend. There will be more modular protocol innovations in the future. It can be seen that currently, only a few geeks and big players are participating. A large number of retail investors who cannot directly mine have become receivers in the process of investing in Defi tokens on centralized exchanges. But I can assure you this will change because we are already witnessing another wave of capital inflows to defi projects. Defi has been very hot in recent months. UNI’s market value has exceeded 8 billion U.S. dollars one day, proving that the market highly recognizes the innovative importance of Defi blockchain.
Ishan Pandey: What advice do you have for new blockchain startups?
Greg Waisman: I believe if you are running a startup, you should think big and sometimes dream big. Do not focus on a small project that resolves a niche problem. If you copy a solution developed in one country and try to implement it in a different one, you will end up competing against each other. But to be successful, you have to be ready to face global competition. On the other hand, investors look at the team working on any given solution from my own experience. With tokens, it’s easy to incentivize other people to work for your startup. Many founding teams fell into the Initial Public Offer mindset since they wanted instant cash out from their startups. But this is not something you should be aiming for when you start working on your project.
Ishan Pandey: What new trends and challenges do you see in the future?
Greg Waisman: We have to admit the success of Neobanks that we are witnessing in the past decades. The Compound Annual Growth Rate (CAGR) for this sector now stands at 46%. Neobanks are entirely digital, cloud-based enterprise. They appeared in 2010, and current leaders, including Monzo and Atom Bank, were among the first of their kind to launch. Neobanks, I believe, will become a leading sector in the banking industry. Neobanks offer favorable government regulations, quick and convenient account opening, 24-hour banking support, and customer-friendly interfaces. But we also have to consider a scope of additional services available through Neobank’s platform, such as payroll, expense management, and automated accounting services. I believe it is the greatest challenge - to take the best practices existing in the fiat and crypto world and transform existing payment flows.
The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence by asking the right questions and equipping readers with better opinions to make informed decisions. The material does not constitute any investment, financial, or legal advice. Please do your research before investing in any digital assets or tokens, etc. The writer does not have any vested interest in the company. Interviewer - Ishan Pandey
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