CrayPay and it’s Token, CrayCoin, are the Answer to Crypto Acceptance
By the end of 2017, the global cryptocurrency market exceeded $700 billion. Cryptocurrencies, or ‘Coins,’ such as Bitcoin and Ethereum, were up 1390% and 8981%, respectively, and had already produced millionaires in their explosive wake. Traditional equity firms had started to take note of this newer investment vehicle, known as the ICO, or Initial Coin Offering, in hopes of securing their own large returns.
Notwithstanding the mad frenzy to invest, the cryptocurrency market has been plagued with a couple of very large problems on its quest to be treated as a true currency. Though over two hundred ICOs launched in 2017, adding billions into the market, the infrastructure to move it out is still nearly non-existent (emphasis mine). What good is a pile of currency, if you can’t spend it? Investors have been left to speculate on which cryptocurrency to buy, treating coin investments like traditional stocks and profiting from the arbitrage. Investors have sought out crypto exchanges without fees to maximize profits but have still been forced to exit to realize gains, lacking any real option to directly spend the cryptocurrency on goods and services. In spite of the current status quo, the crypto community is fully aware that merchant acceptance is the elusive puzzle piece needed to completely establish a legitimate cryptocurrency market, and the key to an entirely new landscape of possibilities. Limited acceptance, as challenging as it may be, is still only the first big hurdle.
Consumer demand drives merchant acceptance of payment solutions. That’s not new, folks. That pattern is historically visible in the beginnings of Visa and can even be seen manifested today with the spreading merchant acceptance of EBT cards. Simply put, where there is a money in the hands of the public, and little to no financial risk to themselves, merchants will line up in droves to accept whatever is presented as a form of payment. Nonetheless, this understanding does not preclude crypto from needing to overcome this as a second obstacle to market legitimization, precisely because cryptocurrency is not held by the masses nor is it likely to be so on its current path. Earlier this year it was revealed that Ripple, a coin with 28,963% growth in 2017, only had around 10% of its supply in the hands of the public! Further illustrating the stagnant state of crypto adoption by the masses, a recent report pointed out that even though over 75% of the population was aware of the existence of cryptocurrencies, only 4 percent of people who do not already own crypto intend to invest within the next 6 months! To add some perspective, just take a quick poll of your circle of friends and family. While it may not be 100% correct in every case, it’s a fairly safe bet that you are aware of at least one person who currently owns Bitcoin, Ethereum or some other cryptocurrency. Given the small numbers that do hold it, by extrapolation we know that the masses do not. This lack of crypto prevalence among the general population can only lead us to conclude that the current consumer demand for crypto spending cannot sufficiently tempt merchants into acceptance, nor is it likely to do so, especially in light of the inherent financial risks. In order for crypto to gain market acceptance as a legitimate payment source, there has to be a means by which crypto can be quickly placed into the hands of the masses, thus creating the requisite demand.
As if the first two challenges weren’t enough, true crypto adoption must also account for the user experience during a payment. Cryptocurrencies are based in blockchain technology, which has some pros and cons. Let's start with the good. With blockchain, we can imagine a world where contracts and financial transactions are protected from deletion, modification or user error because of how the data is propagated via consensus algorithms. That’s great news for reducing fraud and identity theft. With that security, though, comes the challenge of meeting current consumer expectations for the time it takes to complete a payment. Remember, that if crypto is going to be accepted as an alternate form of payment, it will have to compete with traditional payments, such as debit or credit cards, which take seconds to complete. Contrast that with the minimum 10 minutes to 1 hour wait time for a Bitcoin transaction. Can you imagine waiting at the register for even five minutes to complete a purchase? It’s a non-starter for consumers, and therefore a third barrier to crypto market legitimization.
A Viable Solution
CrayPay is the mobile payment and marketing platform that launched in Q4 of 2017 and is currently accepted at over 130 national brand partners, including Best Buy, AMC Theatres, Old Navy, Sephora, Lowe’s, and Outback Steakhouse. With over $100k in monthly spending, users are already adopting the platform as their go-to payment source. This is largely owing to CrayPay’s enticing value proposition, in which it offers to pay a percentage of every transaction at the time of purchase. It’s the ultimate in instant gratification! With its existing merchant network CrayPay’s ICO is poised to introduce the public to the CrayCoin, which is an ERC20 token on the Ethereum blockchain. CrayCoin is the solution that the crypto community has been begging to see arrive because it solves all of the major obstacles for crypto acceptance.
In order to promote cryptocurrency normalization, CrayPay will soon put crypto into the hands of anyone who uses the app to make a payment by distributing 10% of the retail purchase back in the form of the crypto token, CrayCoin. This will be an added incentive, on top of the existing percentage that is already being subsidized for the consumer with current payments. For the first time, cryptocurrency will be placed into the hands of the general public through CrayPay’s user base, allowing crypto to be earned simply by making a mobile payment. The simplicity by which it will be distributed rivals existing reward point programs, with which consumers are familiar, meaning most recipients will be looking to spend their ‘free’ CrayCoin just as they would redeem reward points. At current run rates, that’s over $10,000 a month in CrayCoin that can immediately be spent within the app. That’s a decent amount of spending motivation.
With over 50,000 name brand locations, CrayPay will accept CrayCoin as a valid form of payment for all purchases made through the mobile application. While some merchants may choose to accept CrayCoin directly, CrayPay can also continue to settle daily transactions in the local fiat currency of the merchant, as is the current practice. This effectively insulates the merchant from all financial concerns around cryptocurrency and allows users to spend their CrayCoin in exchange for goods and services. It completely removes the challenge with merchant acceptance in the current crypto community, making it instead a win for both consumers and for merchants.
CrayCoin is exploring solutions to overcome the challenge with delayed blockchain wait times. Some of the options being considered borrow from the existing patterns of transaction settlement that are currently employed by the major card associations. For example, one possible solution may be to utilize a two-part settlement protocol on the blockchain with an initial authorization to speed up crypto transactions times for the user, just as it does for current credit/debit card payments. This approach would allow a consumer to transact in crypto, but put a hold on the CrayCoin needed to complete the purchase until the transaction had sufficient time to be written to the blockchain. The hold is crucial in preventing a consumer from double spending the same CrayCoin on a second purchase. Even if the crypto transaction takes hours to settle on the backend, the user will have received the initial authorization in less than 5 seconds, putting crypto acceptance on par with debit and credit card approvals, and making it a perfectly viable form of payment.
Lastly, as it may be of relevance for investor due diligence, it’s appropriate to mention that CrayPay is in discussion with other Alternative Trading Solutions, such as Tzero from Overstock.com. The company current thinking is that the ability to earn and spend CrayCoin within the CrayPay app should normalize CrayCoin as a stable cryptocurrency, opening up possibilities for future growth and investment.
This email is not an offer to sell, or a solicitation of an offer to buy, any security. The offer of CrayPay tokens is being made solely by means of a confidential Private Placement Memorandum and only to such persons and in such jurisdictions as are permitted under applicable law. The Private Placement Memorandum includes risk factors and other important information for potential purchasers.