Blockchain as B2B Payment Infrastructure

Recorded at Proof of Talk, the Louvre, Paris.

Hodl Up: Welcome back to another episode of Hodl Up. We're here at the Louvre for Proof of Talk, and today with us we have Merita from CashXChain. Merita, first of all, thank you so much for taking the time to join us today and have this discussion. It's very refreshing for us to have you here, not only because you're one of the youngest founding members, one of the youngest people we've met in crypto and Web3, but also because you're Albanian. You're the first Albanian guest we've had on the podcast, and given that we're Albanian as well, I think we have a lot to talk about.

Merita: Yes, it's a big pleasure for me to meet you guys, and also to see the first Albanians at this conference, because usually I don't meet a lot of them at conferences. So it's a big pleasure to have this conversation with you. Right now I think I just represent myself. I'm a founding member of CashXChain, on the finance side. We are a payment provider, and we deal with B2B businesses, providing payments for them. In the back end we work with blockchain and crypto because it's more efficient for us. We work on-chain, and we do it multi-chain. Right now we are on stablecoins, because a stablecoin is the most stable currency. If we have customers, we want to secure safe payments for them, and if they transact their money to another country, that amount of money, that volume, should stay stable. In crypto we know the currencies can go up and down, so we really have to choose a currency that is stable. That's why we're staying with stablecoins, and it's also built on the Solana blockchain.

Right now we're meeting people, meeting other fintechs, and maybe cooperating with them, or with crypto providers. If you are in the payment or finance sector, you know that you have to be licensed, and licensing can be very expensive for us. So we try to talk to other people and make partnerships, because once we have the licensing we can definitely launch, take customers in, and they can use our infrastructure to make transactions all over the world.

Hodl Up: Crypto is being used by real-world businesses a lot right now, specifically because of stablecoins and, as you said, payments, because they're easier to make and cheaper. But who came up with the idea? How did you come up with the idea to integrate crypto into this really crucial part of B2B?

Merita: That's a very good question. My friend Valentin, who also founded this, said: "I have this problem. We're young, but we can solve this, because we have AI right now and basically all information is free." So we said, why don't we actually do something, because in the future we can profit from that a lot.

In the beginning, his father was selling drones all over the world, and his supplier was, I think, from China. His goods were getting shipped from China to Germany, and the problem was the payment process. Everything was very slow and very manual. He said his products arrived late because of the payments, and sometimes there were days of delays for a payment. The fees were also way too high. That was the main problem. If you use banks or Western Union, the fees are just way too high. It's not very beneficial, and it also takes time.

So he came up with a project that is actually very new, because this infrastructure doesn't really exist right now. We make a payment app, or infrastructure, that works with crypto and blockchain, because blockchain is very safe and we can secure our clients with something safe. We combined these two and made a payment provider, and that's basically how the idea started. It all started a year ago. Right now we are still in the development process, because it takes a lot of time, but we are talking to different people, and thankfully we had our first fundraise from an investor, so it's possible for us to do more, even if it's more expensive. For now, we're hoping to get in touch with a lot of clients and a lot of people we can partner with, and hopefully in a few weeks we'll launch and then it can be available for everyone.

Hodl Up: Well, congrats on the raise, first of all.

Merita: Thank you.

Hodl Up: While doing the due diligence for this episode, I saw some articles in German media saying that some teens are founding a company that is a competitor to PayPal. Being in the space for as long as we have, we have heard that story before. There are a lot of companies that come up saying they will outdo PayPal, or be PayPal with more benefits. So what I want to ask is, what makes you guys different? What makes you unique? What's the selling point that makes not just businesses but also retail come to you and not use your competitors?

Merita: First of all, because we secure them with real security. If something bad happens, we take responsibility. And we give them real benefits, like real time. If I'm sending money to you, it arrives in real time. There won't be any delay or anything like that. And it's specifically for B2B businesses. We work in the B2B segment, which is also something different. Later on we want to add B2C as well, so normal customers can also transact their money, but right now we want to make it as beneficial as possible for B2B businesses to send their money to other people.

That's why we're also talking to different people, to see where their pain points are, because we can't just decide where the pain points are. We have to talk to them directly and ask, "Okay, what is actually your problem?" For example, we had a conversation with somebody who was German and was buying something from Kenya, and he said the banks were just too slow. So we connected with him directly, and we're trying to solve this problem now. We talk to as many people as possible, and we're very flexible. If you have an individual business and you have a problem right now, we can be flexible for you. We can build something. We listen to you, we talk to you. PayPal is something very big, and they have a standard that's the same for everybody. They don't change anything for you. Right now we're really small, so we listen to everybody and we take notes.

Hodl Up: That's quite good to hear, because as you said, it's not one-size-fits-all. Everyone has different needs and different specifications, so it makes sense. But eventually you will scale and you will have millions of users. Will you be able to tailor to all of those businesses and retailers individually, as you do right now, or will you pivot into having different branches or groups that fit a particular area with particular needs? How would you navigate that?

Merita: That's also what our mentor suggested. We have to scale step by step. We're not going to launch and say, "Okay, we're available for everybody," because it would become chaos. It would definitely become chaos, and it's way too dangerous because it could damage our reputation. So right now we said we only move towards B2B. B2B is a large segment, and we can't underestimate that. So we have to go slowly: first reach them, launch with them, and be very approachable to them. Then, if we have successes, we can continue on to B2C and further and further, but I think that will take years.

Reaching B2B businesses is not easy, because if they already have something they are paying with, they just won't change. Most of them are a bit lazy about that, I would say. They don't see the benefits, they don't want to hear it, and we just have to approach them. Our idea was also not just to approach them, but to get people to come to us. For that, I think we have to work more in marketing and sales right now, and basically make our name bigger. As I said, we were in different newspapers, in Canada, in Germany, and in other countries. So I think a lot of people have heard that young teens can do something in such a big finance sector, because the finance sector is worth billions and trillions of dollars. Payments are everywhere, and we are a young team that just got into this. It's very scary for us, but it's part of the journey.

I think it turned out to be something good, actually, because a lot of people now see it as a very interesting experiment because we're so young. So our age wasn't actually as bad as I thought. I thought that because of our age, people would think, "They're not trustworthy, I won't trust them with my money." But actually so many people approached us. Investors approached us and said, "You guys are so young, I think it would be very beneficial for me to invest in you." So our age was actually a big plus.

Hodl Up: Welcome to crypto. It's a different world. It's a young man's game, and a young woman's game.

Merita: A woman's game, yes. No, but you're right, because the crypto and finance sector is absolutely male-dominated. But I hope I meet a lot of women who are also in this space and working in it, and I'm always open to that.

Hodl Up: There's this trend going around on crypto Twitter where everyone says we need more women in crypto, and even I recognize how women do make this place better.

So, as you said, with B2B, businesses and companies are too stubborn about changing their ways. I think that's the biggest problem when it comes to crypto going mainstream. But since you already got the funding and you're moving in the direction of B2B, I believe you're going to achieve that quite soon. What's the next step for you guys, let's say after you leave Paris and go back to work?

Merita: Our plan was to meet people we can partner with, for example crypto providers, because as I said, licensing is very expensive. It can go up to 500k, and right now we can't just put all the investors' money towards that. So we said we'd make it more efficient. For the long term, we definitely want to have our own license, because it is a status symbol. It's a safety symbol. If somebody knows you have a license, they can definitely trust you more. But we can also work very well with crypto providers who can give us that licensing, and that's our short-term vision. So we're talking to different people we can partner with.

Also on the technical side, if we see potential in people, like CTOs who manage this whole crypto and blockchain side very well, we can definitely partner there too. It's a very scary part when you're moving money from one place to another, and we really have to be very careful. If we have to move a volume of 1 million to another country, we have to secure it 100%. We can't get anything wrong, because then we are in debt. Then we have to cover that 1 million. Where does it come from, if we don't have enough revenue, if we don't have enough cash flow, especially as beginners? Big volumes are beneficial in some ways, because we get more revenue, but it's also very scary, because we have to be very careful. That's why right now we are reaching out to people who really secure the security side.

On the technical side, we are very proud that we have a lot of patents for our technology. It's a very individual technology, and that's also something our investors were really proud of, because they said, "If you guys have patents, you actually founded something new." Our technology is basically many different things combined together. It's not like, "I created AI," for example. We combined many different things that already existed and put them together, and it's like a whole bowl of many different things.

Hodl Up: It's a salad of technology.

Merita: Yes, yes.

Hodl Up: We said crypto is a young people's game, and believe me when I say we're tired of meeting all of these ex-TradFi guys who've been working on Wall Street for decades and have now pivoted into crypto because they feel they can extract more from their users as they turn 50. But believe me when I say that your answers feel much more PR-trained than those of all of these 40-year-old people we meet, because you've already answered something I wanted to ask. I wanted to ask how you are navigating compliance. So kudos for that.

Merita: Well, my team and I have been in the finance sector for over a year, and we still are. And I came up with the idea that we should also do compliance, because compliance is a very crucial part that is very slow nowadays, and I thought we have to change something. Why? Because every fintech needs compliance. Fintechs, PSPs, everybody everywhere needs it, but somehow it's not very efficient for most of them, because it's not new. It's still in the old times, and it takes weeks.

For example, I had this experience with my friend Valentin. We were waiting for the investor's money to get to the bank, and the problem was that we wanted to open a bank account in America, in Delaware. It was not possible because they were too slow. The compliance was way too bad. I found it so sad that I couldn't go to this blockchain week. So I said, I'm going to make a solution for that. I'm going to found a company that works specifically on compliance, on KYB and KYC, and make this flow better, because the market can't stop. As I said with CashXChain, we just want the market to not stop. We want it to flow like water, because if payments are not provided efficiently, things get stuck, and the same goes for compliance.

So right now we are really looking forward to making software that helps compliance officers make faster decisions and be more aware of what they're deciding. An AI that works specifically for that, and we combine it with open data sources. For example, there are open data providers that have free information about businesses, so we connected to them. We are trying to get the APIs connected to our software system, so that our AI doesn't just work as an AI, but also works with real data from real sources, and we can make more reliable decisions. For example, I give it the UBO name, the business owner, all the documents that have to be in there. There's onboarding and monitoring. If it's sanctioned, or if it's a country like Iran, for example, where dealing is not very trustworthy, the AI warns you and says, "No, this is not reliable, you should stop that," and it goes away.

Hodl Up: It's all about making data-driven decisions, right?

Merita: Yes.

Hodl Up: Speaking of data and data-driven decisions, I don't know how familiar you are with the current framework and regulation of crypto in Kosovo, but there's not a lot of hard data to look at. We recently published a report on crypto usage and adoption in Kosovo, and we tried to map everything that's out there. There's not a lot to look at, but sometimes the lack of data tells you a lot more.

Merita: Yes. I think in Kosovo there's a need for everything on the crypto side. I think our country is still very young, so as you said, there's a lack of everything, and there's not enough data. Kosovo wasn't really in our focus, even though I am Albanian and I'm very proud of that. It wasn't in our focus because we had to focus on countries that are on the sanctions lists, like Iran or Russia or other countries.

Hodl Up: This brings me to my next point, because while there's not a lot of data, there is a common theme, not just with Kosovo but with all emerging countries: they are heavily reliant on remittances. Maybe it's wrong of me to assume, but you and your family have probably sent money back home, right? And there aren't a lot of rails to do that at the moment. So integrating crypto and stablecoin remittances here would be life-changing for a lot of families, because they go through Western Union and all of these third parties that not only cost a lot more in fees but also take time to deliver.

Merita: Absolutely. As you mentioned Kosovo, I think when we move from B2B to B2C, our first real test case will be Kosovo, because I am Albanian. My team is very flexible. They don't really care, as long as it works. But I think it will also be very reachable, because if I say to people, "You guys are facing this problem every day. You're sending money to your homeland and you're paying fees," I think they will definitely be with me, and they will try it out. So I plan to make an announcement in Kosovo with the team, and also to the people who live in the diaspora, to tell them, "Now you have to use CashXChain, because it's more beneficial for you." A lot of people use Western Union, and I really don't get why they use it. But the problem is that Western Union is very friendly to immigrants, I would say. They take your money, and that's it.

Hodl Up: Exactly. It could be easier. In my opinion, that's exactly what we are also working on, because when people hear the word crypto, they're like, "Oh, no."

Merita: Exactly. Especially Albanians. My mom, when she first heard about this, was like, "No, go become a doctor or something. Don't be like that." But I said no, because crypto is not that complicated.

Hodl Up: Exactly. But people don't trust it.

Merita: I know why they don't trust it. You have to be very educated about crypto to not get scammed. That's why we secure it. We actually want to make it as easy as Western Union, for example, where you just go there, give your money, and that's it. When you use our infrastructure, there's your username and the username of the person or business you want to send your money to. They just get the amount of money in their wallet, and that's it.

Hodl Up: And they don't even realize it's happening on-chain.

Merita: Yes, because it's all in the back end. The front end is made so easy, because that's what we tried to do. Of course, a lot of businesses could do it themselves. They could move money on-chain themselves, why not? But the problem is they don't trust crypto because they don't have the knowledge. That's why we're taking on this hard part and doing it for them. So I hope our first test case will be in Kosovo, and I think it will be something.

Hodl Up: Perfect. And if you choose Kosovo as your first test case, you're going to have us there helping you amplify it in any way we can.

Merita: Absolutely.

Hodl Up: Because this is something we care about a lot, and the market is there. There's about €1.3 billion in remittances a year.

Merita: Absolutely. So I think a first test case is possible.

Hodl Up: Perfect. Well, thank you so much, Merita, for joining us today.

Merita: Thank you, guys, and thank you for coming here. I'm really proud of you that you actually made it here, and you're the first Albanians I've met here. I'm so proud, so I said I have to meet you guys, I have to talk to you.

Hodl Up: Likewise. Thank you so much.

Merita: Thank you.