Host: Welcome to the P-FACTOR. Today I’m sitting with the venerable Anson Jay Bailey from KPMG, where he heads up consumer and retail for the region for the APAC region. So very welcome to the to the show Anson.
Carol: Welcome to P-FACTOR. Today, we have Eric, CEO of Triple A to be a cast to talk about very interesting topic and also a very trendy topic, which is crypto payment. So welcome, eric. So why don’t you start an introduction about yourself and the company to give a brief idea to our audience about what TripleA is and what you do? What have you done in the past years?
Eric: Sure, thanks for having me at the podcast. I’m delighted to be here. I’ve been in a payment space all my life and my previous company called Tunes, which is doing cross border payments, in particular to emerging markets. And there, I’ve noticed a couple of issues using the traditional rails. For consumer payments. There’s a lot of chargeback risk when you’re using cards. So there’s a lot of fraud, which might happen. The other thing we had issues with was cross border payments using the SWIFT trails, which are also very slow and inefficient. And doing cross border payments can take days and could be even worse when there’s weekends or holidays in the middle. When I discovered crypto, I felt like crypto was kind of the best solution to address those two problems, the risk of fraud, as well as the fact that the switch is very slow. And that’s how I started TripleA.
Carol: interesting. So it sounds like you are a veteran already in the payment industry. So we all know that it’s been about 13 years since people used the first Bitcoin to buy pizza, which is like the bitcoin pizza day. So it has been more than a decade already. I’m sure that crypto payment has evolved in a lot of directions in the decade. So what’s your point of view on this? How do you see the current status of crypto payment in the market right now?
Eric: What has changed a lot, and I would say, in particular, things for 1 year, with the collapse of the FTX. What we saw in the crypto payment market is the very wide adoption of stablecoins. USDC USDT have been increasingly being used as a way for people to pay or get paid. And that’s maybe the big revolution, which is not being so seen by people in the industry. Is that for the first time ever with crypto and in particular, with stable coins, you are enabling anyone on the planet to be able to have an USD account and… based in Singapore. So it’s very easy when you open a bank account out of the box, you’re getting dollars, euros, US dollars, whatever. But that’s an exception. Usually in most countries around the world, it is fairly difficult to have access to the US dollar. And in particular, for people in emerging markets, all those stable coins are really helping them to be financially included in the global economy.
Carol: I see. So actually you’re saying, instead of people paying directly using ether or bitcoin, a stable coin is the most widely accepted payment method right now. Is that right?
Eric: It’s … on our side, those are the most transacted crypto currencies. We still have a lot of transactions happening through bitcoin or eth and so on, but more and more people are using stable coins. Because there, what we’re seeing is a whole economy of people who are getting paid with stable coins.
And then they need to spend that to say you are a freelancer in Bangladesh, and you’re lucky to have a client in the US you prefer to receive USDT for instance, instead of Bangladeshi dhaka. But then as you’re getting more USDT then you need to spell them. That’s why they want to work with our merchants, for instance, so that they can actually buy from those international merchants.
Carol: Interesting. And it all started after FTX went bankrupt. Would you say so?
Eric: I would say that’s where we see this massive increase in usage of stable points as a payment option.
Carol: I see. Thanks for the insight. And ok another question for you, which will be more from a sector point of view, which sector or you can say which region or which industry that you see has more volume of crypto payment. Maybe TripleA has some insight about that?
Eric: Yes, absolutely. When we look in particular consumer payments, what we are seeing as a great vertical for us, I would say the first one is luxury. And for instance we’re working with a luxury marketplace, Farfetch. And so people are buying items which can be like $5,000 to maybe $20,000, so fairly high ticket items. And that works pretty well. And what we’ve heard from all our merchants in that space is people paying with crypto tend to spend way more when they’re using other payment options.
So that’s an opportunity to increase revenues for merchants.
The second vertical, where we are seeing a great adoption, is the whole travel industry, buying an airline ticket, paying for a hotel room and things like this. And … It’s obviously usually a very cross border transaction. And so crypto gives them this type of merchant, the travel merchant, the ability to get paid for the 400 million people around the world having crypto, no matter where they are. They are protected against any risk up front. Usually. Travel is a high risk industry because of chargeback risks. And in this case, with crypto, the merchant is guaranteed to get paid, so there’s absolutely no risk of fraud for them.
That’s the second vertical. The last key vertical that we’re seeing on our side are all the digital content. And in particular, the gaming industry. There is a huge overlap between the gamers and the crypto users. For instance, we were working with people like Razor, which is selling game gaming, video game products. And this is a massive uplift of their revenues as well.
Carol: Interesting. Because from what most people understand, they are still in the concept that crypto payment only exists in a virtual world, like people buying, as you say, the game product like the skin or the character from the game.
But now it’s already, as you say, is already extended to our offline markets, such as luxuries, bags, and travel tickets. That’s an interesting involvement. When does that happen? From your point of view?
Eric: We’ve been around for 4 years, and we’ve seen all those use cases being adopted over the last few years. So…for me it is every day, there are more people who are using crypto to buy. One of the new trends we’ve been seeing of new use cases of crypto payments are more like B2B payments. So in this case, it’s not like e-commerce, but it’s really a business selling to another business. We’re working with law firms, for instance. And some of their clients want to pay with crypto, but they don’t want to touch crypto. And so that’s why they work with us. We have telecom companies, accounting companies, marketing companies, and they are getting more and more clients coming from the web3 space, from the crypto users, the crypto native and they want to serve those clients, but they still want to receive their payments on their bank account.
And they are not ready yet to jump ship and get their own crypto wallets.
Carol: I see then if they’re not ready, how would you persuade them? Or what kind of service that people provide, so they can and they can trust your surveys instead of having doubts about receiving cryptos, how would you persuade them to accept more crypto?
Eric: That’s absolutely the prime where we’re solving is helping them offer the option to their client to pay with crypto. But without them ever touching crypto, they don’t need to get their own wallet. They don’t need to custody crypto. The way it works is that they are selling something for $1,000. Their client pays in crypto and automatically in real time, we are converting the crypto into dollars and we are settling on their bank account.
So we’re bridging the gap between their clients and the traditional businesses.
Carol: That sounds like a very exciting aspect because from Payment Asia’s perspective, we also have a lot of clients. If you explain to them, you can collect money with crypto. They wouldn’t understand. They would say it’s a very complicated process that wouldn’t touch, but with for example, the collaboration between us like with the help of TripleA they can just collect in fiat. They don’t need to think about all the complications in crypto. And also it’s good for them because we have clients that are selling tickets. Now the tickets can also be a NFT is that right?
Eric: Absolutely. That works for any kind of products and services. It is just an additional payment option which is offered to your merchants and to increase their revenues.
Carol: That sounds very exciting.
So another question for you, seems to be in the payment industry for a long time, and you see how the thing evolved from the traditional payment to crypto payment. And when you are in the crypto payment business, how do you foresee the next development? Like if you can imagine what is the next breakthrough or that you would see in a crypto payments industry.
Eric: For us, it is ready to grow the adoption and to get more and more of those 400 million people. If you compare to … so people having crypto 400 million, that’s more or less the size of the Paypal. And the usage is not as usually people having a pay telecom, they do a payment once or twice a year. I think getting to the same amount for crypto users, that’s really what I’m looking forward to.
Carol: I see. And also speaking about growing the adoption, I know you’ve been working in Singapore and also in Europe and also a bit in the Middle East.
So in terms of region, where do you see which region is the one that accepts this new payment method the most, in your opinion.
Eric: What we’re seeing is people more or less following the global GDP so where we’re seeing most of the people paying with crypto is still in the us western europe, more of a developed country. However, as I was mentioning at the beginning, especially now that with the stable coins, we’re seeing more and more activities coming from emerging markets.
Carol: Like Latin America, Africa, this kind of place?
Eric: Latin America, Africa, the middle east has been also booming recently, in particular, within the UAE where the regulation has been more crypto friendly. Yes. So that’s some of the places where we’re seeing great activities. Interesting.
Carol: So we are going to see more of the transaction coming. And speaking of that, another question I would like to ask you is security, right? So the traditional payment is slow, but one of the advantages that they have is security. For crypto payments, some may argue that is not safe enough. All the money I can’t …There are transactions that are sometimes slow, or sometimes it can be lost, or sometimes it can be hacked, because there’s not not a centralised institution using its credibility to back it up. So what kind of method does triple? It takes to ensure the safety of the transaction in the crypto payment?
Eric: I think that’s what we bring here is that TripleA is regulated by the central bank of singapore, as such. What we have to do when we’re audited on a regular basis for that, is that all of our clients’ money has to be put in segregated accounts at special bank accounts at banks.
So this means that even in the case where we would default, The money of our clients is in safe accounts that cannot be used by us. So that’s one of the ways to deal with these security things. The second is that if you compare the and from a merchant standpoint, if you compare it to credit cards where the risk of fraud is very, very high for the merchant, especially for online, that’s a risk which cannot happen on the using crypto. It’s impossible to hack the block chain as such. There’s no way to reverse a transaction on the block chain.
That’s why no matter what the merchant is guaranteed to get paid.
Carol: I see what anti-money laundry and also the kyc process like someone may argue, for example, if you pay me with crypto, I don’t know where do you get this crypto? Or I don’t know about you because we never have a face to face process. So what do you think of that? …How do you TripleA do the anti money laundering online for crypto?
Eric: We have very big compliance processes, policies and procedures, but to briefly explain.
So first, before boarding, any of our clients were doing a full KYC that’s the first level. Then on the transaction level, what we are doing is we are doing all the transaction monitoring. You would expect from any payment service provider. But the thing which is specific to crypto is because crypto is based on the block chain. We are using block chain analysis tools that we’re able to trace back. The beauty is that because it’s on the block chain, you can go back as much as you want in history. And so you’re able to detect and block transactions, which come from the dark web, which are linked to sanctions, which are coming from criminal activity from scam and so on.
What we do here is that in real time, we’re doing the scanning on the block chain. If we detect something wrong, then we block that transaction and will tell the merchant not to ship the goods or services. We block the transaction there. We’ll do a manual review. It might be a false positive. It might be a money laundering case, or worse, it can be a sanction. And depending on the outcome of the investigation, we may file a suspicious transaction report to the authorities.
Carol: I see, so that’s even safer than before.
Eric: Absolutely, that’s something people… It’s like when you’re getting bank notes, $100 bank notes is like you can see who held these bank notes before you.
So that’s way more secure than cash, of course.
Carol: Yeah, like you get cash before, you don’t know who touched this cash or where is this cash coming from, but with block chain technology, you can see where is this crypto coming from and who else has been using this one before? That sounds like a much safer process.
So you talk a lot about stable coins. So let’s talk a little bit more about that, because we all know that the Singapore government has recently released the regulation regarding the stable coin. They say that a private company can issue a stable coin with a requirement on the deposit. And also for any customers who would like to withdraw a stable coin, they have to pay the customer in like five working days.
So … I think the Singapore government is one of the first in the world to release such a detailed regulation on stable coins. And compared to the world, what do you think about the stable coin regulation and also to the whole crypto regulation environment? If you would like to compare Singapore with other regions, for example, let’s say Hong Kong.
Eric: So Singapore and have been lucky to start the company in Singapore, because Singapore has always been the first developed jurisdiction to have introduced regulation for crypto, in general. And so we have a very clean framework, especially when it comes to payment using crypto. And so those new regulations around stable coins are, I’m pretty sure there’s plenty of the big, stable coin issuers who are thinking of issuing from Singapore under this, because now you have a very clear set up in a very respected jurisdiction.
And when you, on the other hand, because it’s being said that Singapore was very crypto friendly and so on. And then it took time for licences to be issued. So still, Singapore is trying to be very careful on who they issue licences to. And so it’s not like any kind of random guy can come and do crypto business in singapore. That’s not that’s not the case. And I think in Hong Kong with a new regulation, there has been kind of following the same approach. And I think that was very welcomed in Hong Kong. Again, it’s funny because when you read the press and say it’s a new crypto hub and so on. So crypto friendly, but the regulations are very similar between Singapore and Hong Kong. And I think the approach of a regulator is very similar. And they’re not gonna let people not be super easy with the people.
So, my advice is that if you didn’t manage to get a licence in Singapore, you’re probably not gonna get it in Hong Kong either. So because the standards are very similar, it’s great that Hong Kong has those new regulations. But if you think that you’re starting your crypto business and you say I’m signing up at a shop in Hong Kong and it’s gonna be very easy to get my licence. And if you’re not ready to invest in compliance and in all the requirements, you probably won’t be not very successful.
Carol: I see. So your suggestion for the stable coin issue is to come to Singapore. Is that right?
Eric: No, that was not my point, because the big stable coin issues today. That’s like a handful of them. You have a circle, differ taxes to some extent, which are where they work with Paypal and Binance. I think those big companies are gonna look very carefully on where they want to issue their stable coin from. I was referring more to the smaller project. Because I keep hearing people who tried to set up shop in Singapore who couldn’t get a licence.
And I was saying we’re now gonna move to hong kong.
If you don’t have the right capital, if you don’t have right, don’t have the right skills, it is not gonna be easy. I think. One of the big mistakes people in the pure crypto space are making is like say, hey, but crypto is different. That’s not how I see it. What I’m saying is that we’re our first financial institution. We happen to specialise in crypto. But first, we are a financial institution, a payment institution, in particular. And one of the payment instruments we’re using is crypto. And while a lot of the crypto cowboys, I would say, would say but it’s crypto, don’t worry. We don’t have to do all this.
Carol: I see. So no matter where you are in Singapore or Hong Kong, where you would like to issue a stable coin where you are actually, compliance is the key.
Eric: Absolutely. And that comes at significant cost.
Carol: I see. So I think our time is almost running up.
So one last question for you, how would you see TripleA … What is TripleA is next big step?
Eric: The next big step for us is really to continue our global extension. That’s really what we want to be able to serve our clients, no matter where they are around the world. And for us, that’s the key for the future.
Carol: Thank you, Eric and thank you for your time today to join our podcast. Hope to see you soon in hong kong whether it’s hong kong fintech week or we can go to singapore and to join the singapore fintech week. Can meet you guys there.
Eric: Sure, hey, looking forward to meeting you in Hong Kong soon.