The Future of Payments: Transparency & Proof of Reserves - TOKEN2049 Singapore 2023

really excited to be here and uh really happy to see a lot of people seated and smiling I was uh awoken by jet lag at like 5 a.m this morning and I Was preparing a little bit for this doing some practice and I went on Twitter and I saw the photos from Arthur Hayes pool party and I was really worried that like half the conference was gonna be in jail so I'm glad to see a lot of people here and secondly I'm really pleased you guys are here because there's a lot of cool stuff going on here there's you know the future of V chain really cool white paper there's all sorts of stuff about hyper chains next uh revolution of zero knowledge proofs but I'm here to talk to you about this really exciting thing called Merchant settlement which doesn't sound as cool as some of the other stuff that I just mentioned but hopefully after this you have a really good idea of why it's a big deal and why we at World pay and companies like hedera and visa and others are really excited about what's going on in the settlement space so why should you care about what I have to say about settlement versus anybody else so for those of you that aren't familiar with World pay um we live and breathe settlement it is our bread and butter it is our business and we are the largest uh payment processor and provider of merchant settlement in the world uh we process about two trillion dollars annually around the world of consumer payments into businesses we do that across dozens of countries dozens of payment methods over a hundred currencies and we do it at an unbelievable scale so you think about companies like Walmart on Black Friday AliExpress on Singles day Amazon on Prime day those are our clients and they're trusting us to make sure that their customers can pay them to get the goods and services without any sort of Hiccup every day of the year so now you're probably thinking okay this is like a web 2 Trad Phi dinosaur but actually we've been in crypto for a really long time and are really big fans of the space uh I would probably wager that us having been in crypto since 2015 is probably way before most people at this conference bought their first digital asset so we've been around for almost 10 years in the space we work with pretty much all of the large exchanges we work with them across 40 plus countries we've done a lot for the space including launching Apple pay and Google pay for the crypto ecosystem and are really proud of the recognition we've received so we really care about settlement and we really care about crypto so I'm going to share with you what we're doing at the intersection of those two things before I do that I'm going to kind of level set us all on what I mean when I say Merchant settlement and I'm going to use a real example so this morning I took a grab from my hotel to the convention center here now anybody in the audience would you feel comfortable coming up here and explaining to everyone how the money got from my card to the grab driver could anyone do that and tell me every single step other than the world pay people here now no one really knows how Merchant settlement works but we all make dozens of purchases a day so we use this service Without Really knowing it so I'm gonna tell you about it so this morning I got my grab and what's going to happen later today or tomorrow morning is my bank so I use my Chase Visa card my U.S Chase Visa card Chase is gonna pay Visa at some point later today or tomorrow morning and then I use my us card like I said but we're in Singapore the grab driver probably wants Singaporean dollars so Visa is going to convert that dollar into Singapore dollar and then they're going to send it to grabs payment processor may or may not be us I'm not going to tell you and had Visa sent us a US dollar instead of a Singapore dollar we might have to convert it into a Singapore dollar and then we're gonna send it to grab and then grab will send it to their driver maybe every day or once a week or whatever now this is what's called the four-party settlement model that's been in payments for close to half a century it's responsible for moving tens of trillions of dollars across Visa Mastercard and other payment companies and it's okay like this model depending on where you are in the world you know grab may get its money a day or two after I take the ride if you're in a developed country if you're somewhere that's not as developed and the payment rails are a bit slower it might take three or four days and in some cases like if you use a credit card in Brazil the merchant actually doesn't get paid until 30 days after you make the purchase so I can go to a grocery store buy groceries my credit card that grocery store is not going to get the money until 30 days later so I asked the question like what's wrong with this we could say nothing's wrong because 25 plus trillion dollars a year move on this rail it supports millions of merchants it's created trillion dollar companies if you combine visa and MasterCard together but I think it could be better so if you think about this model here right there's at least five or six different parties involved plus their Banks there's a lot of single points of failure there's a lot of layers and fees that all need to be reconciled and audited if you want to have proper controls you in the crypto space know better than anybody that when there's Banks involved you're subject to their risk appetite so maybe there's certain Merchants that want to be able to participate in this but they can't because they can't get a bank account as we talked about it's not really the fastest the fastest you're going to be is at least one business day minus weekends minus public holidays Etc so even though it works and is super stable and has been around for half a century it could be a bit better and so we thought you know what can we as World pay as one of kind of the four pillars of this and the biggest pillar in that corner do to make it better so about six months ago we launched a stable coin settlement service and what this does is basically my bank Chase still pays Visa in Fiat Visa still might convert it depending on what I ask him to do they're going to send that to me but this is where it gets different we're going to convert that into a stable coin right now we work with usdc and then rather than sending it to grabs bank account we're going to send it to grabs usdc wallet now what does this do why is this like interesting so what we've done is we've left the left side the same but now we've taken the right side of the transaction and we've put it on 24 7 365 rails with no blackout dates and made it a heck of a lot cheaper and had a few other benefits as well we've reduced points of failure we've reduced Reliance on banks in certain parts of the transaction we've increased traceability and audibility auditability on the right side of this we've increased the speed on the right side like I mentioned so it's better it's not as bad per se as the previous version but as you can see there's still a lot of parties there's still a lot of Fiat but we can only influence so much in here but what has it not solved so a couple different things one is like I mentioned we've only really brought the transparency and auditability of blockchain onto a portion of that four-party model we haven't done the whole thing second is we haven't really done anything to increase confidence particularly outside the crypto ecosystem in stable coins and believe me when I say when I talk to Banks or other companies outside of crypto there's still a lot of people that think about Terra Luna and that's their impression of stable coins and third is we haven't really made the first half any more efficient we've just kind of fixed the last bit between us and grab or any other Merchant so we thought okay what could we do as a next step to make it even better and so what we're working on right now which will be coming out next year which is going to particularly address the first two points here is what we're calling the new world pay proof of reserves stable coin service in partnership with hedera bcw and other firms which I'll talk about in a second and what this does is if we take the right side of that transaction so World pay settling funds to grab or any other Merchant every day in stablecoin that's the right side of the chart that we're looking at before let's call this the world pay stable coin service whatever you want to call it what we're doing now is in basically real time we are pulling three data feeds from us fire block Circle various Banks and our payment platform feeding that into an oracle Axiom the first Native Oracle on hedera they are then validating that all three of those things have happened whichever with every single settlement transaction we do so they're saying World pay actually paid the Fiat into the bank it was supposed to Circle minted the usdc that it was supposed to onto the correct chain and it was transferred this fresh untouched USD from World pay to the merchant when it was supposed to be that's all getting validated by Axiom getting attested to hedera which could then can be validated on hedera and then what we're doing is with the archaia mirror note service making that available to our clients and any of their Auditors or Partners or Banks who need the information to get all of that information in real time to get a lot of benefits one is you get the near-time monitoring of payments which you don't get in Fiat you got to kind of wait till things post and if you run a payment trace the trace is probably going to take longer to fulfill than you to get your money and what we get is for this right side of the four-party settlement the full transparency auditability and Reconciliation benefits of blockchain we get a proven provenance of the stable coin which is really really important to clients outside of the crypto ecosystem particularly in regulated Industries so we can say this is fresh usdc it had nothing to do with tornado cash or North Korea or whatever it's got real Fiat behind it and we can prove that and then we also know exactly who was involved at every stage of the settlement process so you don't need to wonder where your money is if it's held up somewhere you can see that all so I'm going to demo this for you I've got some videos so how this works and this is a MVP or beta whatever you want to call it is you've got as a merchant this proof of reserves dashboard so your Merchant name you can see your unique hedera consensus topic your evm address you can see what sort of assets we're looking at what the data sources are like fire blocks or World pay or the bank or Circle or whatever and then you can also drill down as we'll see in a second into every single transaction in that settlement flow you can see when the Fiat was deposited by World pay when the usdc was minted and what chain it was minted on when the usdc was transferred and where it was transferred to and from you can see the status of the validators on Axiom that they validated the transaction when it was created when it was updated and then you can drill down all the data whatever you want so this is super cool because it's super scalable you guys all saw at the beginning that we're a big company scale is very very important to us this is all API based we can scale this out to hundreds if not thousands of merchants because they're all replicating the same process through Axiom through hedera and their scalable infrastructure and then pulling it into each Merchant's own unique dashboard what else is really cool is obviously it's transparent I talked about that but we've also got the Oracle dashboard so obviously this whole ecosystem particularly when it comes to stable coins is built around trust which is something we're really trying to solve here and so what we've also given them the ability to do is in this Reserve report click on all the oracles that are working on Axiom see who they are when they join when their last transaction was when their what their uptime is ETC as validators get added or leave the ecosystem they can monitor that decide if they're comfortable with it or not so it really gives our clients a level of visibility and transparency and detail into their settlement payments that you just can't get in the Fiat ecosystem so we're really really excited about this and I want to give a big thank you to everyone who's supporting this because like most things in crypto it's a big effort so as I mentioned we're working with hedera and the hashgraph association bcw our partners Circle and fire blocks have done a lot of custom work for us on this to make sure the data feeds are real time um and have the right information we need Axiom I talked about hedera I mentioned as well and really this is what we're working on launching next year for the stable coin piece so we're really excited about this we think it's going to build a lot of confidence and Trust in the stablecoin ecosystem particularly outside of the crypto space with the Enterprises at the scale that we operate and if you're really interested in this stuff I also want to see something that's coming next so for those of you that follow the payment ecosystem you will have seen Visa issue a press release last week talking about how they're piloting usdc settlement with whirlpay so what's coming in the next two or three or four years is going back to our model we've got my bank Chase but now Chase can actually pay Visa or Mastercard in Fiat or a stable coin this is happening today if Visa or Mastercard got paid in Fiat they can swish it into a stable coin they can send that to us and then we send it to the merchant so we've gone from in the first example of this I showed you to having depending on how you count it four to six plus Banks involved now there's one the Consumers Bank and we've gone from having only the right side be on stablecoin to having it also on the left and most importantly and most excitingly this whole thing happens extremely quickly compared to the one to five to Thirty business days that it happens today so this is going to take a long time companies like us and Visa are not the quickest but this is what we're working on Visa is investing a lot in this we're investing a lot in this and so if you're interested in the stable coin settlement space I'd encourage you to stay tuned and hopefully we'll be back here next year talking to you about some of these benefits that we're rolling out for merchants as well thank you [Applause]