We are starting our next report. For her, I want to invite Pedro from WalletConnect. He is the founder of WalletConnect, and many of you know WalletConnect as a tool WalletConnect as a tool used to connect wallets to mobile apps, MetaMask, and any other Web3 wallets on your computer. But there has been a major evolution in how we perceive the development of wallets: from simply making transactions to actually managing and facilitating payments. So, can I tell you all about this opportunity, the transition, and what it is that makes them so excited?
Please welcome Pedro to the stage. Thank you. Well, that was a very good presentation. He actually stole my first two slides. So, you already know about WalletConnect.
You already know who I am. So I'll tell you a little more about our overall path as a crypto industry, where we're actually going, and what role Algorand will play in that. And one thing that becomes abundantly clear is that abundantly clear is that the crypto industry has tried to be many things. We've done identity, social media social media , gaming, a lot of things, but only in a few areas have we really found product-market fit, and they're all related to finance, specifically tokenization, settlements, and generally more efficient ways of moving money. But if you think about it, all of this was developed because everyone was just creating infrastructure.
Our clients, so to speak, were developers. We tried to build standards, provide better interoperability and tools. It all came down to improving the infrastructure for this new form of finance or a new way of moving money, but we didn't solve the problem we were trying to solve in the first place . Bitcoin has always been about payments. Its abstract directly states: “To allow online payments to be made directly from one party to another.
” And this problem was never really solved. I think it's really important to differentiate between payments and transactions because payments are more complicated than we think. We created the infrastructure for the movement of money. We can transfer funds from point A to point B. But when it comes to payments, it comes to payments, it's a completely different problem, because transactions are purely technical objects.
You simply determine how to move funds from A to B. But payments exist in the context of goods and services, where two parties interact and make decisions about transferring that money. And also, when you use blockchain, for years there has been a constant talk about user education and that user education and that we need to understand how blockchain works. But realistically, we see that this is not the problem we are solving here. We solve the issue of our own asset storage.
We solve the issue of financial freedom. We are trying to make the financial world better, more global, and more accessible. Transactions solve this, but they are still quite complex. But payments are a completely different matter. Payments are when two parties agree to exchange products or services as part of a transaction.
So how do you consent to this transaction? In fact, this is already a solved problem. We don't need to reinvent the wheel reinvent the wheel . Anyone who has worked in payments or studied how Visa and MasterCard work knows the three stages: authorization, clearing, and settlement. And, oddly enough, transactions are the basis of calculation.
This actually happens at the end. So, we have effectively put the cart before the horse. We tried to fix one thing, but we didn't really fix the primary thing. And the first priority is, for example, authorization. Can the seller accept these funds?
And not just because the seller can accept them technically and we have compatibility between my wallet and your device. This is what WalletConnect does. But are there regulations, rules, and risk assessments so that I understand that this is an acceptable transaction for both of us. And after you have been authorized, the clearing aspect appears. All parties are involved here.
There is usually a payment provider. No one actually accepts payments on their own. There is no such organization that simply accepts payments one by one payments one by one . There is a large payment provider that abstracts all of this, and they also charge a fee for it. So, you have to split this commission.
You need to understand who gets paid for the service and how to route those payments. And finally, once you have passed authorization, clearing, and settlement, it is time for the transaction itself. You are actually transferring funds for settlement, and this often happens at a later stage. This doesn't always happen instantly happen instantly . Fortunately, in blockchain, this is almost instantaneous, but settlement can take up to 7 days.
That's why you sometimes find yourself in a situation where you rent a car and the deposit is returned in a week, because the settlement is not a payment. A transaction and a payment are completely different things. So, understanding this complexity, let's add even more complexity. There are actually two ways to pay someone. For example, in Europe, it is quite common to pay by bank transfer or even through a third-party service that sends you a payment request.
This effectively means that you are creating an access point, saying: " access point, saying: " Send money here, and then our transaction will be completed." You don't actually collect funds. When you use a card payment, you are actually charging the funds because you are not the one initiating the transaction initiating the transaction . You don't go to an online online store's website, then to your bank and click "I'm going to send money to this person." They themselves collect funds directly after prior authorization from your bank for such actions.
And that's why pull payments are more popular than push more popular than push payments, because if you think about it, that's how blockchains work today. You are effectively redirecting the user to their bank or wallet and they initiate a transaction in the app or for the merchant. But in a more traditional way, with card payments card payments , you're actually making a pull payment. You already have a pre- authorization that allows someone to charge your bank account. Therefore, pull account.
Therefore, pull payments have a great advantage. They have a big advantage because, firstly, you don't have to switch between apps. You also don't have that window of time where the exchange of goods or services is complete, but you don't know if the money will arrive because you still have to go somewhere else to send the payment. You also reduce the seller's risks, because technically—what if they send you the goods and you never pay? And you also have a problem with escrow accounts.
Often, these push payments work like this: they collect all the funds in one place before the goods and services are actually paid for, and only then process the transaction. And we also don't have the ability to do it instantly. The good thing about pull payments is that we can do all of this authorization, all of the clearing, and then actually settle. settle. This is not the case with push payments, because there is always a delay between the exchange of goods or services and the actual payment.
So, that's obviously a big problem, but then you add all the blockchain issues in here. So now we're not talking about the original vision of Bitcoin, we're talking about all the second-level solutions, all the stablecoins. On top of all this, merchants don't want to deal with processing all these payments, because it becomes very complicated, especially since even stablecoins work differently. For example differently. For example , some of them use standards like ERC-3009, where you can sign a permission: "In the future, you can transfer funds for this amount."
Or you can use " you can use " permit two", which allows you to transfer funds within a certain limit. Or even delegation in Solana, which works completely differently than in EVM. Sellers only want to receive their own currency. If they accept euros, they are only interested in euros. They don't care about the 10 different versions of the euro that exist as stablecoins.
They are not interested in the 10 different versions of blockchains that currently exist. So with Walla Connect, we're trying to solve all these payment problems so that merchants can actually accept cryptocurrency. Having authorization, clearing, settlements, a "pull" mechanism instead of a "push" one, and a single integration that abstracts all these tokens and networks. And the reason why it's so effective is because Walla Connect has been creating what I would say is the most versatile QR the most versatile QR code in the crypto world for 8 years. Now we can leverage this growth, leverage the large network of wallets that already accept our QR code, and make it available to merchants.
What do sellers get? They can issue invoices in their own currency, whether it's euros, dollars, or any euros, dollars, or any other national currency they accept. They don't need to understand how all these blockchains work. They get one QR code that all wallets accept and can use it both offline and online. Why does the seller need this?
They already have card payments. Why should they prefer this? Well, as I said, card payments can take up to 7 days to clear can take up to 7 days to clear . In the case of stablecoins, we are talking about 10-20 seconds, depending on the blockchain. We also have significantly lower fees.
Card payment network fees can reach 3% network fees can reach 3% depending on the country and whether there is cross-border movement of funds. Because if someone pays in the US from the US, it's not at all the same as someone from Europe paying in the US. You also gain access to new customers, as some people may not have access to the same card network. If you look at Visa and MasterCard, Japanese and Chinese users have n't had access to them for many years . So, they couldn't use them.
And with stablecoins, we are actually opening up to the whole world. And another thing that sellers really want is the absence of payment disputes. It may not be a well-known fact, but sellers have a big problem: they provide goods and services, someone files a false complaint, and card networks, trying to please consumers, always side with them. So why do users want to improve payments with stablecoins? Well, first of all, we don't force them to download the Wallatnick app.
Just so you know, there is no such app as Wallatnick and there never will be. So if you see it on the Apple Store or Google Play, on the Apple Store or Google Play, it's a scam. Don't download it. You use the wallet you like. I don't care if it's a crypto don't care if it's a crypto wallet, a non-bank wallet, a custodial wallet, or a non-custodial wallet— non-custodial wallet— WalletConnect will always work because its purpose is always work because its purpose is to be a network of wallets.
You can also use your favorite tokens, stablecoins, or networks. So the seller will receive their euros, whether in stablecoins or fiat, and you can pay in USDC. You can even pay in Ethereum if you wish. So, as a consumer, you have the ability to hold your desired assets in your favorite wallet and on your chosen network. And and on your chosen network.
And , of course, one thing that may be popular in the US but not in Europe in the US but not in Europe is our cashback program. Yes, in the US you are used to 5%, 3%, 4% are used to 5%, 3%, 4% cashback. WalletConnect can offer 2% offer 2% cashback globally from the start. And also fast confirmation and transparency, which, in my opinion, is the advantage of stablecoins. We simply ensure that it is available through a payment mechanism that allows you to pay at a coffee shop or on an e- commerce site if you want to buy a plane ticket.
I think payments are really the best path to mass adoption. Crypto has truly revolutionized finance. This meant a lot of trading and tokenization, but it didn't reach a wide audience. Not everyone speculates, not everyone wants to trade, not everyone is in crypto just because they want the best price on the chart. They just want a better product.
They want to use assets anywhere. They can travel and just use them. Payments are something that everyone understands: from the very young to the elderly, from those who are constantly online to those who prefer cash. Payments truly solve a problem for everyone in the world, providing the financial experience that developed countries like developed countries like Europe or the US have on a global scale global scale . And WalletConnect does it the way it's always been .
We provide an SDK for developers of our wallets. We provide SDKs to payment companies, and merchants and users only need to know about QR codes. A beautiful QR code that gives you confidence that the payment will be made the way you want, in a way that is accessible to everyone. I want to show you a small snippet of code so you can see how little change we actually require from people. It's the same QR code with a different URI inside, which allows you to recognize whether you're connecting to DeFi or making a payment, and it's available today in all of our wallets.
Thank you very much. Ugh!
Automatic transcript — names and jargon may be misspelled.
