using the card infrastructure as rails for bitcoin adoption
TRANSCRIPT
January 2016
May 2016
DISCLAIMER
Norepresentationorwarranty(expressorimplied)ismadeasto,andnorelianceshouldbeplacedon,thefairness,accuracyorcompletenessoftheinformationcontainedhereinand,accordingly,noneoftheCompany,oranyofitsshareholdersorsubsidiariesoranyofsuchperson'sofficersoremployeesacceptsanyliabilitywhatsoeverarisingdirectlyorindirectlyfromtheuseofthispresentation.Thispresentationcontainscertainforward-lookingstatementsthatinvolveknownandunknownrisks,uncertaintiesandotherfactorswhichmaycausetheCompany'sactualresults,performanceorachievementstobemateriallydifferentfromanyfutureresults,performanceorachievementsexpressedorimpliedbysuchforward-lookingstatements.Wirexdoesnotundertakeanyresponsibilitytoupdatetheseforward-lookingstatements,whetherasaresultofnewinformation,futureeventsorotherwise.ThispresentationcontainsstatisticsandotherdataonWirex’sindustry,includingmarketshareinformation,thathavebeenderivedfromboththirdpartysourcesandfrominternalsources.Marketstatisticsandindustrydataaresubjecttouncertaintyandarenotnecessarilyreflectiveofmarketconditions.MarketstatisticsandindustrydatathatarederivedfromthirdpartysourceshavenotbeenindependentlyverifiedbyWirex.MarketstatisticsandindustrydatathathavebeenderivedinwholeorinpartfrominternalsourceshavenotbeenverifiedbythirdpartysourcesandWirexcannotguaranteethatathirdpartywouldobtainorgeneratethesameresults.
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Agenda
About Wirex1
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Market Snapshot
Bitcoin Adoption
Traditional vs Bitcoin Payment Infrastructures
Debit Cards
Compliance, AML and KYC
Use Cases
Future Trends
About Wirex
▪ Wirex is the first company offering a secured bitcoin wallets linked to VISA & MasterCard debit cards with accompanying services for remittances and personal banking supported by user-friendly online and mobile applications
▪ Wirex solves 3 problems with one solution:
A. 10M bitcoin users experience difficulties exploiting it in everyday life
B. Millions of people pay high fees transferring funds abroad
C. 2B unbanked adults worldwide do not have access to banking infrastructure
▪ Wirex services and products became well-known under the E-Coin brand name and have attracted 150K customers in 150+ countries since its release in 2015
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Bitcoin / Blockchain Market Snapshot
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Recent Statistics▪ Q1 2016 / Q1 2015- Wallets +1.5x- Transaction Volume +1.4x- Price +1.7x- Market Cap +1.9x- VC Investments +1.6x▪ New wallets (Q1 2016) +1.2M
Industry News
Trends▪ Bitcoin vs Blockchain▪ Raise of Ethereum▪ AML4D in Europe▪ Block reward halving in July▪ Bitcoin scalability debates
▪ Satoshi’s reveal▪ Japan to regulate bitcoin as a currency▪ EU VAT exempt ▪ Russia to ban bitcoin
Bitcoin Adoption
A Way to Go
▪ New applications solving existing problems that traditional financial infrastructure cannot (not willing to) solve and what bitcoin can improve/solve
▪ Put the technology behind as it is usually not important for customers
▪ Still speculative reasons predominantly▪ Not many useful applications ▪ Illegal activities i.e. money laundering▪ Tax avoidance▪ Capital controls avoidance▪ Still sophisticated for a general crowd despite
impressive pace of improvements
Bitcoin Adoption DriversNot Many Good Reasons to Buy Bitcoin
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▪ Rather expensiveSWIFT/SEPA/ACH▪ Unfair currency exchange rates▪ Overcomplicated international transfers▪ Capital controls ▪ Restrictions to send money abroad and/or
convert into other FIAT currencies
Manyofthese problemsarebeingsolvedbyfintechcompanies
1Traditional
ADVANTAGES
▪ Regulated▪ Fraud protection▪ Acceptance▪ Generally less volatile▪ Transparency▪ Intrinsic value
Traditional vs Bitcoin Payment Infrastructures
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Bitcoin
DISADVANTAGES
▪ Total Control▪ Restrictions/Limits▪ Excessive number of different fiat currencies▪ Inflation▪ Banking services develop at slow pace i.e. a
luck of innovations
ADVANTAGES
▪ Democracy / Decentralisation▪ Freedom▪ Implied deflation▪ Cheap and fast payments (compared to
FIAT international transfers)▪ No chargebacks▪ Very innovative
DISADVANTAGES
▪ Very limited acceptance▪ Substantial technological risks▪ Fraud/Hacks▪ Volatility▪ Questionable intrinsic value (if any)
Visa/MasterCard
▪ Worldwide accepted▪ Online/POS/ATM▪ Creating powerful combination with bitcoin▪ Bitcoin based international payments▪ Conversions and loads onto cards to spend
anywhere
Debit Cards
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Conversions at POS
Everyone can start accepting bitcoins
▪ No need to preload cards▪ No control over the rates
Loadable cards
▪ Should be preloaded (converted)▪ More flexibility▪ Less volatility risks
Solution for bitcoin remittance
Payroll / Freelancers and Contractors
Personal Banking
Traditional finance infrastructure
▪ E-Money Regulation
▪ Card issuance and all card transactions should be fully comply with EU AML and KYC regulations
▪ No cards for individuals unless they meet regulatory requirements
▪ FCA regulation
▪ Regulation of digital currency exchanges under4AMLD already proposed
Compliance, AML and KYC
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Blockchain
▪ All blockchain transactions are public and fully traceable
▪ Risk-scoring system and internal policies
▪ Complex links to known entities, including legitimate companies, dark web marketplaces, gambling services and coin mixers
▪ Proprietary database of evidence linking real world’s entities to blockchain addresses
▪ Identified customers who do not meet requirements to be frozen and/or closed the associated accounts
Geographies
▪ EU▪ Africa (Morocco & South Africa)▪ Asia▪ Latin America▪ Canada / Australia
Adoption Curve
Demography
Customers
The Customers
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▪ Pioneers / Early adopters▪ Unbanked and Underbanked adults▪ Small Businesses▪ Traders 49%▪ Miners 47%▪ Work for bitcoin 45%
▪ Involvement:- Basic 22.6%- Sometimes 31.7%- Often 38.8%
18.40%
39.30%4.10%6.70%
9.80%
21.70%
Where customers buy/sell bitcoins
Local Bitcoins Exchanges ATM's
Work For Bitcoin Bitcoin Debit Card Other
▪ Age:- 19-25 26%- 26-35 34.4%- 36-45 31.7%
▪ Interest:- Investment 57.8%- Control money 51.1%- Remittance 31.7%
Bitcoin Debit Card
“Bitcoin can solve a lot of difficulties I've had with taking international payments, plus, would offer my clients another way of payment and potentially attract new customers, too. At the same time, the technology is still developing, and I could not take the risk of running my business purely based on Bitcoin - and that's where the Wirex card came handy. I can now have the best of both worlds, accept BTC payments and not worry about the exchange rates or holding too much money in Bitcoin”
- Andrey, Red Star's founder
Red Star Surf
Use Case
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▪ The most popular surf school and shop in the Spanish island of Lanzarote
▪ The wide majority of the students of the school and clients of the surfshop come from overseas
▪ Cross-border payments take time and come at a cost
Future Trends
▪ Combination of BTC and FIAT
▪ Merchants’ and individuals’ wallets
▪ Instant payments, fast settlements
▪ Mobile Apps instead of cards
▪ Lending
▪ Regulations
Mobile Payments
Conversions
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▪ BTC to FIAT
▪ FIAT to BTC
▪ FIAT to FIAT
Fintech Alternatives
▪ E-Wallets (Alipay, Google Wallet, PayPal)
▪ Remittance providers (Transferwise, Azimo, Revolut)
▪ ApplePay
▪ Blockchain based solutions
