VIDEO: Paycase Financial CEO Joseph Weinberg on Bitcoin Technology for Overseas Transactions

MidasLetter Live

Paycase Financial is a digital, secure service that allows for affordable and flexible ways to send money overseas, using bitcoin technology. CEO Joseph Weinberg talks to James about the private, invite-only tech, as well as why they chose Bitcoin over Ethereum.


James West:     Joseph, thanks for joining me today.

Joseph Weinberg:     Thanks for having me.

James West:     Joseph, give me an overview: what is it that Paycase Financial does?

Joseph Weinberg:     Yeah, so Paycase Financial traditionally was focused on the remittance space – so, remittances and cross-border transactions. So really, the question that we looked initially at solving was, how do you move money around the world using the Bitcoin that work and multiple different blockchains as a way to settle cash into different countries.

Over time, we’ve started to now work on the new diversification products that would span beyond just moving money cross-country, so, how do you allow consumers in Canada to access Bitcoin as an asset class? There’s kind of a variety of different areas within that realm, I guess.

James West:     Sure, okay. So when you say ‘remittances’, is that sort of like a Blockchain replica of the Western Union model?

Joseph Weinberg:     Yeah, exactly. So we use the Bitcoin network to basically enable massive reductions and massive efficiencies from a cost and transport time perspective, as does someone like a Western Union.

James West:     Okay. And so is this up and running now?

Joseph Weinberg:     Yes. So we’ve actually been, we’ve had users for the last six to eight months; it takes about two years to build, and to do things from an efficiency perspective. Yeah, but it’s launching and scaling right now.

James West:     Okay. So I’ve got my uncle Pablo in Ecuador who I want to send $500 a week; I’ve got $500 CDN cash; how do I get it to him?

Joseph Weinberg:     Yeah, so basically you’ll sign up into Paycase, your onboarding services will be through KYC, which is another customer and anti-laundering verification check. Once you’re signed in, you basically will then send a bank transaction into Paycase, and actually the beauty of it was that when we built it for this whole purpose was to the idea that you’re never supposed to actually know that Bitcoin is being used. So we kind of take away a lot of the complexities from that perspective and make it so that Canadian dollars goes in, and Filipino pesos or Ecuadorean-denominated FIAT will return to the receiver or sender on the other side.

James West:     Okay. So how do they access the funds? They go to the Paycase site, they get something printed out to take to a bank or a –

Joseph Weinberg:     No, so it’s all digital.

James West:     Okay.

Joseph Weinberg:     So basically, you’ll walk into – or we have, we’re actually going with some shops that have traditionally been a brick and mortar type service. So you’ll basically walk into a shop or you’ll go onto online to, you’ll sign in, do an Interac wire or some kind of a bank transfer on the sending side, and then basically we will then take that money, flip it into Bitcoin, pretty much near instantaneously transfer it into another country, and then we have a variety of cash-out outlets and options that allow the receivers to actually pick up money the same way they have the last 30 years.

So in the Philippines, for example, we have about 25,000 cash-in, cash-out locations.

James West:     So is it just limited to a few countries at this point, or are you sort of global?

Joseph Weinberg:     Yeah, so, Bitcoin inherently is global. We really kind of focused in making sure the corridors that were specific to Canada initially were really the big focus, so Canada’s outward remitter per capita in the world. So we actually send more money out per person for our population size than any other country.

And so the big countries that we had focused on primarily were Philippines and then India. So India will be launching very shortly within the year, and then we’ll be kind of expanding that quite rapidly and a whole suite of other Bitcoin-related products as well for the Canadian market.

James West:     Okay. So in the other countries, they can only access the local currency or, probably, USD…

Joseph Weinberg:     Yeah.

James West:     But certainly not, they can’t actually have Bitcoin?

Joseph Weinberg:     Well, you can. I mean, you could make it an option. Like, the one thing that we noticed was that when you’re looking at it from a remittance market, you know, your average age population, immigrants who are coming to the country, it’s a big technological gap already. Traditionally we’re used to, in the remittance industry specifically, you know, walking in and going through a physical process. So the leap even just to digital is a very big change.

And our philosophy was always like, why, like if I send you, say, a Facebook message, or I send you an SMS over an iPhone, you don’t really sit there and say “I’m using the protocol http or tcmp”. You look and say, “I’m sending a Facebook message”.

James West:     Right, right.

Joseph Weinberg:     So our belief has always been, you would use Bitcoin as a transfer rail mechanism and just allow them to really use it for what it’s useful for, as opposed to saying, here’s this complex process of Bitcoin. That was our initial philosophy. I think that that’s starting to very much change over time with, of course, the big rise over the last couple quarters in Bitcoin. So we’re starting to now re-focus on our bread and butter, which is being in the Bitcoin space.

James West:     Okay. So is your choice of Bitcoin because it’s already so mature relative to the other ones, or is it conceivable that Ethereum, with its smart contract sort of feature set, will become a superior transport mechanism in the future?

Joseph Weinberg:     Yeah, so I spent a long time with the engineers behind both the protocols, and so we’re very heavily involved in the actual Bitcoin core development process. And so one thing that we kind of look at was the question of really, number one, there’s a lot of hype, and I think that this is both a good thing and a bad thing. And I think that the complexities that we’re seeing in the space today is a question of, well, what really works and what is trying to understand what it is going to become.

What we really early on in the Bitcoin space recognized was that, from an engineering perspective and an architecture perspective and kind of an innovation perspective is that Bitcoin is really an infrastructure that enables financial transactions. It’s a way for creating sovereign money or some form of asset that is really kind of a stored value in my perspective. And so, when we look at what are the properties by which the Bitcoin network versus Ethereum might, for example, operate in, what we found was that Ethereum is good at – well, we’re still trying to find a use case, and it is a lot less mature, of course. But we also realize that its value is not in transfer, and that its value is used for things like smart contracting. And that’s what’s fundamentally different methodology than moving money.

And so it’s really a question, I think, right now, and people are trying to educate themselves is, how and what are these things useful for. Although you can move Ethereum back and forth between people, that’s not really the properties by which the protocol is really there to enable.

James West:     Sure. So by that argument, then, Bitcoin is not really so much a currency so much as it is just a transport mechanism for currency-based stores of value.

Joseph Weinberg:     Exactly, and that’s what my belief is. I think that it acts more as a – call it a digital gold, in many respects. I think that from a base layer, and to be honest, what I think really Bitcoin is, it’s a network of trust. And I think that what you’re seeing today is the market cap of Bitcoin is exceeding, and kind of massively increasing, is really the question of, if you were to build something like a product and you were to call that the ‘trust product’, right, what is the value of trust to people across societies? And whether you’re in countries that are developing, countries that are war-torn, or live in the Western world, that the value of trust differs, but trust is a very, very important thing, and I think it’s something that, you know, the traditional financial world has somewhat lost. And Bitcoin comes in to solve that problem.

James West:     So then, is there an opportunity for investors to participate in Paycase?

Joseph Weinberg:     Yeah, so, we’re about to be announcing a bunch of things. We’re a private company, of course, and have kind of taken that position for quite a while; we’re working on a couple of other projects, and we’ll be doing a private financing round into the next quarter with a lot of large announcements, a lot of institutions in the country, which will expand far beyond remittances, and re-establish a lot of interesting things, I would say.

James West:     Sure.

Joseph Weinberg:     But yes, there will be many more opportunities.

James West:     Okay. Well, that’s a great introduction. We’re going to leave it there for now. We’ll come back to you and be following with interest. Thanks for joining me today.

Joseph Weinberg:     Thank you.

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