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Ähnlich wie Automated cross chain-fiat exchange solution concept --- How WeChat can leverage Pay global strategy by apply blockchain to eco-system
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Automated cross chain-fiat exchange solution concept --- How WeChat can leverage Pay global strategy by apply blockchain to eco-system
- 1. Prepared by: Duc Pham Trung Duc.phamtr@gmail.com Skype and Wechat ids: sycks_ For: Allen Zhang “WeChat Globe” A unique opportunity on how WeChat can revolutionize financial transactions through automated currency conversion
- 2. Presentation Agenda Introduction walkthrough Introduction 1 2 3 4 5 WeChat Blockchain Technology Cryptocurrency Disruption Future token economy„Globe“ WeChat evolution To domination of chinese app market Key factors of success Why payment integration worked so well? WeChat Pay as market expansion strategy How does the technology work? What are cryptocurrency and is it money? Advantages of cryptocurrencies Finance disruption Snapshot: reaction of finance industry App domination Problem statement Brief solution Smart Contracts „Globe process“ Main components Actors Advantages of „Globe“
- 3. WeChat has built its success on integrating its way into its users’ daily lives and integrating all of their most popular brands and services. This is all tied together by a dependable, seamless payments system. WeChat – King of Apps 02
- 4. WeChat Timeline From messenger application to platform for everything Disrupting Telcos 2011 first release of the messenger application with goal of cheap alternative to SMS. After further integration of Voice/Video calls telcos were heavenly disrupted. Social Media Platform Through “Moments” and Official accounts users and official entities were able to have a content feed for users to subscribe. A effective way to reach the growing mobile consumers. Mobile Payment Integration WeChat Pay provides an easy and convenient solution to B2C and C2C payment. Consumers can pay with their phone, so can go cashless, with no need to carry change. Mini Programs By offering native app-like experiences within WeChat, mini programs should empower SME to have more flexibility in providing content & features. Users also benefit, as they will not have to leave WeChat to enjoy a seamless experience.
- 5. 5
- 6. WeChat a full ecosystem One App to rule them all
- 7. Leader of cashless society with over 300,000 offline stores accept WeChat pay 7 Key factors for WeChat Pay success • Leverage of whole ecosystem through finance transactions • 83% Mobile payment adoption corresponds with user shift from desktop to mobile as 90% china traffic mobile • 84% respondant hongbao most used wechat pay feature • 93% adopted offline payment • Strategic partnerships eg. Jd.com 33% of chinese users have purchased with wechat pay WeChat Pay Seamless mobile payment integration to whole ecosystem 33+% mobile payment market share in china, after only 3 years
- 8. 8 Going Global ”WECHAT TEAM’S STRATEGY FOR GLOBAL EXPANSION IS NOT FOCUSED ON GETTING USERS. INSTEAD THEY WISH TO PROMOTE WECHAT AS A PAYMENTS AND MARKETING SOLUTION FOR BUSINESSES TO REACH CHINESE CONSUMERS.”
- 9. WeChat Pay Payment feature as gateway to Chinese WeChat ecosystem Global strategy localized strategy is characterized by expanding WeChat Pay with multiple partnerships of banks and offline stores. Then chinese tourist act as soft landing in these countries. Low network effects Cultur differences & Protectionism Not a ecommerce company Localisation takes a lot of ressources Mobile payment slow growth vs china Finance danger of disruption Difficulties of WeChat Pay expansion
- 10. Every new pay payment innovation has helped to make payments faster and more efficient. Blockchain technology 03
- 11. 11 Key characteristic: 1. Decentralized shared database as finality 2. Consensus-based and transactional 3. Provenance, transparent and auditable 4. Secure and Immutability 5. Orchestrated and flexible How does it work?Disruptive superior technology
- 12. 12 Money has to fulfil three functions – the better a good can fulfil these functions, the more it is seen as money Medium of Exchange Definition: Can be used to intermediate the exchange of goods and services. Use: A common ground for determining value. Example: A community uses beaver pelts as a medium to trade for other goods. Is cryptocurrency money? Currency based on mathematical algorithms Store of Value Definition: Maintains its value over time. Use: Can be spent or exchanged at a later date without penalty. Example: An ounce of gold could buy a toga in Roman times, yet it can still buy a nice suit today. Measure of Value Definition: A standard numerical unit of measurement of market value for goods, services, and other transactions. Use: Can be used to compare goods using a common system. Example: Housing prices in Germany can be compared using the € as a unit of account.
- 13. 13 Speed & efficiency • Faster transactions • Validation and verification is much faster • Eliminates need to use settlement and registration systems • Significant potential to reduce transaction costs Advantages of Cryptocurrencies Cryptocurrencies are superior to paper money Both fiat currency and cryptocurrency can be called money or currency, both are mediums of exchange that are used to store and transfer value, both can be used to purchases goods and services, both have their value governed by supply, demand, work, scarcity, and other economic factors, both have their value affected by the quality of the system surrounding it, both can be traded on exchanges, etc. Disintermediation • Automates trust • Elimates third pary intermediaries • Decentralised ledger assures trust No control • Tokens supply is transparently controlled, cannot be printed • Token just represent itself, never debt • No authority over blockchain Improved market access • No entry barriers, eg. Unbanked people • Global markets become more easier accessible
- 14. 14 90% of major north american and european banks are exploring blockchain 63% of german banks managers expect change in their business model in the next 10 years because of blockchain technologies 66% of major banks have commercial blockchain products at scale next 4 years Finance industry reaction Once understood, everyone realises the potential of blockchain “In a lot of areas, it looks like the blockchain will replace the current centralized business model of the financial services industry and it is easy to see how it could revolutionize all of Wall Street. The ability of the technology to provide an unforgeable record of identity, including the history of an individual’s transactions, is one area being eagerly explored” David Grace, head of global finance at PwC “I’m reasonably confident … that the blockchain will change a great deal of financial practice and exchange,” “40 years from now, blockchain and all that followed from it will figure more prominently in that story than will bitcoin.” Larry Summers, US Former Treasury Secretary
- 15. Setting Opportunities in perspective, with 2 graphics containing saving estimation numbers ´by experts and survey respondants for financial industry. 15
- 16. Bitcoin cryptocurrency is the first mainstream adoption of blockchain technology. State of blockchain 2017 04
- 17. State of Blockchain Q4 2017 Year of mass awareness, a matter of time till mass adoption
- 20. State of Blockchain 2017 Year of mass awareness, a matter of time till mass adoption
- 21. State of Blockchain 2017 Year of mass awareness, a matter of time till mass adoption
- 22. Belong to the past Or be a early adoptor of the future? “You can’t stop things like Bitcoin. It will be everywhere and the world will have to readjust. World governments will have to readjust” John McAfee, Founder of McAfee. 24
- 23. Solving the biggest problem of token mass adoption, today. „Globe“ automated currency conversion 05
- 24. 26 We all want to buy/pay online convenient & protected, anywhere & anytime with the type of currency of our choice. Doing so should not require massive resources and rely on inefficient redundant processes but rather automatically executed without our further notice. The biggest problem of the future token economy We are at the beginning of the internet of value and economy of token/cryptocurrency assets Problem statement
- 25. 27 Solution: (P2P) or ‘decentralized’ exchanges are operated and maintained exclusively by software Establishing an interconnected system with necessary elements like the core „exchange“ smart contract, arbitorary entitities, network of exchanges to automate data & verification processes necessary for currency conversion and consumer protection (multisignature). The underlying solution does automate cross – chain - fiat conversions so that participants pay/buy with desired currency without notice. WeChat “Globe” Automating cross-chain-fiat conversions through smart contract for everybody
- 26. 28 02 03 01 agent neutrality in signing deals The main advantages of smart contracts A smart contract is a coded agreement or set of rules that govern a business transaction; it’s stored on the blockchain and is executed automatically as part of a transaction or when certain conditions are triggered. 04 automation in signing deals, time saving: excludes human participation in transactions, everything is done by the prescribed programm code safety: data in the decentralized registry cannot be lost and cyber attacked precision: no mistakes can be made due to the absence of hand- filled forms How does it work?True chamption of blockchain revolution
- 27. 1. Seller creates offer on wechat (underlying conversion smart contract), Option to choose desired currency (A) 2. Buyer buys product (sees price in fiat) 1. Buyer pays with chosen currency (B) = conversion rate to (A) + spread 3. Decentral smart contracts gets automatically executed, by final condition trigger(2.1), and at first exhanges (B) to (A) involving all necessary data manipulation with participants 4. Escrow service and multisignature secure the participants final transaction of (A), 3 signature are given it takes 2 to transfer (A) 5. Seller receiving signature option is proof of sucessful conversion and private key splitting, Seller now sents out the product and puts digital signature for succesful transaction 6. Buyer 2 action options: 1. Righfull product received, confirmed via digital signature and 2/3 signature to finalize deal (transaction) 2. Issue detected with product delivery, refuse to sign and contacts arbitrorary service 7. 7. Judging transaction and evidence of both sites under company rules and trade law to make rightful 3rd signature Globe Process A efficient blockchain cross-boarder „currency conversion & transaction“ solution 29
- 28. Main components of globe Essential components to make globe payment service possible multicurrency wallets/accounts A specific “Globe” Wallet/Account has to be created which availability is necessary for the “Globe”system, uniquely linked to that ecommerce account/wallet. Smart contracts “Globe solution” contains several interconnected smart contracts to do automated currency exchange. Core smart contracts is the contract handling the transaction to exchange and after exchange apply multisignature. API’s Several API’s have to be created to make integrations to other systems also smart contracts possible. (ecommerce platforms, payment systems, user wallet). (possible)Exchange platform Create own decentralized exchange which handles the “currency exchange” smart contract itself, forms partnerships with other liquidity providers. Arbitrary service The arbitrary is great responsibility as it is passing judgement, in case of dispute or claim. Arbitrary service has to be law conform, fair and just, taking evidence into account and decide with logical reasoning. 30
- 29. Actors of Globe Actors of globe are internal and externals. Retail 02 Exchange 03 Globe operation 04 Arbitrary Service 05 Users 01 Merchants Merchants & E-commerce platform which directly integrate the payment solution via API into there system. Exchange Exchange platform or partnerships that provide liquidity to the platform and which exchange rate variables are fetched and included in “exchange smart contract”. Design Options Globe “management, operation, governance” responsible for determining exchange rates, add and remove partnerships, list and delist currencies. Users Users who send and receive currencies through the system. Users include individual users, smart contract accounts and retailers. Arbitrary Service Arbitrary service provider for consumer protection functioning as final judge in case of transaction dispute. Cryptocurrencies transactions are final and not protected by government, by applying multisignature to the transaction 01 05 02 03 04 31
- 30. 01 Drastically improve efficiency Exchange runs on chain allowing „smart contract“ to directly interact with exchanges without third party intervention ro receive funds/payments from currency they do not support originally 04 Arbitrary escrow with Multisignature Extra layer for consumer protection to mass market retail adoption, as usually cryptocurrency transactions are final but there is a time gap between order payment and order receivement. 02 Secure & trustless as by design operator does not hold the currencies and integrity is ensured by smart contract terms. 05 Hedging against price fluctuation Since currency (B) is instantly converted to (A), value of (A) is secured of market movements 03 Compability Globally integratable through API‘s with other systems and smart contracts doesn‘t require modification inunderlying core protocols eg. „exchange smart contract“ to function. 06 Underlying solution for everyone Usage of smart contract does not require finance or technical knowledge Advantages of “Globe” Leading the rising disruption of blockchain economy as a “first mover innovator” from China 32
- 31. 1. What should WeChat do ? There is really an unique opportunity for Wechat to be a first global mover with the proposed “WeChat globe” leveraging its current power and success in the China market. Weight probability of rising token economy off and decide on next actions. Leading the rising disruption of blockchain economy as a “first mover innovator” from China; using the proposed “WeChat Globe” to provide a global efficient solution for currency transactions. Apply blockchain technology, to accelerate the current strategy “WeChat’s” for global expansion, using “WeChat Pay” as global entry to whole ecosystem. Leveraging WeChat ecosystem for acceptance and provide blockchain enormous oppurtinities/benefits to Chinese consumers. https://news.cgtn.com/news/30596a4e78677a6333566d54/share_p.html 33 “PayPal had these goals of creating a new currency. We failed at that, and we just created a new payment system. I think Bitcoin has succeeded on the level of a new currency, but the payment system is somewhat lacking. It’s very hard to use, and that’s the big challenge on the Bitcoin side.” Peter Thiel Co-Founder of PayPal Global problem and unique global opportunity for WeChat Leading the rising disruption of blockchain economy as a “first mover innovator” from China
Hinweis der Redaktion
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- 93% user in t1 WeChat has built its success on integrating its way into its users’ daily lives and integrating all of their most popular brands and services. This is all tied together by a dependable, seamless payments system. We tend to think of advertising first, but WeChat has so far achieved huge success without availing of the platform’s advertising potential. By first building an engaged (in some cases, addicted) user base, it is now in a supreme position to provide them with useful advertising. gradually became a dominant force that serves an alternative to email, text messaging, and countless other digital processes. USER TIME SPENT Browsing and posting on Moments (58%); Sharing information, including image, voice messaging (53.5%); Reading content via followed public accounts (39.8%); Sending and/or receiving money, including the Red Envelope Payment Feature (33.9%); Mobile payments (32.5%); Sharing stickers (25.3%);
- Strong competition in china solely from Alipay while battle for chinese mobile payment expands globally, also because china is nearing saturation. https://technode.com/2017/08/18/alipay-vs-wechat-challenges-and-strategies-of-two-payment-giants-going-global/
- Alipay vs wechat pay global
- https://technode.com/2017/05/05/wechat-pay-coming-to-us/ She shared status quo of WeChat payment’s overseas expansion. Japan: In the past one year, the expansion to Japan was rather good, according to Grace, collaborating with many local players. WeChat aims to make a better product, upgrade quality, benchmark local companies for local merchants, and further their expansion in the retail and traffic sector. Taiwan: WeChat has Taiwanese bank partners. Taiwan’s local stores are interested in WeChat payment and are active in adopting it. South Korea: WeChat expanded to South Korea earlier because the local merchants had a better understanding of WeChat. WeChat said they are not concerned with KakaoPay, a Korean payment service for local people because Wechat is targeting only Chinese people. She said it is not difficult to penetrate countries where credit card payment is already widespread, such as Japan and South Korea. “We are going to target Chinese tourists in those countries, so introducing WeChat payment there is not so different from doing it in China,” she said. are continuing their internationalization strategies by forming overseas partnerships and making overseas acquisitions. http://blog.wechat.com/2015/11/25/south-africa-launches-wechat-wallet-the-first-country-officially-outside-china/#more-4169 There are other ways to expand, innovative more out of the box ways. 15 countries avaible, 12 currencies However, WeChat Pay is lagging behind in terms of global expansion and partnership, mostly because Tencent is not an ecommerce company and thus doesn’t enjoy the synergies with the ecommerce and logistics platforms. Also, Tencent doesn’t have an equivalent of Ant Financial — an independent financial services arm to design and implement coherent corporate strategies. CONTRA this: Key for expanding WeChat Pay was growth of popularity of mobile payment in china, red envelope, gaming payments and integrating offline and banking systems.
- Key characteristic blockchain technology » Decentralized shared database as finality: Function & Information held on a blockchain exists as a single shared — and continually reconciled — database. A global network of computers uses blockchain technology to jointly manage the shared database that records transactions, independent on any central authority. » Consensus-based and transactional: All relevant network participants must agree that a transaction is valid through the use of consensus algorithms. Each blockchain network can establish the conditions under which a transaction can occur. » Provenance, transparent and auditable: Privacy is maintained through cryptographic techniques and/or data partitioning techniques to give participants selective visibility. Participants in a transaction have access to the same records, they can validate transactions and verify identities or ownership without the need for third-party intermediaries. » Secure and Immutability: Permissions and cryptography prevent unauthorized access to the network. After conditions of transaction are agreed on, participants can’t tamper with a record of the transaction; errors can be reversed only with new transactions. » Orchestrated and flexible: Because business rules and smart contracts (that execute based on one or more conditions) can be built into the platform, blockchain business networks can evolve as they mature to support end-to-end business processes and a wide range of activities.
- Medium of Exchange Definition: Can be used to intermediate the exchange of goods and services. Use: A common ground for determining value. Example: A community uses beaver pelts as a medium to trade for other goods. Unit of Account Definition: A standard numerical unit of measurement of market value for goods, services, and other transactions. Use: Can be used to compare goods using a common system. Example: Housing prices in Japan can be compared using the yen as a unit of account. Store of Value Definition: Maintains its value over time. Use: Can be spent or exchanged at a later date without penalty. Example: An ounce of gold could buy a toga in Roman times, yet it can still buy a nice suit today. In other words, money must meet be: Divisible: Can be divided into smaller units of value. Fungible: One unit is viewed as interchangeable with another. Portable: Individuals can carry money with them and transfer it to others. Durable: An item must be able to withstand being used repeatedly. Acceptable: Everyone must be able to use the money for transactions. Uniform: All versions of the same denomination must have the same purchasing power. Limited in Supply: The supply of money in circulation ensures values remain relatively constant.
- Transactional properties 1.) Irreversible: After confirmation, a transaction can‘t be reversed. 2.) Pseudonymous: Neither transactions nor accounts are connected to real-world identities but through so-called addresses, which are randomly seeming chains of around 30 characters. 3.) Fast and global: Transaction are propagated nearly instantly in the network and are confirmed in a couple of minutes. Since they happen in a global network of computers they are completely indifferent of your physical location. 4.) Secure: Cryptocurrency funds are locked in a strong public key cryptography system. Only the owner of the private key can send cryptocurrency. A Bitcoin address is more secure than Fort Knox. 5.) Free & Permissionless: You don‘t have to ask anybody to use cryptocurrency. After you installing or using certain software you can receive and send Bitcoins or other cryptocurrencies. No one can prevent you. There is no gatekeeper. Monetary properties 1.) Controlled supply: All cryptocurrencies control the supply of the token by a schedule written in the code. This means the monetary supply of a cryptocurrency in every given moment in the future can roughly be calculated today. 2.) No debt but bearer: The Fiat-money on bank accounts is created by debt, and the numbers, you see on your account represent nothing but debts. Cryptocurrencies don‘t represent debts. They just represent themselves. Every Cryptocurrency has their own currency generating process. They can be divided in three types: Utility token, Equity token and hybrid token.
- ICO VS VC, Transaction volume per day,
- Mass attention not just finance industry
- Immature Technology: eg. Scalability is an issue as bitcoin transactions take much longer than VISA (the reason why many 2nd and 3rd Gen blockchains have much more advanced technology to solve all technological challenges ahead of blockchain, right now we are at war of protocols) Political fear: Government, Lobby, Regulators still try slowing blockchain technology off Low customer protection mechanism or regulation in cryptocurrency transactions unlike fiat which is protected by government and banks Volatility: High price fluctuation, eg. by payment of ordered product the coin might have dropped in value. No convenient solution for online/offline retail to integrate cryptocurrency payments, for seller to receive crypto at choice and for buyer to pay with any currency. Manual processes are inefficient and rely on technical knowledge, additionally central exchanges (eg. Banks) are operated and regulated by humans, biased, raise security concerns and add up resource cost. (esp. Multiple currency conversions))
- Seller creates product offer enters desired currency Buyer buys Auto decentral exchange Store Currency
- Real to do: Gain awareness/understanding about revolutionary/superior blockchain technology. Accept it‘s disruptive technology and innovation potential. Consider based on facts the likelihood of blockchain evolving into a new token ecosystem based on cryptographic mathematial coded protocols. Think about if potential upsides, outweigh the risk. Decide, if you take the bet. If yes our proposed solution might put you in a very favorable position.
- 11TR market of crypto = best case