Blockchain Adoption in Retail
We recently interviewed Brandon Burgason, Founder and CEO of Mobie and MobiePay. We explored challenges related to the retail payments space and how blockchain based technologies can help. We discussed topics such as current challenges in the retail industry, how blockchains lower the cost of settlement for retail payments, and why they chose Stellar instead of ERC-20 for their token.
What are the main challenges of the global population in making “purchases” or “transfers”?
The main challenges are not having access to banking systems and modern technology. The current infrastructure is archaic and very slow. This poses a real problem to the overall industry.
For mass adoption, we the majority of the population using blockchains. What are the main roadblocks for mass adoption of blockchain?
I think the main roadblock is the ease of use for blockchains. Currently, there are some very complicated systems in place that most users don’t understand. And I think until it is simplified, it’s gonna be very difficult for mass adoption to occur in the cryptocurrency and blockchain space.
The roadblocks on the merchant and enterprise side is that accepting cryptocurrencies presents significant volatility risk. Until there’s a way to stabilize volatility, many of these merchants won’t accept cryptocurrency.
What are the current challenges in the retail industry?
The current challenges in the retail industry are lengthy times to settle transactions and high processing fees for merchants. Funds typically take three to five days to settle for debit and 60 days for credit cards.
Chargebacks are also a big thing that’s plaguing the retail industry right now.
How will retailers and customers interact after the mass adoption of blockchain?
Financial transactions on a blockchain and mobile payment options will become the standard.
China’s is currently leading the world with technology and A.I. in the mobile payment space. When machine learning algorithms become more effective, consumers will be matched with content and products that are more aligned with the consumers needs. This is much more efficient that bombarding consumers with irrelevant ads.
This will also increase loyalty programs and improve supply chain management as well. When mobile payments are used, you can actually see what those customers are buying from what retail store, what brands, what time of day.
All of this data affects the supply chain and therefore making more intelligent decisions on how and when to bring those products into the marketplace, what retailers and what geographical locations.
Will the shift in underbanked populations go in the same way as in the digitized countries?
I think that the shift in underbanked and unbanked countries will be much greater and much faster than Western countries like the United States. For instance, in Mexico, 52 percent of the population is unbanked as opposed to the U.S., where there’s only an 8 percent of the unbanked population.
People in the U.S already have access to modern financial services like credit cards which means they wouldn’t be as motivated to use cryptocurrencies. People in Mexico actually need this technology to improve their quality of life. I think the transition in developing countries will happen much faster.
What are the 3 revenue model ideas for anyone considering blockchain in retail?
I think the biggest revenue model would be for the data. Data is the new oil, and data really affects everything in our life, and it helps companies become more efficient and help then market to their audience more effectively.
In addition, both merchant fees and merchant processing fees may be reduced. Finally, enterprise-level blockchain applications may increase efficiency which may increase retailers bottom line.
What are some interesting blockchain use cases for payments?
We’re working on several use cases right now at Mobie. One of them is in the ride share space. We’re enabling this company to not only send global remittances to scale their company on a global level but also enabling them to accept any type of currency as payment instantly and convert it into the local currency.
Another interesting use case is for another partner in the social influencer space. They came to us because they cannot scale their business. They cannot scale their business because they can’t pay these influencers efficiently and instantly. We enable them to pay not only in the U.S. but also globally via our token, which converts any cryptocurrency or cash instantly in their local currency.
How are you revolutionizing blockchain payment systems?
By creating a global sharing economy and payments platform where users are incentivized to transact with each other and other businesses in a frictionless and secure manner. Simultaneously we enable them to offer rewards back to businesses and organizations in need.
Why did you decide to use Stellar as opposed to ERC20?
Most projects and platforms are using ERC-20, Historically popular opinion is wrong. So when I wrote the white paper, I was looking for a solution that can actually fit in with my business use case.
Then I started learning about Stellar. I found out Stellar has some great aspects to it that many people don’t know. First, Stellar has a decentralized distributed exchange which allows you to convert crypto into fiat on the exchange. They also have what are called “anchors,” which are liquidity providers and other institutions or organizations around the world that provide the liquidity in that local currency. So essentially, they’re nodes, and each anchor provides liquidity.
Lastly, they have a lot of KYC and AML built into the wallet addresses. So it’s great for compliance. We are an actual currency. So when it comes to Stellar, there are smart contract-based, but it’s very limited. Therefore, it’s more secure. Not to mention, it provides more clarity to regulators since it’s a currency as opposed to a security or utility token.
If you were to summarize 3 main reasons why the retail should go with blockchain… It’s more cost-effective, more efficient, and more secure.
How do you envision blockchain changing the world?
I envision blockchain changing the world as it connects everything in a trustless manner. Unfortunately, we live in a civilization where people don’t trust each other. Companies don’t trust each other. In order for that to change, there needs to be a mechanism in place for people to transact, to make agreements in a secure and reliable manner, and they have to be immutable. Smart cities and countries like Dubai, started building their entire infrastructure on blockchain.
I see payments and global remittance for global economy making more and more progress every day. I believe blockchain is the fourth industrial revolution, and I’m happy to be a part of it at this early stage.
How do you think the market for the blockchain-based solutions will evolve?
Exponentially. I think the adoption curve will start to increase quickly as the naysayers about Bitcoin and blockchain technology are proven wrong. I think that you’re seeing a lot of comments by President Trump and other regulators in the U.S. that there’s a lot of money laundering and things that. These are bad associations for blockchain. However, in reality, fiat currency is used way more for money laundering than any cryptocurrency is.
Ultimately, cryptocurrencies and blockchain technology will change how we live and how we transact with each other.
BBH Gust: Brandon Burgason, Founder and CEO of Mobie and MobiePay
As Founder and CEO of Mobie and MobiePay, he is on a mission to adopt global payment gateway based on blockchain technology and bridge the gap between digital and local currencies enabling a revolutionary new payment standard. Previously, Brandon spent over 10 years in the finance and technology industries. His extensive career has enabled a unique vantage point for disrupting the cryptocurrency payments space.