Blockchain technology has been in the spotlight for the past few years, and for a very good reason. It facilitates digital transformation, and the growing adoption of the technology provides new use-cases for consumers and opportunities for investors.
We at Target Global are constantly investing in infrastructure for crypto. We were backers of Cryptofacilities (acquired by Kraken) that was behind the BTC price index used as the base rate for CME futures. We backed Copper in 2019 that has become the leading infrastructure for institutional investors dealing with crypto providing a full suite of services: prime brokerage, custody and settlements. Now we backed Mercuryo – the best solution for crypto on/off ramp that opens up the usage of blockchain technology for businesses all over the world.
Based on blockchain technology, cryptocurrencies feature continuously operating payment networks that entirely lack the need for intermediaries. For that reason, many companies have found success in implementing crypto for cross-border transactions, which generally go through inefficient payment networks in the traditional finance space.
According to the World Bank’s data, cross-border payments cost an average of 6.51% in Q4 2020 worldwide. In addition to the increased fees, international transfers can take up to five working days to arrive since the funds go through multiple correspondent banks before reaching the recipient.
In contrast, digital asset payments feature near real-time settlements (taking only 4-6 seconds to process) and 40-80% lower costs than traditional cross-border transactions, according to Deloitte. There are multiple use cases for such a product: B2B cross border payments and mass payouts just to name a few.
Due to the nature of blockchain technology, crypto payments can be easily tracked on the public ledger while featuring enhanced security through public-key cryptography and decentralised network architecture and consensus mechanisms. Blockchain technology has been increasingly piloted by multiple companies, including PayPal and MasterCard, which have announced their plans to integrate crypto payments into their networks.
Execution and user experience is key
DLT technology is still in the early stages of growth. For that reason, an appropriate infrastructure needs to be built around crypto and blockchain tech, so businesses within the industry can operate efficiently and in-line with the existing financial system. Everyone speaks about buying crypto, but it is apparently very hard to buy it – here is a great article on Coindesk describing what it really takes to convert fiat to crypto.
Founded in 2018, Mercuryo is now a global payment network that offers seamless fiat-to-crypto gateway services to businesses and private consumers. The company seeks to merge the disjoint digital asset and fiat worlds with a dedicated product portfolio. Currently operating services include a cryptocurrency wallet featuring an easy way to buy, exchange, transfer, and store digital assets, a widget for selling cryptocurrency via any online platform, and ever-growing crypto acquiring and OTC services.
Along with that, a new generation of products is about to be launched shortly. These innovations include fiat and crypto “in and out” services, Fintech Crypto SAAS for the banking sector, and mass payments for the GIG economy. Cross-border money transfers become faster, cheaper, and more straightforward with Mercuryo, as they result in only two operations: fiat-to-crypto and crypto-to-fiat exchanges. Sounds easy? Bitcoin buying also sounds easy till you actually try it yourself. As everywhere, execution is key.
Mercuryo is led by a team of seasoned operators from the payments space who know this industry inside out. It is the ease of usage that distinguishes Mercuryo from others. During the due diligence process I asked my team mate to download all the apps out there and try to buy crypto through them measuring “time to crypto” – what it takes from going to Appstore and downloading the app until crypto arrives in your wallet. Mercuryo came first with 6 minutes “time to crypto” – all in – KYC, funding, getting crypto. Second best result was 20 minutes and some apps took forever. Why does it matter? It shows the quality of crypto/fiat on/off ramp that is key for the suite of products the company is building – all of them effectively depend on that speed and UI.
It is not surprising traction is there – it is just a better product compared to anything in the market we have seen. We do not often see companies growing from EUR 1m ARR to EUR 10m ARR in less than 6 months.
We believe that existing payment methods with high fees, chargeback risks, and relatively slow transaction speed will quickly become outdated once the solid blockchain-powered payment infrastructure is built. We believe Mercuryo can become a game-changer in that respect.