Pavel speaks: Asia Tech Podcast with Michael Waitze

Our CEO Pavel Matveev joins Michael Waitze on the Asia Tech Podcast to share his inspiration behind Wirex. This 45-minute podcast delves into bitcoin, blockchain, and banking. They also discuss the current state of the crypto market and ICO projects. Read the fullpodcastbelow:  

Michael 00:04	Hi, this is Michael Waitze from ATP Crypto, and I am talking to Pavel Matveev, the CEO of Wirex. How are you doing today?
Pavel 00:12	Hey, I'm doing great and thanks for having me.
Michael 00:15	Oh, it's my pleasure. So just refresh my memory again. Where are you based?
Pavel 00:22	I'm in London at the moment. Our company have three offices. It's London, Tokyo, and we have bitcoin [inaudible] in Kiev. It's in Ukraine. So most of the time, I'm traveling between these three destinations.
Michael 00:38	And how long have you been working in Wirex?
Pavel 00:43	Wirex is a three and a half years old company.
Michael 00:47	Got it. And where are you from originally, just for context?
Pavel 00:53	Originally, I am Russian, but I've been living in London for, I think, seven or eight years.
Michael 01:02	Yeah. I think all of us do this, right? We're born in one place. We grew up in one place, and then we just leave and we just build a life in the world somewhere, right? I think I've kind of done the same thing as well. So I think that's-- I like to call myself a third culture adult. Maybe you've heard of third culture children. And I think it helps to build out of what's going on in the blockchain and cryptocurrency world, anyway, to have people all over the world. And they need to be able to transfer stuff and use the distributed ledgers. We can talk about that later, but can you tell me a little bit about your background and what led you into Wirex anyway? How did you get here?
Pavel 01:37	Okay. Before Wirex, I was working in investment banking industry, mainly here in London. So I worked in a lot of tier one investment banks including Morgan Stanley, Barclays Capital, Credit Suisse, Societe Generale, and BNP Paribas. So I was mainly working on the trading floor, developing trading systems, trading algorithms, and trading strategies, and it's what I was mainly doing for a living before Wirex. And we started Wirex about four years ago. The reason actually why I moved from investment banking to this kind of startup environment-- this is really two different environments. One is corporate, and another one is startup environment in a very, very new industry. The reason for this move is that four years ago when I first time read about blockchain and bitcoin, I was really fascinated about technology. And I'm still really interested and fascinated about blockchain and what cryptocurrencies can do for payment industry and for society in general. And we started thinking, "Okay. This is a really great technology." About four years back, it was really for geeks. It's still kind of niche market and we're slowly moving to this mass adoption market, but it's still kind of niche market and mainly for geeks or for IT savvy people. About four years ago, we thought, "Okay. It's a great technology. So how we can use it in our everyday life? We want all people to start using it, so we need to do something about it. We need to make it simple. We need to introduce it in everyday life." And it was our main challenge and we started brainstorming how we can do it. And then we basically came up with the product we have right now, and it's how we started Wirex.
Michael 04:01	So can you talk to me a little bit about what about the technology? What was it about blockchain back in 2013, or 4 years ago, that really got you interested? You looked at it-- because you're a technologist, I presume, by training, or at least by profession. If you're building trading systems, writing algorithms, or doing that type of research sitting on a trading floor, when you saw the blockchain stuff, what was it about it? Was it the distributive nature of it, the decentralized nature of it, just the sort of technical efficacy of it? What was it about it that said to you, "I have to go and participate in this"? You also mentioned sort of the benefit to society. So what is that, too?
Pavel 04:40	So the first thing which was really interesting is that it was super new. It was super new and there was no really specialist on the market kind of. You're absolutely right. I've got a degree in computer science and most of my career was doing IT or kind of IT in financial space, so it's mainly related to trading. So that's why I kind of like new things. I like new gadgets. I like new technology. It's really kind of really interesting for me. The second point of it was - you're absolutely right - the distributed nature of blockchain and bitcoin. So back in the days, it was mainly bitcoin, so now you have this kind of split, the cryptocurrencies and blockchain. So the financial institutions and banks are all talking about, "Hey, we do blockchain projects, but we don't work with cryptocurrencies." Back in the days, it was just bitcoin. So distributed nature and it's really cool because you don't have one authority which controls the kind of money supply. And it kind of opens a lot of possibilities in the payment industry or how people use money. So, for instance, I give you a couple of examples. So, for instance, bitcoin is actually the most traceable currency in the world. People new to bitcoin might think it's totally anonymous, but in fact, all transactions are recorded on a blockchain and publicly available to view online, which is excellent for anti-money laundering or for fighting this corruption.
Michael 06:34	Right, in KYC as well, right?
Pavel 06:36	Exactly. So I don't understand, but media and press love to associate bitcoin with a crime or ransom, but it is actually far more traceable than cash or money sitting in a Swiss bank account. So the other benefits of cryptocurrencies is great for value transfer, right? So let's say I've got bitcoin. I'm sending bitcoin to you and it doesn't really matter where you leave. You can leave here in London. So I'm sending value to you, what the money is, right? So some form of value. And I can send this value or money to people in Africa where people don't even-- most of the people don't have a bank account. So they use smartphones to receive value and to exchange money. So these kind of benefits I was like, "Okay. We can do it with traditional banking instrument, and this is really great opportunity for society, for kind of global economy where you can move money freely from one person to another. You don't need to have intermediate financial institution on bank. You don't need to allow these institutions to transfer money, to keep your money. You can be your own bank. I think it's a bit overuse slogan beyond bank. But it is actually quite true. With cryptocurrency, you can be your own bank and you can control your own assets.
Michael 08:10	Can you give me your opinion on this as well? So if I deposit my money into a bank, right, who owns that money then? And how's that different from a peer-to-peer connection or a peer-to-peer sort of transfer of money from me to you? I'm just really curious about-- I think it's very nuanced and very subtle, but I want to make sure that people understand what it is and your perspective on that.
Pavel 08:37	So if you deposit money to banks, so bank-- so what banking license allow you to do is to use this money as a form of loan to other people. So, yes, you can see your balance maybe in your online bank account, but this money is actually belongs to bank.
Michael 09:01	It does belong to the bank. I think its pretty clear though that once you give your money to a bank, you don't own it anymore.
Pavel 09:09	That's correct. Yeah. That's correct. But there're a lot of actually use cases. So when the bank give loans for big amount when they actually have money for, or let's say if a lot of clients are trying to withdraw money, the bank doesn't have enough money and they basically need to shut down the activities. It's not happening in Europe anymore but it's happening in other countries, in other developing countries, kind of every month. So it happens in the bank.
Michael 09:50	We saw this in the savings and loan crisis in the United States in the '80s, and we also saw it again during the financial crisis in 2007 and 2008, globally, right? I mean, Iceland banks went into big problems because of their investments in derivative securities. I mean, I watched all this happen, not from the sidelines but from the frontline, so I understand that completely. Can you tell me more? Because I want to talk about why I specifically, in a second, but more importantly, I want to talk about how the peer-to-peer transfer of value, right, without saying money. How does that significantly change the ability for people that are underbanked or unbanked to be able to, even potentially, pull themselves out of poverty?
Pavel 10:38	So with peer-to-peer connections, you basically don't need to rely on a bank. So what bank is for, they kind of represent trust. Historically, in order to transfer money from one party to another, you need to rely on some kind of intermediate trustful entity and the banks are this kind of entity. In the world of Internet and peer-to-peer connection and even cryptocurrency happen, you don't really need this third party you can rely on. You can send money to other people and doesn't really matter where they live. And talking about unbanked population, so there are different estimates but different reports saying, "It's 1 billion or 1.5 billion people in the world." And for them, they don't have access to a banking infrastructure.
Michael 11:33	At all.
Pavel 11:33	At all. That's right. And they can use this peer-to-peer connection or wallet to keep the value or to keep funds, and they can use this for payments. They can use it to exchange for goods, and so this is-- and I think for then, it's a way to go. It's a way to escape poverty or to be linked to kind of existing banking infrastructure, I would say, or kind of global economy.
Michael 12:10	Yeah. If you don't mind, I'd love it if you could and I don't care if it gets technical. You talked about trust. So how a big bank or global financial institution is there because people trust the fact that if they use them as a transfer mechanism for money that they know it's going to happen on the other side. Can you talk about how the blockchain itself removes the necessity for an intermediary and yet still ends up being more trustworthy? What's the trust that's built into the system and how does that work? And even if it's a technical explanation, I'm happy to listen to it.
Pavel 12:42	So the idea of a blockchain is that the transaction on a blockchain-- so all the nodes in ecosystem can verify that this money, these funds, this value belongs to you. So that's why you don't need to have this third party. You don't need to trust third party because the distributed nature of blockchain and millions of nodes, they prove that you own this money. So this is the main idea of a blockchain, the main beauty of a blockchain. It has some kind of drawbacks as well, especially when we're talking about making decisions about let's say, how we're going to scale bitcoin, right? So there is a lot of debates going on with the different folks. So distributed nature of blockchain has definitely some benefits but has drawbacks as well. But if we're talking about the banks and this trusting third party with blockchain, basically, you don't need to have a third party because the ecosystem itself proves who owns what.
Michael 14:05	And how is that done? Is that done mathematically? And what's the output of that mathematical algorithm then that proves that that ownership is mine?
Pavel 14:14	You have a private key and public key. So there is a concept of wallets. But what wallet is really is it's a private key, which guarantees that you have access to these particular addresses or to funds on these addresses. And when you make transactions, you need to send transactions with your key and only you, the person who owns the key, controls the funds on these particular addresses. So if you want to move them, you need to sign a transactions and then move into different addresses to a different person. So the person who controls the key owns the money.
Michael 14:59	And how do I sign that? How do I sign each one of those transactions? How does that happen mechanically or logistically?
Pavel 15:07	I think the easiest way to sign a transactions for non-key savvy people is just to use one of the existing wallets. There are, again, different types of wallets on the market: hardware wallets, online wallet, mobile wallets as well. So for people who is not in crypto, already using crypto, most of them probably already using different types of wallets. So this is the really good thing. Our main goal is that people don't really need to understand all these technical details in order to start using cryptocurrencies. Because if we want all people to understand technical details and how blockchain works internally, we won't convince the society to use cryptocurrencies because it's impossible. So that's why we want to make it as simple as possible. And with the simplest way, just to get the wallet and the wallet will do all the magic for you for sign-in transactions, for keeping your transactions and wallet safe, and so on and so forth.
Michael 16:18	Right. So I like to make the equivalency to the Internet itself, right? In other words, most people are happy to send emails. They're happy to have Skype calls. They don't even know how the backend works, but if I sat around talking to them about TCP/IP, I think their eyes would glaze over. And I think at some level, this is at least similar, or at least the same type of conversation. They don't need to necessarily know how it works but as long as they have an active wallet that's working, they can then start to use cryptocurrency, I believe. So tell me this. You and your team are kind of strategizing about what the best way is to use this. Now, maybe, we should get into a conversation about exactly what Wirex and how it works, and why it's good and what its growth is like, and where you expect it to go going forward.
Pavel 17:05	Sure. I can probably give you a brief company summary and then I'll give you some numbers. So, as I mentioned earlier with the three, three and a half years old Fintech company, so headquartered in London. At the moment, we have 1 million customers worldwide. And just to explain to you, the main idea is-- we call Wirex as a personal finance platform. But our main technology is cryptocurrency debit cards. We were actually the first company in the world who introduced cryptocurrency debit cards. And what this cryptocurrency card is, is a Visa card which is linked to your cryptocurrency wallet, and it allows you to use your digital asset anywhere where Visa or MasterCard is accepted. And it's more than 40 millions of merchants in more than 200 countries. And, actually, why we need this card? So, as I mentioned, cryptocurrency has these benefits, right, good YML, the most traceable currency in the world, good for value transfer. Okay. That's absolutely fine. So the reasonable question is, "Okay. Why people don't use it in everyday life?" And that is very simple. Just can't. You can't go to Starbucks and buy a cup of coffee with your bitcoin, because merchant adoption is not there yet. Actually, its just 0.3% of all merchants in the world at the moment can accept cryptocurrencies.
Michael 18:50	0.3. 30 basis points of merchants globally can accept it. That's small.
Pavel 18:55	That's correct. That's correct. It's very small. So it's definitely not enough for people to use it. And this is the main stopper for cryptocurrency adoption. So our idea was-- okay. So as I was explaining earlier, we want to make it simple, right? We want to grow it from niche market to mass adoption. How can we do it? And our idea was, "Okay. We need something people are familiar with, or people use it in everyday life, and something they can trust." And that's why we came up with the idea of card. Okay. Card is actually part of our everyday life. We use it online, in stores, to withdraw money in the ATM, and it's physical. So some people still have this-- they still need to have something in their pocket, even if it's-- not really represents a value, but then they have a card in their pocket. They understand, "Okay. I have money on this card," even if the money is stored in a wallet somewhere. So that's why we came up with the idea of a card.
Pavel 20:10	And the idea here is that instead of convincing all the merchants in the world to start accepting cryptocurrency, it will take decades. What if we use already existing rails of card networks, from millions and millions of merchants? So, instead of convincing all the merchants, we can already use existing rails and just plug in cryptocurrency into it. And this is the main idea. And it's how we're pushing the cryptocurrency adoption. Because if I were a card, you can basically use cryptocurrency anywhere. And there is one interesting thing about this. So we were talking about value transfer and cryptocurrency is great for that. So I have a value. I sent a value to you. Okay. We now solve this issue of remittance, right? We solve the issue of money transfer. Now what? Can you use this? Can you use these cryptocurrencies? So it's exactly the same problem, right? So you have a value but you still need to use it then. You still need to buy your everyday stuff like coffee, or pay for services. And this cryptocurrency debit card is actually a last mile solution for bitcoin or blockchain-based remittance.
Michael 21:41	So how does it work, though, specifically in the sense that-- let's say I have a job and I get paid in pounds, all right? And then I have a debit card that's a Visa card, how do I get my cryptocurrency onto that? How do I connect that debit card to my cryptocurrency? How do I get the cryptocurrency itself? I have to take the money that I've earned and buy cryptocurrencies, right?
Pavel 22:08	There are different use cases. So with Wirex, what you need to do, you'll just download the application. We provide you the cryptocurrency account. We accept more than, I think, I believe, 55 cryptocurrencies at the moment and we issue you a card. So now you have a card, a fiat account and cryptocurrency account. And there are different use cases. Let's say you have cryptocurrency already, or you receive payment in bitcoin or cryptocurrencies. This is really a very growing area that people use crypto for payrolls, especially for international payrolls. I'll explain you the idea. So let's say you have international company, a company doing international business, and you have 1,000 employees and you need to pay money. So if you do it from your bank account, let's say in Japan, you probably will pay for every wire transfer or for every bank transfer. It's good if it's not expensive remittance corridor, or you don't have too many intermediate banks. Let's say you pay $25 per transaction.
Michael 23:25	Right. That's the normal price for it, or if you're going to do a bank to bank transfer.
Pavel 23:28	That's correct. Yes. And it's a lot of money just on transferring volume. So a lot of company nowadays using crypto to save money on money transfer costs, especially when we're talking about international money transfers.
Michael 23:48	Okay. So then, if I get that money into my wallet, would I get a card from Wirex? And I connect that wallet to the Wirex card. How easy is it to do that?
Pavel 24:00	So you download the app-- it's really easy. So you download the app, you go through registration process which will take you a minute or two and they issue a card. So it can be virtual or plastic, and it's linked to your cryptocurrency wallet. And then you can do two things. You can either transfer your cryptocurrency, if it's those case. If you already have your money, you receive them as a salary. Then you use your card, the funds will be deducted from your cryptocurrency account, or your use case, when you have pounds, you can load pounds into fiat account as well, in the current account. And then it's up to you. You can convert them into cryptocurrency if you want to send them, or you can keep it in fiat. So we have this kind of-- we give people a choice. So you can keep everything in fiat if you want to and use it as your regular debit card, or you can do 50-50 bitcoin and fiat, or you can convert everything in fiat. So it's really up to you. There are a lot of possibilities how you can use it. So we don't really want to limit all our clients like, "Hey, you can only keep your money in cryptocurrency." Because we believe it doesn't really make practical sense, mainly of bitcoin volatility. So it's good. At the moment, it's going up so everybody--
Michael 25:33	Everybody's happy right.
Pavel 25:35	Yeah. It can go down as well [laughter], so.
Michael 25:38	Yeah. It's a market, so things can go up and things can go down. Although structurally, it has to go up, I think. That's just my opinion but, anyway, go ahead. But I like the fact that you give your clients and your customers choices, right? They can hold any currency they want in it, or they can transfer 50% of it, or some percentage of it into cryptocurrency. Does that mean that if I have a Visa card - that's a Wirex Visa card - I can use it for regular transactions? And how do you get the relationship with Visa? That's actually very interesting to me.
Pavel 26:08	So, absolutely right. So it's a regular Visa card. It can be used online or can be used in paying in stores or withdraw money in ATM. So with Visa, we have a partnership with different Visa issuers in different regions. Even where Visa is a global company, you need to have these licenses in different regions in order to upgrade. So we have partners in Japan, in Singapore, in Europe, in Latin America. We're planning to launch-- we've a new partnership in the US later this year as well. So it's how we connect. So we have this relationship with issuers, and we also have relationship with big financial institutions in Japan. And we leverage these connections in order to get access to Visa infrastructure.
Michael 27:16	And can you explain to me-- you said earlier that you have a million clients across the world. So what kind of marketing or what kind of, sort of, market access did you have to do to get a million people to use your card? So that's a million people that have issued a brand new card from you, not using their existing Visa card, but got a brand new Wirex Visa card from you. How long did that take? And how did you get a million people to do that? That's a lot.
Pavel 27:46	It is. Yes. We're currently actually getting 4,000 customers per day, and it's more than any retail bank onboarding clients per day in Europe. Any bank retail onboarding less clients and we-- again, because it's mobile [app?] cash, and it's everything online. We mainly rely on digital marketing, so different advertising, Google advertising, paid social influence and marketing, these sort of things. But we don't have offices where we sell cards, so we don't distribute cards in some grocery stores, so it sounds like that. So it's mainly digital. You can get a card very easily online, do all the KYC online, lock your card, update your limits, everything, in application.
Michael 28:49	Yeah. Sorry. It's just fascinating to me. So I mean, I myself-- you probably already know this, but I've downloaded the application, right? So I'm going to go through the whole process myself. But I just want people that haven't done it yet to understand how simple it is. And if you have a million people using it-- so, how do they-- structurally right. If I get a Visa card issued to me by a bank, right? So let's say I have a bank account at Mitsubishi UFJ bank in Tokyo, which I do. And if I have a credit card through them, if I spend money on my credit card or debit card, that money gets deducted directly out of my bank account in yen. So if I spend in dollars or if I spend in euros or in rubles, then automatic FX transaction takes place. I also get charged for that FX transaction, right? And then some money gets automatically every month deducted from my bank account, paid up against the Visa card and I'm back flat to zero. Right?
Pavel 29:42	That's right.
Michael 29:43	So how do you handle that on the Wirex card? Particularly, from a foreign exchange standpoint, and also from the exchange standpoint from fiat currency into bitcoin, which you said is a little bit [inaudible]. I just want to understand what people are dealing with when they're transferring into the cryptocurrency. How do they know what they're going to get? What rate they're going to get for that and for even for FX to fiat to fiat?
Pavel 30:05	This is really a good question. And in short, we have a lot of integration on our bitcoin system. We're actually the first company in the world who has production-ready implementation of Lightning Network, which is off-chain liquidity network for cryptocurrencies.
Michael 30:25	Can you say the name of that network again, please? Just so I can remember. Say it again. What's the network name?
Pavel 30:30	There's a concept Lightning Network--
Michael 30:34	Got it.
Pavel 30:35	--in bitcoin space. So I can explain you the idea.
Michael 30:39	Please do.
Pavel 30:39	Let's say bitcoin. I'll be using bitcoin as an example. It's relevant for all the cryptocurrencies as well. So blockchain itself, because of the distributed nature, it's not really scalable. Yes, you can scale it by increasing the block size and so on and so forth. But there is a limit on how many transactions you can do per minute, per second. And it's far, far less than let's say Visa is doing this at the moment. And definitely if we want to use cryptocurrency as a payment instrument, not just kind of alternative investment instrument. As most of the people are using cryptocurrencies at the moment. So let's say we want cryptocurrency to be used for payments. Okay. Now we need to solve the scalability issues. Now we have this, of a distributed nature side effects, where you need to agree on a block size. Again, increased block size is still temporary solution. Really, the only solution for scalability is off-chain solution. What it means, yeah, there is a concept of Lightning Network, which exists in other blockchains [inaudible]. But you have off-chain systems, which is another blockchain. Let's say which goes in parallel, and you can do millions and billions of transactions per minute on this blockchain and then push the final balance on the main blockchain. So it's still on a blockchain but this Liquidity Network or Sidechain, allow you to process millions and billions of payments. And by doing that, you can actually process millions of transactions and use cryptocurrency for payment. Because payment is billions of transaction per second, especially when you're talking about a global scale.
Michael 32:48	For sure. Right. Go ahead. Sorry, I interrupted you.
Pavel 32:53	Just to answer your question about what rate we're using. So we're using real-time rate. So we have this Liquidity Network and in this Liquidity Network we plug in a lot of liquidity providers, like exchanges or OTC, over-the-counter traders. It's quite interesting actually. Most of the trading is going on OTC market, not on exchanges.
Michael 33:21	You're talking about foreign exchange, yeah?
Pavel 33:23	I'm talking about cryptocurrency exchange. Yeah. Forex market by nature is OTC market, traditional Forex.
Michael 33:32	Yeah. By definition. Right? Yeah.
Pavel 33:33	Yeah. Traditional Forex, there is no centralized exchanges. We have exchanges in cryptocurrency world but it's mainly historical. Because there is no central authority which can supply local currency. But even in cryptocurrency space, most of the trades in volume is going on on OTC market. So we have all these liquidity providers in our network, and what it means-- so think, it means we have very deep liquidity pool. So we can exchange like millions and millions in value. And the second thing, because we have many providers, we can get very good trade for our customers. It's real-time rate. The user always see the rate they get and it's how we do it. Okay, and the second part of the equation was, "Okay. How you do fiat to fiat conversion. And for fiat to fiat conversion we actually integrated with a fixed brokers, two or three of them at the moment, but we-- the idea is that we have these liquidity providers and we plugged in cryptocurrency traders, fixed traders, and this combination allow us to provide rating any currency path. It might be a bitcoin, JPY, might be bitcoin, Russian ruble, bitcoin USD, or you might exchange actually euro to GDP with intra-bank rate. And use our card as an excellent travel card, so it's another use case.
Michael 35:24	So yeah. It's another great use case. And a lot of people use their credit cards for loyalty points as well, what are you doing in the loyalty space? There're bunch of companies that I've actually spoken to a bunch of them as well, but how do you-- for frequent flyer mile, for branded cards, there's Visa card for every kind of brand as well, is there a way for you to branch out and do that too? So have a partnership with-- pick a store, I don't know Isetan, and have an Isetan Visa card, but then that Visa card actually was also a crypto as well?
Pavel 35:57	It's loyalty point. I've heard actually why-- let's say talking about Japan, so in Japan, it's mainly credit card. And in Europe, it's mainly debit card. And I was curious why people don't use debit cards and why credit cards are that popular, and the answer I get is that, "Because we are getting points." Right? You can get more points with credit card. Yeah. There is a reason for that why credit cards usually have more miles or points because the merchant fee, the fee merchant pays to credit cards is higher than they pay to debit card schemes. So it's kind of-- credit card issuers share some of this profit in form of points.
Michael 36:48	Right. So if there is a 3% credit card fee, I get 1% back, it looks like I'm getting some kind of deal. But actually the only thing that's happening is the credit card company is giving me an in-kind, right, in-kind, not a monetary payment but an in-kind payment that they're hoping that I won't use, I'm guessing.
Pavel 37:06	That's correct. So usually, the merchant is called interchange fee. It's two, three percent for debit cards and might go to five, six percent on credit cards. And why actually merchants are willing to pay higher fees is because the usage on credit cards is higher. Because people are not spending real money but the money they're borrowing. So that's why people tend to spend more on credit cards. That's why merchants, even with a higher fee, they're accepting this form of payment. And you are absolutely right, part of it comes back to you as loyalty points or some kind of incentives, so you spend more. So it's how it works. So answering your question about loyalty points. Loyalty points is very important to get this loyalty of clients. And we're planning to announce quite a few very, very big partnership later this year. So it's on our radar. There is no loyalty schemes at the moment. There will be in the very, very near future.
Michael 38:21	And will you partner with someone that's already built a blockchain or crypto-style loyalty? Or, will you build that on your own?
Pavel 38:31	The problem with partnering with blockchain and cryptocurrency project is that with self [inaudible], a lot of ICO projects which-- most part of ICO projects, probably it's just white paper. There is nothing going on there. The second part of a cryptocurrency project is still a blockchain project. It's still a PoC level. And when you have a choice, okay, either work with a non-existent cryptocurrency loyalty program, or with an already existing business with a million clients, or develop something yourself. So we decided to do it ourselves, plus partnering with existing loyalty points schemes.
Michael 39:26	Right, which is kind of the same thing you did with the cards, right? In other words, you could have your own branded card. But why not just go to Visa, which as you said, that lane already exists for payments why not just use it? Yeah.
Pavel 39:36	Exactly. So Visa spent a lot of years developing all this infrastructure and all these schemes. So there's no point to invent a wheel here. We can just use existing infrastructure and get the benefits for our customers quicker. Because in a new industry, in a new market, a time to market, it's really crucial. We can spend ages developing ourselves and actually it might not work, so what's the point?
Michael 40:05	Yeah. I like the strategy. Right. In other words, develop the stuff on your own that you have to develop. But if there's an existing lane already that already does that, why not partner with somebody who already has millions of clients and millions of payment points, right? That's the Visa strategy, but also the loyalty strategy, as well. I think it's a really great way to do it. There's no reason to reinvent that wheel again. Fair enough. Now you brought up the ICO market. Do you have a view on what's going on in the ICO market? And you may not want to talk about it at all, but do you have a view on whether you would issue your own ICO, or participate in your own ICO?
Pavel 40:42	I'm happy to talk about this. Just to be honest, we haven't done ICOs, so we're not ICO company. Maybe if you asked the same question, ICO companies or companies would be successful. I'd say we have a different opinion. But I think a lot of experts in the industry agree that what's going on in ICO at the moment is the wild west. There are a lot of companies with empty promises. Literally, what you need to do, you just create a 10-page white paper and maybe do community building. And you will be ready to raise millions. So no due diligence. No protection for investors. A lot of ICO companies are trying to come up with different schemes, how to avoid punishment from regulators or stuff like that. So a lot of people in the space are waiting for US regulators to say what the rules for ICO companies. It's a challenge for regulators, as well, because ICO is relatively new. So cryptocurrency industry, it's new. But ICO is like super new. So we still need to come up with the rules for that. So there are two different camps and two different ideas, how it's going to be regulated either similar to IPO or similar to crowdfunding.
Michael 42:27	Right. So, from a funding perspective, what are the best options for you? I presume you don't-- maybe you don't need to fund anymore if you've got a million clients worldwide. There are a few more places where you may want to expand, I would presume, but you didn't mention the rest of Asia outside of Japan. So I would presume that that's one of your expansion points, which is interesting to me, obviously, because I live here. But I'm just curious how you fund that growth then.
Pavel 42:54	So ICO is a great way to raise money. And it's absolutely fine maybe for company which don't have existing business. So you don't lose anything, right? You do ICO. You raise money and when you do business, if you get shut down, okay, you don't have a business so you have nothing to lose. It's a bit more complicated when you have an already existing business and a client base.
Michael 43:24	Right, because then you definitely have something to lose, right?
Pavel 43:26	Exactly. So now you need to consider all these risks, right, how it's going to affect you, how it's going to-- especially when you're working in kind of dual environment, like a traditional and cryptocurrency. So we still use traditional infrastructure, the card infrastructure, so on and so forth. So we need to be careful about this. And it's a risk for our business if we do ICO right now because there is no rules. And if the rules will be introduced in half a year, it might affect our business. So it's an uncertainty and it's a risk. How we raise money? So we have a strategic investor. It says BI Group. It's quite well-known Fintech player from Japan. We're closing our series B within one month. So we're raising money traditionally. The venture capitals, it's mainly at this stage is corporate. The venture capitals which actually can help us to grow in our strategic markets, like Asia Pacific, Europe, US. Again, because we have a good customer base, we generate revenue. So it's like a really new business. It's not revenue at all. But we raise money traditionally and it's how we grow our customer base. Just one more thing I'd like to mention, is that I said ICO is good for raising money, it's absolutely true, but for young companies, for startup, money is just part of the success. The second part is strategic partnerships. If you're talking about the global business, you can't be in all the countries at the same time. So you need to-- if you want to conquer the world, you need to partner with the local players. So you need some kind of alliances with the payment institution, or with the bank, or with the other startups, or with companies with existing client base, or the companies who can add value to your service. And traditional investment can give you this partnership or can open a lot of doors, which ICO can't.
Michael 45:59	Right. I mean, this is one of the big problems with an ICO is that unless there's institutional participation, which in some cases there is, but in most cases, there isn't. But if there isn't institutional participation in your ICO, then your ability to get partnerships is just another step in the process. That always seems to me, or in some cases, it seems to me that maybe the better thing to do is to raise money through a traditional-- you're doing corporate but you can do venture capital as well, as long as those venture capitalists have relationships with the institutions with whom you'd want to partner. Yeah?
Pavel 46:28	That's correct. Yes.
Michael 46:30	Interesting. Look, I think this has been an incredible conversation from me. I've learned a lot, and hopefully, you've enjoyed yourself. But I really want to-- I don't wan to take up too much more of your time, but I really want to thank you for taking the time all the way from London, and just for spending the time telling me more about your company. I feel like this is not the last time that you and I are going to talk about this. I know for sure I'll talk to Kevin some more about this as well, but I really appreciate you taking the time to do this. And do you want to just say, Pavel, where people can reach you if they have any more questions or just what the URL is to download the app so that people and more people can understand how to get at it?
Pavel 47:08	So they just may go to wirexapp.com, where you can register online or just type Wirex in Google Play or Apps Store and download the application. There are all contact details on the website. And again, as I mentioned, there're all the processes can be done from your mobile phone.
Michael 47:31	Awesome. Thank you again so much for your time.
Pavel 47:35	Welcome. Thank you for having me.