As mobile payment adoption grew and trends upward, so did the need for better security and better transfer rates, which are historically based on brick-and-mortar banks and standard remittance organizations such as Western Union. Report after report also shows that these small transfers would come with an average fee of 7.53 percent. In prior years, fees could be up to 10 percent, and thus catapulted the need for market disruption. DigitalX, formerly a Bitcoin-based digital payments company and Bitcoin miner, last year put their stake in the ground to tackle this particular issue, but infused it with their learnings from Bitcoin’s blockchain technology. Now a FinTech company, DigitalX is making blockchain remittance a possibility through the use of their app, AirPocket. To gain a better understanding of how DigitalX is utilizing this technology and why the market needs to be disrupted, we sat down with their CEO and Cofounder, Alex Karis.
Understanding Blockchain Remittance
One of the more technologically sound and accepted component that came from Bitcoin was its blockchain. The blockchain is a public ledger of sorts that shows every Bitcoin related transaction that has ever occurred. Beyond this, it does get a bit complicated, but it’s one of the foundations that DigitalX, even Visa Europe, in an effort to make transferring small amounts of money feasible. For Western Union, they play the final step, taking a currency transfer and turning it once again into a physical currency. For DigitalX they use a fiat currency, but rather than paying a ridiculously high fee at the end, it can be exchanged to top off mobile minutes data, and into the future even pay other utility bills. Not only is DigitalX bringing mobile payments to under-served markets, their focus is not specifically on the technology, but the usability to the consumer. In most cases they don’t even discuss how or why the blockchain works, it’s just about ease of use.
Challenges from Pivoting
When Bitcoin mining became less effective, DigitalX was forced to pivot. Having already accepted outside funding, their first initial hurdle was to get buy-in from their current backers.
Prior to Blockchain Remittance
Before Alex and cofounder Zhenya Tsvetnenko joined forces on DigitalX, the duo worked together in the mobile marketing industry and quite a few other projects. Later in 2013 they got together in California to discuss how mobile was evolving and the role digital currencies were starting to play. They made an initial investment into bitcoin mining hardware, even receiving outside funding to support the mission, all before the process would become unsustainable. Bitcoin mining hardware become costly, as did the power to run it, which eventually overpriced the value of the bitcoins it mined. With software already in development, a mobile wallet, they began to shift their business plans with buy-in from their investors and the rest is history.
The Future of DigitalX
As the FinTech market continues to expand and organizations find new ways to disrupt components of our financial norms, we were curious what plans DigitalX had for the future. In standard startup form, we didn’t squeeze too much out of them.
