Despite all the speculation and investment hype, the cryptocurrency has so far struggled to find meaningful use cases. There is now an effort from Singapore to convert the general public into crypto adopters through blockchain payments.
Cosmose AI, a nine-year-old company that uses AI analytics to track in-store foot traffic and engage with online shoppers, is partnering with Near, one of the blockchain protocols competing with Ethereum. The couple is building a payment system that allows users to buy with cryptocurrency at low transaction fees, saving money for both buyers and sellers.
As part of the partnership, the Near Foundation, Near’s non-profit arm that supports the development of the protocol’s ecosystem, has made a strategic investment in Cosmose. The round, the amount of which has not been disclosed, brings the company’s valuation to $500 million, up from $100 million when it closed its $15 million Series A financing in 2020.
Cosmose’s suite of retail solutions includes the KaiKai app that enables customers to discover retail stores in their physical vicinity and an online wayfinding platform, both of which are being revamped on the blockchain with the help of Near.
Miron Mironiuk, the founder and CEO of the company, had no intention of riding the cryptocurrency wave; rather, he was looking for a solution that would make online payments cheaper for the consumers and vendors Cosmose serves.
“I’m not sure if you know how expensive and slow it is to process online payments. It’s absolutely crazy,” Mironiuk told TechCrunch in an interview.
He gave the example of buying a $5 cup of coffee. Payment processing companies like Stripe and PayPal effectively charge more than 10% for small transactions, so the seller ends up raising prices, forcing the buyer to pay 6-10% more. In a year, the coffee drinker could easily be spending an extra $200 just because the transactions are handled by middlemen like Stripe.
pay with crypto
With its Near-powered blockchain payment system, KaiKai, where users can discover nearby products and pay through the app, it claims to reduce the transaction costs of annual coffee consumption to just $4, which is 50 times less than the Stripe or PayPal method. according to Mironiuk.
“Imagine how much you could save if all payments were moved to the blockchain,” the founder said.
Not all blockchains are cheap to use. One of the biggest challenges facing crypto adaptation is the exorbitant fees involved. Without a centralized settlement system, cryptocurrencies rely on a distributed network of validators to verify on-chain transactions. That process on Ethereum is notoriously expensive, so alternatives like Cardano, Pokadot, and Near have sprung up to make cryptocurrencies cheaper and more scalable.
Cosmose’s shopping discovery app, KaiKai, settles payments in its native stablecoin Kai-Ching, which runs on Near’s network. The app creates a crypto wallet for users, who can top up Kai-Ching with fiat currencies. In the future, users might have the option to convert Kai-Ching back into fiat.
Cosmose maintains a treasury for Kai-Ching, which is pegged to US dollars (1 Kai-Ching = 1 USD cent) and can only be traded within the app to avoid value volatility.
KaiKai first launched the option to pay with crypto in Singapore last September, where the government is in the process of formulating stablecoin regulation. Since then, Kai-Ching has processed more than 1 million transactions in the form of payments, refunds, and rewards.
Prices are automatically reduced when users choose to pay in Kai-Ching. More than half of Ka-Ching’s users are Gen-Z, and they are “super comfortable” with cryptocurrencies because they know “the coins are on the chain” and “they belong to them,” the founder observed.
The company declined to disclose how many cryptocurrency users it has amassed, but one data point sheds light on its user behavior: A third of transactions are paid with Kai-Ching. Given the traction in Singapore, it won’t be surprising if Cosmose brings Kai-Ching to other crypto-friendly jurisdictions in the future.
Own your data
Cosmose and Near are onto something that seems even more ambitious. One of the promises of blockchain-based apps is to give control over personal data back to users instead of keeping it on Big Tech’s centralized servers.
Essentially, Near is helping Cosmose migrate user data onto its blockchain and build a system where users can see how the company tracks them, including their location, when they open the app, what products they search for, and for how long. remain.
The goal is to store user data on their phones using edge computing and allow people to decide how they want to be tracked in order to receive more or less accurate product recommendations and rewards.
“It is not just a technical challenge. It’s also a UX challenge of how to do it in a way that people can actually check it out and get insights and decide quickly,” the founder said.
Since its inception, Cosmose has served more than 20 million stores and reached a billion phones worldwide, with China accounting for “hundreds of millions” of them. The company has a team of 80 employees in Warsaw, its engineering base, as well as in Shanghai, Hong Kong, Singapore, Tokyo and Paris.