We recently caught up with Mark Smargon, CEO of Fuse.io, a Fintech company that aims to connect everyday payments to the blockchain without compromising on user experience. Fuse.io is focused on leveraging the latest decentralized finance (DeFi) infrastructure to offer a unique platform to businesses that allows them to “turn communities into economies.”
Our discussion is shared below.
Crowdfund Insider: What major flaws do you see in mobile payment applications today and how do you think blockchain and cryptocurrencies help create a better payment system?
Mark Smargon: Building and deploying mobile payment applications is currently restricted to big corporations. These include banks (and fintech companies which are dependent on them), big tech and large retailers. There are a few players that have cornered small parts of the market.
They compete with each other and it’s not in their interest to work together to create a user experience that is seamless across all platforms. Even if they wanted to work together, the underlying infrastructure would make it extremely difficult. This causes friction and has a negative impact on user experience. The result is that we are still very far away from realizing the true potential of mobile payments. Arguably, you could look at WeChat in China as an example of a widely adopted, successful mobile payment solution but there are huge concerns around privacy and security.
The open-source nature of blockchain takes away any friction that we might experience with legacy systems. And the network effect means that it is very much in the interest of application builders to work together to take payments to a new level.
Crowdfund Insider: Blockchain technology is known to settle both national and international transactions within a matter of minutes and that too at a reduced cost. How does this technology achieve this?
Mark Smargon: The speed comes from the fact that a blockchain is basically one mega computer shared by operators and participants all over the globe, meaning the flow of information is much more fluid. This is compared to traditional systems where many different computers have to communicate with each other, often with the need for human intervention, which makes things slower.
As for costs, these are reduced because the job of processing transactions is shared by operators across a large network and there are mechanisms built in that make it difficult for network participants to gain a monopoly. Regulatory costs are also reduced due to the fact that no organization needs to custody the assets. Blockchain development is also generally cheaper because it benefits from ongoing community support and isn’t subject to costly contractual and commercial traps that are inherent in closed systems.
Crowdfund Insider: What is the value proposition of Fuse and what difference will it make for businesses as compared to traditional payment platforms?
Mark Smargon: We aim to make a difference for businesses by saving them money on transaction fees, unlocking economic growth in the regions where they operate, and giving them back privacy that has become common for big corporations to abuse.
Fees on Fuse Network are set at $0.01 regardless of whether $1 or $1 million is being moved. Our sweet spot is in areas of the world that have high smartphone penetration but where cash is still the predominant form of payment. Blockchain technology allows for greater privacy. It also allows operators on the network to create rewards, bonuses, and other incentive-based systems with the goal of encouraging people to transact locally, retain wealth within micro-economies and unlock business growth.
Crowdfund Insider: Fuse enables businesses to build these customized “micro-economies.” What are these “micro-economies,” how do they function, and why do you think businesses need it at this very time?
Mark Smargon: Our economy is already made out of those smaller economies. For instance, every marketplace is a tiny economy. If you add a loyalty token to it, you are actually managing monetary policy at a tiny scale. People have been doing this for years with cash – now we want merchants, marketplaces, organizations, fan clubs etc. to be able to replace paper with a digital alternative.
Crowdfund Insider: What is Fuse’s “Veiled Crypto” approach and what exactly does this bring for the customers of Fuse?
Mark Smargon: We don’t want to shove crypto down consumer’s throats. Instead, we aim to provide experiences that replicate what they already know. This means that we cannot encumber them with clunky things like private keys, verification times, and transaction finality. It has to be non-custodial, decentralized where it matters and open-source. But it also has to be seamless; providing a “WeChat-level” user experience.
Crowdfund Insider: How is Fuse currently being used by other businesses and what are the use cases from which businesses are reaping the most benefits?
A couple of examples:
South African Digital Rand. Based in Johannesburg, Fuse is used to store and transact with their newly issued, ERC-20 compliant stablecoin. This means local consumers are not only able to make mobile payments to business 247 365 on our decentralized network, but they also have immediate exposure to other currencies such as EUR or USD through the inbuilt decentralized exchange. This is hugely beneficial in a country that has experienced major inflation and financial instability in recent years.
PawWise. This is a POC that onboarded merchants and the wallet downloaded by residents of Trinidad and Tobago. The PayWise Points is a simple and affordable way for businesses to build their own loyalty programme. Businesses purchase points from PayWise and give the points to customers. Customers then redeem the points at the businesses for discounts on purchases and from PayWise agents in lieu of fees. Points received by businesses and PayWise agents can be reissued to customers or sold back to PayWise.
Crowdfund Insider: What are some of the future plans and milestones for Fuse?
Mark Smargon: Future plans include more plug-ins for new functionality on the Studio and further development on the decentralized exchange side of things as we see this being of great value to the community we have built. The wallet is getting an overhaul with better tools for users. And we’ve also got a huge network update coming up in Q4 as well as token staking, a lot more partnerships in and outside of crypto, and of course, more product updates.