Full Transcript: Why MoonPay and PayPal Partnered to Expand Crypto Adoption in the U.S.

Jennifer Sanasie: With the latest collaboration between MoonPay and PayPal (PYPL), users in the United States can effortlessly acquire cryptocurrencies using their PayPal accounts. This groundbreaking partnership supports transactions via wallet transfers, bank transfers, and debit card payments. MoonPay is currently the first company to offer such a service with PayPal. In an interview on First Mover, Ivan Soto Wright, CEO and co-founder of MoonPay, discusses how this partnership contributes to the wider adoption of cryptocurrencies. Let’s delve into that now, welcome to First Mover, Ivan Soto-Wright.

Ivan Soto-Wright: Awesome, thanks for having me.

Jennifer Sanasie: Appreciate your presence here. This partnership was recently unveiled. To ensure we’re on the same page, could you please explain in simple terms how it will function?

At MoonPay, Ivan Soto-Wright explains, our goal is to bring the world into the crypto community. To achieve this, we’re always exploring new payment options and regions for expansion. PayPal presented an excellent opportunity due to its massive user base of 426 million people, who can now effortlessly use their PayPal balances or saved debit cards within MoonPay to fund their preferred wallets.

Jennifer Sanasie: I’d be happy to discuss this topic, but I feel it’s important to consider the other perspective as well. So, let me play the role of a skeptic for a moment. Can you share some compelling user stories that illustrate why people should embrace crypto? And could you paint a vivid picture of what the future holds for this technology?

As a researcher in the field of financial technology, I strongly believe that cryptocurrency holds great potential for the future of money. This shift will likely follow a pattern similar to the evolution of the Internet, which significantly reduced communication costs. Currently, we use VoIP and protocols for instant messaging, whereas in the past, we relied on expensive telephone lines and snail mail. In the same vein, cryptocurrencies aim to replace traditional financial systems with a decentralized blockchain network. The ultimate goal is to bring transaction costs closer to zero as technology advances, although we’re still in the early stages of this transformation. It’s crucial for us as researchers and developers to focus on lowering barriers to entry and making it easier for people to participate in this new financial ecosystem.>

Expert: Jennifer Sanasie: Approximately how long do you estimate it will take for us to transition from the dial-up era to the 5G era in terms of widespread adoption?

Ivan Soto-Wright: Intriguingly, Ethereum’s layer two solutions and some other blockchains have brought us close to zero transaction costs and gas fees, instilling optimism. Moreover, fresh layer one blockchains are emerging. We don’t favor a specific blockchain for success; instead, we believe in the coexistence of multiple platforms. The deciding factors will be their unique use cases and the resulting performance.

As an analyst, I can’t provide you with specific years or make predictions about the future. Instead, I can suggest potential scenarios based on current trends and data.

Ivan Soto-Wright: In my opinion, MoonPay’s growth has mirrored that of the internet remarkably. Five years ago, who would have thought that over 20 million users now utilize their platform? The pace of expansion is truly astounding. However, I believe we’re still in the initial stages. Using market capitalization as a benchmark, if we consider the current value of gold at $12 trillion and Bitcoin at around $1 trillion, there’s significant room for growth in terms of adoption for this asset class.

As a researcher, I’d be interested in delving deeper into the experiences of the 20 million customers you mentioned, specifically regarding the difficulties they encountered during the process of adding fiat currency to the platform using methods such as bank cards. Could you please expand on the nature of these challenges? Were there technical glitches, long waiting times, or other types of obstacles that caused frustration for users? Understanding these issues will help us identify potential solutions and improve the overall user experience.

Ivan Soto-Wright: I’m sad to admit that as a co-founder, we frequently hear complaints about people being unable to use their cards for our crypto service due to rejections from their banks. Regrettably, we can’t control that issue. Some banks choose to decline transactions involving cryptocurrency. To provide a more consistent user experience similar to traditional fintech, we plan to collaborate with established fintech companies like PayPal, which is trusted by over 426 million users, and legacy fintech platforms. This partnership will allow us to integrate their services within our crypto ecosystem.

Jennifer Sanasie: Have you engaged in discussions with any banks regarding potential collaborations on this issue? I understand that it’s not unique to MoonPay, as many platforms enabling crypto purchases and trading in the US and Canada face similar challenges. However, have you held any talks with banks about this matter?

Ivan Soto-Wright: Indeed, we maintain close connections with various players in this sector, continually pondering ways to enhance the user experience. Some financial institutions have revised their regulations, while others haven’t. The distinction lies in their readiness. Similar trends are observable in the ETF realm. Certain entities have chosen to opt out entirely, whereas others like BlackRock, are embracing it wholeheartedly.

Jennifer Sanasie: Could you please provide some insights into the current activity levels of your 20 million customers? I ask because there was a great deal of excitement in the crypto community when ETFs were approved earlier this year, leading to expectations of a bountiful year. However, with recent developments such as Bitcoin’s price decrease and net outflows from ETFs, I’m curious if you’ve noticed any shifts within your user base. Are there more new users joining? How engaged are they currently?

Ivan Soto-Wright: Absolutely, there was a notable 43% surge in our platform’s usage during the last quarter, marking Q1 as our most productive period in our five-year tenure. This achievement came despite the ongoing high-interest rates that many predicted would dampen crypto activity. Contrarily, we’ve observed a growing trend towards these digital assets. Our primary focus remains enhancing user experience, with the belief that an intuitive interface will draw users to these innovative products. Similar to how people embraced applications like Zoom and VoIP-based services, we anticipate a parallel shift in financial transactions towards crypto platforms. However, we acknowledge that this transition may take some time. Therefore, I prefer to assess trends over extended periods rather than focusing on short-term fluctuations. The trendline is steadily rising with an increasing number of developers joining the ecosystem and new applications being developed daily. It’s a long-term growth story.

As an analyst, I had the opportunity to engage in a conversation with tech journalist Kara Swisher. During our discussion, she shared her perspective on the current state of the technology sector in relation to the early days of the internet. She expressed her belief that while this sector will persist, it may not reach the grandiosity that some industry insiders like to claim. I’m curious to hear your thoughts on this matter. Do you agree with Kara Swisher’s assessment or do you have a different perspective?

As a tech analyst, I can tell you from my perspective that with every emerging technology comes an initial wave of excitement and hype. However, it’s important to remember that this is usually followed by a period of reality checking. In the case of cryptocurrencies, while there have been significant advancements, the user experience still lags behind what we are accustomed to in traditional fintech. This is an area where my team and I are focused on making a difference.

Jennifer Sanasie: Could you elaborate a bit further on the user experience aspect, as there’s a general consensus that improvement is necessary. We have some impressive web 2.0 applications boasting excellent user experiences. However, I’m curious about the hurdles and challenges developers encounter while striving to deliver an optimal user experience. Despite our understanding of what constitutes a good user experience, it seems we’re struggling to consistently achieve that standard.

Ivan Soto-Wright: Absolutely, from our perspective, it’s all about continuous improvement or what we call Kaizen at MoonPay. It’s the small 1% enhancements made daily that can lead to a significant 3000% improvement over a year. We pay close attention to our users and understand that growth takes time. Adapting the product, gathering feedback, and addressing customer concerns are essential. For instance, if a user experiences a high decline rate when making payments using their card, we might suggest alternative payment methods such as PayPal instead.

As a researcher studying the collaboration between our team and PayPal, I can share some insights into this relationship. When we first approached PayPal with the idea of integrating their payment solution into our platform, they were open to the discussion. However, it wasn’t an instant yes. Instead, it was a collaborative process where both parties explored each other’s needs and goals. We presented the benefits of our platform, while PayPal shared their concerns and requirements. Through open communication and mutual understanding, we managed to address all concerns and create a win-win situation for both parties. This partnership has been instrumental in enhancing user experience on our platform and expanding our reach to a larger audience.

Ivan Soto-Wright expressed his deep respect for PayPal, recognizing their trailblazing role in e-commerce since his early experiences using them on eBay. MoonPay aims to follow in PayPal’s footsteps by enabling interaction with the crypto world through their platform. They hope to enhance user experience and improve conversion rates, leading to a fruitful collaboration. PayPal has shown commitment to crypto by supporting more assets and investing in stablecoins, which hold significant potential for seamless cross-border transactions. Despite regulatory uncertainties, Ivan believes that stablecoins will play a crucial role in our financial future.

Jennifer Sanasie: Could you please clarify what you meant by “it took some time to get PayPal comfortable with the relationship” in your conversation with the CoinDesk reporter?

Ivan Soto- Wright: The integration process wasn’t quick, it required going through certain steps. As the CEO, I wish things could be completed instantly. However, achieving our goals takes time, and we ultimately manage to get there.

Jennifer Sanasie: Recently, MoonPay has gained recognition for its high-profile partnerships with mainstream brands and celebrities. Could you please update me on the current status of the MasterCard collaboration that was announced towards the end of last year?

As a data analyst, I’m particularly intrigued by MasterCard’s innovative approach to enhancing customer experiences at the Arnold Palmer Golf Invitational. Instead of just focusing on tangible assets with potential for monetary gain, they’re exploring ways to deliver priceless, utility-driven experiences. By scanning QR codes or interacting with NFC chips throughout the event, customers were rewarded with collectibles that offered unique benefits such as tickets for additional access the following day. This strategy underscores MasterCard’s commitment to creating value beyond financial transactions and demonstrates their dedication to understanding and meeting customer needs.

Ivan Soto-Wright: At present, we’re focusing intensely on this new PayPal feature. Our ultimate goal is to ensure its success and encourage a large number of our users to adopt it. This will be advantageous for us as well as for those users who prefer using bank payment methods, as they can now do so through PayPal.

Jennifer Sanasie: I’m curious to know, as someone involved in this industry, there’s bound to be a particular sector that captivates you the most, distinct from your daily tasks at MoonPay. Could you share which aspect of our industry has your undivided attention?

Ivan Soto- Wright: The potential uses for NFTs are still in their infancy. I’m optimistic about what NFTs could bring. We’re just starting to explore how we can develop content on the blockchain. In my opinion, applications like ticketing make a great deal of sense. The ticketing industry currently faces numerous issues that could potentially be addressed by implementing a reliable system based on blockchain technology. Furthermore, I believe that NFTs will revolutionize the gaming industry. Within games, many players collect digital assets which are limited to their specific environments. Similar to how your money is held by various intermediaries, your data and in-game property are also controlled by third parties. However, with NFTs, you’ll be able to own and control these assets yourself, providing more freedom and autonomy for users.

Jennifer Sanasie: We share similar passions in this field, making our collaboration promising. I appreciate your presence here today.

Ivan Soto-Wright: Appreciate that.

Ivan Soto-Wright: Awesome. Thanks, Jen.