Pay It Forward

By Nayantara Bhat | Tucked away at a small stall in a section of Hong Kong’s massive RISE conference in July, Pundi X looks like just another startup in the crowd. But Pundi X has been making waves in the startup ecosystem: the hope is that people without bank accounts will soon use Pundi X’s technology to make day-to-day purchases using cryptocurrencies.

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Pundi X aims to accelerate the transition to cashless payments in places like Indonesia, where vast chunks of the population remain unbanked. It also has global ambitions. This summer, the startup began shipping out the first of the 5,000 pre-ordered XPOS point-of-sale devices to customers around the world.

Over the next three years, Pundi X plans to roll out 100,000 XPOS systems, along with its complementary XPASS card that works like a debit card – customers pay for goods using the cryptocurrency they load onto it.

Pundi X had an ICO in September 2017, and the token sale – which had targeted raising US$35 million – logged over 6,000 Ethereum transactions and sold out in barely two hours.

The ICO’s success can be attributed in part to its superb timing. Crypto fever was at a high in September 2017, with the price of Bitcoin in the early stages of its historic ascent to US$20,000 in December. Since then, Bitcoin and other currencies have experienced intense volatility, which Pundi X Founder Zac Cheah is glad to have missed out on.

“We were super lucky,” Cheah says. “Even today, the landscape has changed such that the projects people proposed last year are not as exciting or capable of attracting investment this year.”

The ICO has given Pundi X a definite boost. Industry players and crypto enthusiasts now have their eyes on Pundi X as a frontrunner in the Southeast Asian cryptocurrency space. “Back then, people didn’t recognize us, but nowadays people recognize XPOS devices which makes us really happy,” Cheah says.

Pundi X experienced some issues with adoption, since cryptocurrency is still a wild card for most merchants, but that seems to be changing.

“We find people who want to use crypto and want to use blockchain in their coffee shops, in their car retail, anywhere, coming to us,” he says. “People actually reach out to us to acquire our XPOS and XPASS.”

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One such restaurant is Locofama, in Hong Kong’s Central district. Pundi X approached Locofama for trialing the XPOS device during RISE, and Founder Larry Tang says it was a very quick conversation.

“We always think about the future of food, the future of capitalism, and having something like this – I see it as a huge milestone, a new chapter,” says Tang, who hopes that Locofama will be the first HK restaurant to usher in a transition to cryptocurrency payments.

However, Pundi X still faces a roadblock in the form of looming regulatory barriers. Late last year, the Indonesian central bank banned the use of cryptocurrencies as a medium of payment. However, Cheah is confident that Indonesia will relax its views on cryptocurrencies, and was quoted in June as saying that Pundi X would be pushing forward with deployment regardless of the ban.

“What the bank has said is actually to make sure that bitcoin or other crypto assets don’t replace the [Indonesian rupiah] as a form of payment,” he says. “So in that sense, it’s not a ban, per se.”

Parallel to the expansion plan, Pundi X is also keeping an eye out for investment opportunities. Having enjoyed the benefits of a sold-out ICO and XPOS pre-orders, Cheah says that the company is looking at how it can support other blockchain companies and eventually become an industry leader comparable to Google or Intel.

“I think we want to be part of the ecosystem in the sense that when blockchain growth stabilizes, we want to be at the table when the dust settles,” he says.

Cheah’s advice to startups looking to raise via ICO is modeled on what Pundi X is trying to do – create value from the tokens and from the business. According to Cheah, a crucial step in deciding whether to hold an ICO is how the token or coin could be tied to the core business. This is something that’s often ignored when setting up an ICO – it’s a much more straightforward way of raising capital as compared with the traditional venture capital route, which can lead to overconfidence.

“Investors today are smarter than investors last year and they really want to look at real utility use cases of the token,” Cheah says.

Pundi X’s ultimate mission is to make crypto mainstream. “How do we make it accessible to the average consumer, someone who isn’t tech savvy?” Cheah says. “We bring it into the retail environment and – above all – make it simple.” pundix.com

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About The Author Nayantara is a Reporter for Jumpstart in Hong Kong who is passionate about innovation, social enterprise, and alternative finance. She’s a hobbyist photographer and is currently on the lookout for the best burger in Hong Kong. nayantara@jumpstartmag.com

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