8Pay is a payment protocol that brings fiat currency capabilities to cryptocurrencies. By enabling single, recurring, and on-demand payments, 8Pay aims to make cryptocurrencies suitable for everyday use. So, before we look into how 8Pay is going to change this space, let’s look at the current state of payment protocols and how 8Pay is looking to disrupt this space.
The importance of payment protocols
The original reason which spurred the creation of cryptocurrencies was to create a payment system where people can send money to each other without any intervention from a third-party, like a bank. However, cryptocurrency’s adoption as a payment system has been slow because of the complexity of its technology and the lack of education on the part of the users. As such, the factors that drive most of their value are:
- Speculative trading.
- “Hodlers” holding on to certain cryptos (especially Bitcoin) as a long-term store of value.
The main problem with this is that we are not using cryptocurrencies like the way it was meant to be used. The core definition of currency is that it enables the exchange of value between two or more parties. This is the reason, payment processors and protocols are extremely important in the crypto-space.
Pain points of the current Crypto payment space
The current digital payment space is booming when it comes to fiat currencies. Trillions of dollars are transacted annually. Amazon, Alibaba, and eBay account for a staggering 65% of all cross-border e-commerce. When it comes to cryptocurrencies, unfortunately, the picture is a little mixed.
The number of users using crypto debit cards and payment processors has steadily increased. Leading crypto-fiat services Revolut and Wirex claim to have over one million users a piece. What this tells us is that there is a large group of users who are more than willing to use different payment protocols. Unfortunately, the avenues where they can spend their assets is steadily decreasing.
As it turns out, that the number of merchants who accept direct cryptocurrency payments has decreased over the last two years. The reasons for this are manifold:
- Bitcoin’s lack of scalability and rising fees have discouraged the retailers.
- Bitcoin is mostly held on as a long-term investment and not used for everyday transaction.
- Cryptocurrencies are highly volatile.
- Users are not that educated on cryptocurrencies which may deter their use.
- The technology is relatively new and may discourage adoption.
Now, let’s take a closer look at the various payment processors out there which enable you to use your digital assets.
The current state of payment processors
Various attempts have been made for cryptocurrencies to be accepted in e-Commerce and retail stores. Let’s go through some of these attempts:
- Crypto payment processors: Payment processors, championed by firms like Bitpay and Coinbase Commerce, have helped immensely in the ease with which users can interact with crypto-friendly merchants and retail stores.
- Crypto Debit Cards: Crypto debit cards have been handy for users to spend their digital assets in an everyday environment. Since these cards function as Visa or MasterCard, they are ideal for subscription services and monthly payments.
Disadvantages of current protocols
- Firstly, payment processors are only ideal for one-off purchases and not for recurring payments such as subscriptions since it still relies on the user manually sending cryptocurrency from their wallet. While crypto debit cards help in recurring payments, they require a pre-loaded fiat payment.
- They are all centralized solutions which have full power over who gets to use their platform and who doesn’t. Payment processors such as BitPay have censored several high profile entrepreneurs and organizations. Also, since they are centralized, they are vulnerable to service downtime and hacks.
- Finally, all these solutions don’t really facilitate institutional crypto-adoption. These processors change your crypto into fiat and then send that over to the institutions. As such, the process is more akin to cashing out from a cryptocurrency exchange than it is to using cryptocurrency as a means of payment.
8Pay and Decentralized Payment Protocols
8Pay is a decentralized and open-source payment protocol which doesn’t retain customer details or user funds. The end users will remain in control of their funds at all times. Since 8Pay’s smart contract controls every aspect of the system, the users have no obligation to use its web and mobile wallets to access its functions. There are some more things to keep in mind:
- 8Pay is based on the Ethereum blockchain.
- It is required to pay a small amount of ETH up front to cover the gas fees.
- Users need not deposit ETH into the 8Pay smart contract to utilize it.
- Anyone can become a merchant and KYC is not needed to access the 8Pay protocol.
The following types of payments can be made via 8Pay:
- One-off payment: Used for making one-off purchases.
- Fixed price subscription: Recurring payment of a fixed amount like a regular subscription.
- Variable price subscription: Recurring payment of variable amounts.
- Whitelist: Enabling merchants to set a minimum billing amount that subscribers must consent to have withdrawn from their wallet.
Conclusion
8Pay empowers users and merchants to directly interact with each other via the utilization of smart contracts. The lack of a third-party will enable crypto-transactions without the dangers of centralization. For the future widespread adoption of cryptocurrencies, it is necessary for the cryptospace to have decentralized payment protocols.
I would avoid Bitpay, due to bad experiences in the past. However, Coinbase seems reliable, but neither of these 2 Payment provider are Decentralized for sure
Interesting project. I have been taking a long time break from steem, after I lost~5400 Steem. Now I am back, trying to keep up with the people I follow:) Any link from where I can download/test the wallet? Or find out more info about this? Thanks
If you're interested, I recommend joining the official Telegram group for the latest updates. Loads of development taking place and the team, is busy securing several partnership. The platform is not live yet, but will soon utilize Ethereum to create a real decentralized Payment Processor
Also had an issue with Bitpay once! Took 6 days to get back my funds and I missed out on a sale. Customer support sucks, therefore I prefer escrow services
That's the whole point of 8PAY, to really decentralize a Payment System & Processor
I know a couple of stores that would like to have subscriptions paid in Ethereum! Never thought of decentralizing a Payment Processing solution. Coinbase and BitPay are heavily regulated for sure, acting as third-parties who are willing to disclose information to the US government
I like the sound of this. Wanted to steer away from Bitpay, was not too impressed. Coinbase is fine. I imagine the fees would be lower on this platform.
From the looks, of it! 8PAY will have some of the lowest Fees, however its their Incentives model that will share and distribution transaction fees amongst token-holders via Staking
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Cool idea! I have been looking for something like this!
Should be excited! For once, it will be relatively easy to integrate a Payment System that is decentralize and accept a wide range of ERC20 Tokens