How Flexa Will Increase the Adoption of Crypto Payments Among Merchants
Skeptics always seem to ask one question – where can you spend Bitcoin? As much as it is a nuisance, it is a strong pointer that the rate of cryptocurrency adoption is still low. After all, if cryptos were hugely popular, you would find many merchants that accept Bitcoin and other cryptos as a form of payment.
This is the challenge that Flexa, a company based in New York, is trying to solve. So far, the company has raised $14.1 million which will be used to close the gap between merchants and crypto holders. The volatility of crypto markets is the main reason behind the reluctance of merchants to accept cryptocurrency payments.
Similar to Apple Pay, Flexa allows users to buy goods by simply scanning an embedded QR code. Tyler Spalding, the CEO of Flexa, revealed that their solution doesn’t require sellers to upgrade their software and hardware to function. The system works by creating a backward compatibility code that tells the PoS terminal to accept the payment, which is later reconciled through the ACH network.
Although prominent institutional investors such as Intercontinental Exchange and Goldman Sachs have delved into the crypto market, merchants still have reservations. A recent study conducted by JPMorgan investment bank established that there has been an insignificant improvement in the number of outlets accepting crypto payments since the start of last year. Most of the companies that were already accepting crypto payments continue to do so, though a few have discontinued this option.
The main reason for ditching this form of payment is the complexity of transactions and the volatility of currencies – companies are unsure if the amount of fiat they receive in exchange for Bitcoin payments will match the value of the sold item at the time of conversion.
Flexa intends to solve the volatility issue by converting crypto payments into fiat in real-time. In this regard, Spalding revealed that they are working with several exchanges to ensure that the crypto payments are debited and the fiat is credited instantly after the purchase is confirmed.
The Flexa project received funding from leading venture capital firms, including Pantera Capital, 1Kx, Nima Capital, and Access Ventures. The funding will be used in the company’s public inauguration which is scheduled for May.
In the future, Flexa plans to become a hub that interconnects crypto projects, merchants and customers. This will be made possible by the development of an SDK that allows users to integrate Flexa into their existing services.