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

The reality for crypto today is the user experience is not where it needs to be. Um And so that's where we're very committed to our mission of making crypto more like your experience with your fintech. Then, you know, I think traditional crypto companies that you know, when I started, there wasn't even graphical user interfaces for some of these wallets like you had to use your terminal. It's gotten markedly better and I think the experiences will continue to improve Moon Pay. Users can now buy crypto via paypal. The new partnership means that users in the US can seamlessly purchase crypto with paypal through wallet transfers, bank transfers, and debit card transactions. Now, the Cryptocurrency buying app is the first company to do this with paypal, CEO and co-founder. Ivan Soto, Wright says that the partnership will help the company reach more customers. So how is this going to enable mainstream adoption? We explore that now, Ivan Soto, Wright, welcome to first mover. Awesome. Thanks for having me. Thanks for being here. Now, this partnership was announced this week. Uh Let's start at the basics. Lay a foundation for me. How's this gonna work? Yeah. So at Moon pay. We're trying to on board the world to crypt out. And so for us, we're constantly looking at new payment methods, new geographies we can expand into. And for us paypal was a natural fit. 426 million customers that are inside of paypal can now use their balances, their debit cards that are saved them a platform and frictionless use paypal inside of Moon pay to top up their favorite wallet. Ivan. Now I got to ask you, I got to play the devil's advocate here and I'm doing it because people ask me this all the time. Does the world want to be on boarded onto crypto? Talk to me about some of your user stories. Um And the future that you envision. Yeah. Well, I think the future of money is definitely Cryptocurrency. I think that eventually we're going to see a place very similar to what we've seen with the internet. So the internet really brought down the cost of communication. We are now using voice over in a protocol to communicate. The same thing will happen for money instead of, you know, all these legacy infrastructure systems that don't communicate the same language. We can now move to a system built on internet built by Blockchain where transaction costs, I think will eventually tend towards zero. We are in the early phases of that. It's kind of like the dial up days. We are constantly getting faster. We're getting speedier we're going to reduce those costs of transactions. But our, our job is really just to lower the barriers to enable people to participate. How many years do you think it's going to be until we hit that adoption until we go from uh dial up days to five G? I mean, it's already really impressive. Some of the innovation that you've seen on some of these Ethereum blockchains, uh these layer two solutions, we've already got into a place of optimism where transaction costs and gas fees are near zero. And we also have new layer one blockchains that are coming to the market. You know, we don't take a particular take on one Blockchain that's going to succeed. We have a view that there's going to be multiple blockchains and really it's around what are the use cases in the performance that we see as a result of the technology. So you're not going to give me any years, no predictions. No, I think it's just, it's followed a very similar trend to the internet. I mean, I would never have imagined that M pay now has 20 million customers on the platform. So I mean, it's only been five years since we started the business. So I still think we're early days in terms of the overall cycle, I look at market cap somewhat as a proxy. If we look at the Bitcoin market cap today, you know, gold at 12 trillion Bitcoin around a trillion we still have a long way to go in terms of adoption of the as a class. Let's talk about those 20 million customers. I know that there's a story on Coin desk.com. You spoke to us uh for the launch of this yesterday. Uh and you outlined some challenges that customers had, particularly when they were trying to get fiat onto the platform via things like bank cards. Tell me a little bit more about those issues. Yeah, unfortunately, you know, it really pains me as the co founder of the service. One of our biggest complaints that we receive is sometimes people try to use their card and they have that card rejected by their bank. Now, we can't really do much about that. Some banks will decide to decline transactions related to crypto. You know, I think what we see is we want to get to a place where we have the same user experience that we have in traditional fintech. So how do we get there? We partner with traditional fintech and paypal used by over 426 million people. It's a seamless way that people have used to pay. We are now forming a partnership with legacy. You know, some of the bigger fintech platforms to enable that same user experience inside this crypto ecosystem. Have you attempted to form partnerships with any of the banks or have conversations with the banks about this? I know it's not just a moon Pay problem. It's a problem for almost every platform that allows people to buy and trade crypto in the United States and Canada, where, where I but have you had any conversations with the banks? Yeah, I mean, we are in constant contact with pretty much everyone in this industry. We are always thinking on how do we provide a better experience? Some bank have update their policy, some bank haven't. So it just comes down to their appetite kind of similar to what you are seeing in the ETF world. There is obviously some uh players that have decided to not participate full stop. There's others that are really leaning into it like Blackrock. So I think a very similar thing has taken place with banks and their willingness to work inside this industry. I think, you know, for them, the challenge is, you know, there are some risks when it comes to Cryptocurrency, when you deliver Cryptocurrency over a Blockchain, it's final. So there is no way to reverse that transaction. And so you do have a potential increased risk for fraud. A lot of the work that we do at Moon pay is to really build the best fraud models to determine should we accept or reject this particular customer and try to derisk that as much as possible. So, you know, we try to do our part um because we do think this technology is the future. Um and we think that over time, the appetite will change. We think that more banks will recognize that this is an important industry to be part of and we need tooling. Like Moon Pay. You mentioned 20 million customers, talk to me about how active they are these days. And the reason I ask you that is because it felt like we were going to have an epic year in crypto uh in January when the ETF S were approved. And now it's feeling a little bit weird if we look at some of uh what's going on from a macro perspective, the price of Bitcoin is down, there are net outflows with the ETF S. Now talk to me about your user base. Are you seeing an influx of new users? How active are they? Yeah, we actually saw 43% increase in activity over the last quarter. So we had our best quarter in our five year history in Q one this year. And that's given the backdrop of very high interest rates. You know, most people thought that if interest rates were going to persist at these levels, crypto was not going to be a thing. Uh We've actually kind of seen the opposite. I think a lot of our work is still just trying to improve the user experience. We really believe that if we get the user experience, right? Uh people will start to opt into these products similar to how people start to opt in to zoom. And you know, all these amazing applications that are built on voice over the internet protocol. We think the same thing will take place for money and all these new crypto applications. But we're looking at a long period of time. So if you look at the general trend, you know, I try not to look at trends within a year or six months, I really look at zooming out, look at the long term, it's up into the right. There's more developers coming to the ecosystem, there's new applications that are being built, it just takes time for this ecosystem to flourish. You know, I spoke to a tech journalist, Kara Swisher recently and I asked her if she thought that we were in a similar phase to the beginning of the the internet. You know, she, she's been around, she's reported quite deeply on the beginning of the internet and she told me, no, she thinks that this sector is a sector that will be around but maybe not as grand as us who work in the industry. Like to say it is uh would you agree with that sentiment or what do you think? I think with any new technology, there's obviously a lot of hype that you go through a hype cycle where everyone is extremely excited about all the promise and then reality sets in and when it comes down to the reality, the reality for crypto today is the user experience is not where it needs to be. Um And so that's where we are committed to our mission of making crypto more like your experience with your fintech. Then, you know, I think traditional crypto companies that, you know, when I started, there wasn't even graphical user interfaces for some of these wallets, like you had to use your terminal, it's gotten markedly better and I think the experiences will continue to improve. Talk to me a little bit more about that user experience because um I think everyone agrees that the user experience needs to get better. And we have great web two apps with great user experiences. Where are the challenges? What are, what are the um issues facing developers when it comes to creating a good user experience? Because we know what a good user experience looks like. It just feels like we can't really get it right. Yeah. Well, I think from our side it's just constant. We have this, we have this word instead of Moon pay called KSN, which is continuous improvement. It's these 1% incremental improvements that you make every single day, you do that over a year and that's a 3000% improvement. So we're constantly learning from our users. The reality is it just takes time. You have to adapt that product, you have to get that feedback, you need to listen to your customers and obviously trying to solve some of the biggest pain points for them. Like it's not acceptable if you have a high decline rate because you're getting rejected by your bank. We do things like we prompt the customer based on the six digits of the card number. We could tell them, hey, you could try another payment method. Now, we can tell them to try paypal. Talk to me a little bit about the partnership with paypal. What was that journey like? Was paypal on board from the Get Go? Did it take a little bit of convincing? What, what was that? Uh uh I don't want to call it the the dating phase like, well, we've always had huge admiration for paypal. They are a phenomenal company. They have always been an innovator even since the early days. I remember using paypal on ebay. I would sell things in my garage online. That was the first time I received money. It was actually through my paypal account. I see us as kind of building the next frontier in the same way that you use paypal to interact with the world of Ecommerce. You can use Moon Pages, the world of crypto and all these new applications. And so I thought it was a natural partnership. I thought that if we could improve the conversion rates for our customers, it was a no brainer. And so we have been spending a lot of time with that team and we are really impressed. They have actually really leaned in to crypto. They have been proactive in trying to support more assets on their platform. They have invested heavily in their stable coin initiative, which I think has each promise. I think we're in the early days of Stablecoins. But you know, really now you can move frictionless money across many different geographies cross border. They just announced a partnership with Zoom. I definitely see, you know, the use case for Stablecoins being quite strong. We're in the early days, we're obviously still getting to regulatory clarity in the United States on how these things should be backed. But I think ultimately, they're going to be an important part of our financial system. I know you spoke to a coin desk reporter and said it took some time to get paypal comfortable with the relationship. What did you mean there? It just took time in terms of like any any major integration, you just have to go through a process, right? So it's obviously not as fast, you know, as CEO I want everything to happen yesterday. And so, you know, it just takes time to to get these things done, but eventually we get them done. Now, you are known at Moon Pay for the big mainstream partnerships, the big flashy celebrity partnerships. I know late last year, there was a Mastercard partnership announced any progress there. Yeah, Mastercard is one of our most exciting initiatives at mastercard. One of their motto is priceless. And so we built a priceless web three experience with them and we're at the very early phases of it. The first thing that we did was very recently at the Arnold Palmer Invitational was they have this experience inside the actual tournament where you could take your phone and tap these different NFC chips and gain you really cool collectibles. And you can actually put these collectibles in things like your hat. So you could a priceless memory instead of a hat. And if you went and collected all the collectibles inside the tournament, you got offered tickets in the very next day. So real utility, not really a speculation use case, but really, you know, actually giving a better experience to Mastercard customers. So I think that's, you know, again, just an example of how this technology can be used beyond just the money use case, how many people participated in it from beginning to end. And the reason I ask you is it's very hard to get people to be engaged. We're seeing that in DAO communities online and IRL people get bored, their attention spans are so fickle these days. Uh Did you see people engage from beginning to end or all the metrics that Mastercard wanted to hit at you? We wanted to, we had, we had take up of people actually getting those tickets and claiming them the very next day. They were super excited and it was just like a fun engagement point right at the end of the day. These experiences need to be fun. Any other big partnerships you can let us know about uh we'll have more very soon. But I think this paypal one is the one that we're super concentrated at the moment. We want to make this a roaring success. We want as many of our users to take it, take it, take it up and actually see success with being able to on board. It's great for us also um for people that have bank uh payment methods that they'd like to use, they can now use them through paypal. Now, I got to ask you everyone who works in this industry has one sector of it that they're very excited about one that they watch very closely. And it's not always the, the one that we focus on in our everyday job. Is there a sector in this industry that you're really excited about? Uh If you look beyond moon pay, what moon pay is doing? Um I still think we're, we're really early days around the use cases for NFTS. I'm still quite excited about the promise of NFT SI think we're still early days in terms of how we think about programming content on the Blockchain. And so I think things like tickets make a lot of sense to me. I think the ticketing industry today has a lot of inefficiencies. I think a lot of them could be solved by having a robust system that I I think will be built on Blockchain. I also think gaming assets, I think inside of games. You know, a lot of people collect these digital assets, but they're constrained to the environments. They're, you know, in the same way that your money in a lot of cases being held by all these third parties, your data, your property that you have inside of these games is held by their property, you know, their third parties you can now own and control them yourself. And I think that will be the future you and I are excited about the same things in this industry, so great minds, I mean, yeah, of course. Thank you very much for joining me today. Awesome. Thanks Jen.