Financial technology is always evolving in Asia-Pacific Region.
Banks, local telcos, payment solutions providers alike are pushing to increase cashless payment acceptance and integration (e.g. credit cards, mobile wallets, and/or variations of online and offline).
However, a common roadblock faced by most payment systems is that they are often siloed and cannot interact across organizations (e.g. companies or brands) or jurisdictions (e.g. cross-border).
To break to silo? Payment providers across the region are looking to various types of solutions, including blockchain, a decentralized technology, as means to disperse functions and expand global market reach.
1[decentralized technology]: Cryptocurrency is a digital medium of exchange not controlled by any one group or agency and secured by cryptography. Block chains are politically decentralized (no one controls them) and architecturally decentralized (no infrastructural central point of failure) but they are logically centralized.
eIQ sits down with Vansa Chatikavanij, Managing Director of OmiseGO Pte. Ltd., an Omise subsidiary blockchain company, to learn more about the upcoming product, a recent $25 million ICO, and how companies can benefit from this new technology.
What is OmiseGO?
“To put it simply, OmiseGO is a decentralized payment and exchange network designed to disrupt the current payment landscape,” says Vansa.
“The idea is to enable users connected to the OmiseGO network to trade any value (e.g. currencies, store loyalty points, rewards, in-game points etc.) efficiently, securely and at low cost across the internet.”
To allow users to interact with the OmiseGO blockchain, the company will be making its first user interface application, the white-label wallet software development kit (SDK), available towards the end of 2017.
The SDK allows third party programmers to develop a wallet application for its own brand or integrated existing wallets onto the OmiseGO blockchain.
What functions could be possible for a wallet running on the OmiseGO platform?
The simplest application of the decentralized payments network would be transfer of funds between peers without the need of a bank account and/or incurring high third-party fees.
But peer-to-peer payments are only the beginning. The main use cases of OmiseGO appear to be:
2. Loyalty points
3. Mobile banking
4. Asset tracking
5. Digital gift cards
6. Tokenized fiat
Take for example two retailers each with a loyalty program. If both are operating on OmiseGO, their users could potentially cash in their rewards points interchangeable at either establishment; creating their own trading market.
Cross-platform transactions means grocery points could one day be exchanged for air miles.
One of the largest markets that OmiseGO will facilitate is cross-border remittance. The World Bank predicts remittances to low and middle income countries are expected to increase 0.8 percent to $442 billion.
“Through OmiseGO, senders and receivers will be able to safely transfer money locally and cross-border to their families, regardless of whichever wallet or payment platform they are on,” says Vansa.
“There is so much opportunity for companies to customize their target users and customers experience and reward online financial transactions,” says Jun Hasegawa, Omise Holdings Pte. Ltd. Group CEO.
“With addition of OmiseGO, we are taking concrete leaps towards realizing the Omise group’s mission of Online Payment for Everyone.”
“Through OmiseGO, senders and receivers can safely go cross-wallet and transfer money locally and cross-border to their families, regardless of whichever account or platform they are on,” says Vansa.
Use of ethereum blockchain makes exchanging digital currency easy and secure as each user has access to their own private keys, making it impossible to manipulate the data.
1[ethereum blockchain]: focuses on running the programming code of any decentralized application.
A $25 million boost for OmiseGO
The company recently made headlines after a successful ICO (initial coin offering) that raised $25 million by selling its OmiseGO network token – OMG tokens.
Similar to kickstarter crowdfunding, a piece of code is granted to contributors that gives them rights to earn fees by helping run the OmiseGO network.
The product sounds promising but having strong backing is useless without educating its users.
“The exciting challenge with OmiseGO is the newness of the technology. Majority of people have heard of blockchain but are either unsure how it can be used to their benefit,” says Vansa.
“Similar to when the internet first started, not many people could have imagined where it would be today.”
The long term goal for OmiseGO is to “Unbank the Banked”; become a new global tool to enable financial inclusion for both the banked and the unbanked.
Its success would be a milestone for financial technology in Southeast Asia but we will have to wait and see as OmiseGO network is slated to officially launch towards the end of 2018.