The crypto payment solutions provider that introduced blockchain-based subscription billing to credit card-harried merchants is moving to the Binance Smart Chain.
PumaPay pioneered cryptocurrency-funded payments with its PullPayment Protocol, a series of smart contracts that opens up the use of flexible billing tools like recurring subscriptions and automated account balance top-ups that actively “pull” payments from clients. By doing away with the need to ask customers to actively “push” out crypto payment every month, it gives online merchants an alternative to the high fees and restrictive rules of fiat credit card companies that were previously the only source of “set it and forget it” payments.
The transition away from the clogged and costly Ethereum network will make transactions 100x faster and 50x less expensive than they are now, but that is just one part of PumaPay v3 that goes fully live in the third quarter of 2021. The third-generation protocol adds liquidity pools and automated swaps, taking the company fully into the world of decentralized finance, according to PumaPay CEO Yoav Dror.
“PumaPay v3 represents a new era for DeFi payments. V3 is going to be a real, blockchain payment solution that is a strong, competitive alternative to Visa and Mastercard. Above all, PumaPay v3 will be a profound demonstration of the value of complete decentralization. As a truly peer-to-peer solution, we will finally do what blockchain-based payment solutions are supposed to do: Remove the middleman and democratize payments,” he said.
Crypto vs credit card risk
Aimed first and foremost at high-risk merchants, the PumaPay PullPayment Protocol offers a Visa and Mastercard-free solution to clients like online entertainment companies that have a big problem with chargebacks — essentially clients signing up for the service with a monthly fee, using it, and then cancelling by telling their bank that they did not authorize the transaction. It happens concurrently that the “high-risk” in “high-risk merchants” actually refers to chargebacks.
Immutable blockchain payments prevent that — a game-changer for merchants with the choice of relying on credit cards. Nor do they have to ask customers to actively push out crypto payments each month, thanks to the PullPayment Protocol, which allows both merchants and customers to adopt a “set it and forget it” mentality .
Of course, PumaPay is not focused just on high-risk merchants. But,in resolving their difficult problems, the company is using them as the tip of a spear that will help crypto payment solutions break into the wider online and offline commerce world, where merchants all have to deal with high credit card fees and unfavorable policies.
PumaPay v3 will also provide its network of merchants with the flexibility to accept many BSC-supported tokens — also including stablecoins — other than its own ERC-20-based PMA token. Neither party will know which token the other is using, and neither will even need to know PMA is involved in the transaction at all. This will make it easier for clients who can use more commonly available coins. It will also relieve merchants uncomfortable with accepting payment in a potentially volatile cryptocurrency.
To make this possible, PumaPay created liquidity pools pairing PMA with the other cryptocurrencies PumaPay plans to support on popular decentralized exchanges. With its existing network of merchants providing plenty of transactions, PumaPay expects that a lot of swaps will take place.
The first liquidity pool is a PMA-BNB pair on the PancakeSwap DEX, aiming for a minimum of $2 million in liquidity by July 1. To facilitate that, PumaPay is offering a 750 million PMA token reward program, with early contributors earning reward multipliers. Bitcoin (BTC) and Tether stablecoin (USDT) are up next, with a target of support by Q3.
The new pools keep the PMA tokens at the center of all transactions. In addition, a new bridge connecting Ethereum to the Binance Smart Chain facilitates the transfer of the original Ethereum ERC-20 PMA tokens and the new BSC ERC-677 PMA tokens. The goal is to ensure that the total amount of PMA tokens on both networks remains constant and equal to the final supply — protecting the positions of the original Ethereum token-holders, as those are already listed on several major exchanges.
PumaPay v3 will also introduce compatibility with MetaMask and Binance wallets, and plans to replace its back end with a distributed network of executors by the end of the year. They will post transactions to the blockchain on behalf of merchants, who will pay a small fee. PumaPay will still not collect per-transaction fees, and merchants can become executors.
Beyond this, a governance token is under consideration. PumaPay’s ultimate goal, after all, is to democratize payments with a permissionless, blockchain-based payments protocol that is completely decentralized.