DappCon 2023: Gnosis Pay - Decentralisation For Anyone, Anywhere

Transcript

hi everyone hope you all had a great lunch uh I'm ragav uh Elite product that nosis pay so let's just Dive Right into what nois spray is all about uh so what is the current state of web 3 well right now there exists two pal economies there's the real world economy and there's a web 3 economy the real world economy it's built over centuries using traditional finance and that's where almost all of the value lives but it's built on very inefficient and very archaic technologies that has not evolved as we have evolved with the blockchain Technologies at the same time we have built this whole pilot economy with the blockchain Technologies uh which is the web three economy however these two systems don't really talk to each other if we have to make them talk

to each other we need to go through centralized exchanges or other inefficient systems incur a lot of fees so most people just don't care about it and they don't uh bring their web three funds into the real world well is that how it should be uh I don't think so uh a user having two different identities two different portfolio of Assets in two different worlds that's not the future that we imagine at nosis pay so with nois pay what we want to do is merge these two worlds into one uh so that everyone can have one seamless portfolio between the two worlds they won't need to you know off ramp or they won't need to worry about whether their funds live on the blockchain or whether they live with the bank or something like

that uh let's just take a look at what you may need to do if you want to bring your blockchain funds into the real world right now you have funds on your self custodial wallet you'll need to sign a transaction to send that to let's say a centralized exchange then that centralized exchange will process it then you go there to that website swap it into Fiat and then do a bank transfer to your own bank and then you'll be able to use it with your card well with nosis pay we want to make this very seamless that there's a direct connection between your onchain funds and your real world spending that's how it should be why are we doing this so let's take a look at how payments has evolved over several decades uh what started with Diner's Club card in like the 1950s it has

evolved over time to the Bank of America card which is now known as visa to the chip and pin transactions to NFC to now that all of your cards basically live on your phone and everybody loves it everybody loves the convenience of just scanning your face with face ID and then paying wherever you want to however that's not how the backend works the backend technology enabling this whole convenience is very archaic it's based on a communication standard from 1970s called ISO 8583 and the last time it was revised like the standard that we still used today is from 1983 just imagine how complex it would be to make the technology of today something like Apple pay talk to these standards from

1970s it becomes very inefficient and it brings with it a lot of complexity which then again involves a lot of intermediaries let's take a look at intermediaries involved in this process so what is a regular system between you and the merchant the relationship is that the bank issues you a card you go to the merchant you buy your coffee and you get it it's supposed to be a three-party system and that's how it was imagined in 1970s but over time because of all of these inefficiencies it has evolved into a 9 plus party system I mean there's so many intermediaries that it's hard to even keep a track of it anymore and what eventually happens is the merchant is the one that pays the price for it this has happened in a lot of Industries around the world and let's

take a look at how other Industries have dealt with it the first one being Telecom so uh you know decades ago like I would say like 15 years ago in Telecom uh everybody used to call and the transfer of Telecom information used to happen on landlines uh then Skype came in with the Voiceover IP technology but it did not get a lot of adoption right away uh it got adoption when they introduced Skype in and Skype out the reason being that people don't really want to change their habits people people are happy with calling like they were before and what Skype in and Skype out enabled was that you can dial in to a Skype call and that's what drove up the adoption and now all of the all of the calls that you do that basically happen over voice over IP but nobody really cares uh the user they don't they

don't care whether their call is happening over IP or whether it's happening over landline or whatever is the backend technology their payment uh their techn Telecom habits are still the same from before but the back end has completely changed we wish to do the same with p pents right now these two systems like we said like the new technology of blockchain it does not really exist in the traditional Finance infrastructure and we with nois pay want to connect these two so that in the future you don't need to worry about how your payment is being processed you continue with the same payment habits however the back end has completely changed and become much more efficient so we solved both of these problems uh with nois pay let us dive into how payments work with an example so the

user goes to a coffee shop and Taps the card to buy a 5 coffee what actually happens is the card basically sends a request to the payment terminal the little machine that you tap your card to that sends a request to the acquired Bank acquired bank is the bank to which the merchant is start to which sends a request to the scheme Vis is Visa and MasterCard and which sends a request to the issuer which is uh could be a bank could be a Neo bank or somebody who's issuing you the card and is customing those funds safeguarding those funds on your behalf and that bank then sees whether those whether there's a balance to enable you to buy that coffee and if it does it places the block on that this all happens on a simple uh system of

custody of assets if there was no custody of assets the bank was wouldn't be able to do this and this is not what we imagine the future to be this is based on a trust scenario this is based on a custody system and we want the future to be self custodial and a trustless so in this process the user uh gets the cost coffee it sends back an approved message and the user walks away but that's not uh how the merchant sees it the merchant doesn't get the money right away many people don't know but the merchants get their money 2 to 7 days later and they don't even get the complete money they get after deduction of several fees introduced by all of these intermediaries based on a lot of inefficiencies like I talked before and they get their money like after 3 to 5%

of deduction that price ultimately gets baked into the price of whatever the user purchases and this basically means the whole economy is inefficient by 3 to 5% how nois pay works well we follow a similar concept but the key difference is that the funds are not safeguarded by us the funds are not custody by us yes the request flows in a similar way that it goes from the terminal to the acquirer to the scheme and then to the uh issuer where we act as the issuer however we don't custody the funds the funds live on a safe on the blockchain we see whether those funds are there and through a spending module which is enabled by the user on the safe we take those funds to the selement safe this spending module cannot be changed

arbitrarily by us it can only be configured by the user so it doesn't violate the trust assumptions and the self- custody assumptions of a safe smart account and that's the authorization and during clearing and settlement uh These funds basically get converted into euros and get sent to the merchant through Visa so to enable all of this we have built extensive infrastructure over the last year which is what we the DPN the decentralized payment Network and it involves not just the layer two which we are building with the help of polygon zkm technology but also other systems you know which help connect the blockchain technology with the traditional payment Railways so to being able to connect with sepa Visa Mastercard and all of this with blockchain we have built several

Services which make sure that the funds reach the Final Destination which is of course the merchant from the user let's take a look at what do we have now so I kind of like to use the analogy of the Google pixel here just like Android is uh an open system that is offered to you know phone manufacturers that they can use Android operating system to build their phones but still Google has the Google pixel at what Android could be and to explore the possibilities of it just like that we have nosis card so to explore the possibilities of nosis pay and to bring into the world uh an imagine uh like a manifestation of what nosis pay enables we have nosis card which is available to pre-order now uh at a cost of 30.23 and of course it comes with no fees on uh

any spend it's available all across Europe and you are able to spend your crypto at any of the 80 million Merchants already enabled by Visa across the world uh let's take a look at how the nosis card works so you can go to nosis pay.com and order a card what happens is you first need to connect your wallet uh this wallet will be the owner of the safe that we deploy in the process then you go through kyc during kyc uh it'll be just like a regular card kyc that you upload your proof of uh address you upload uh your ID and you take a selfie uh once that is done we deploy the safe smart accounts for you your eoa becomes the one of one owner of that safe and

then we also with our partners at monium give you an iban all of this is linked to the safe smart account the card is then produced and mailed directly to you to your uh address provided and then you have two ways that you can fund this safe one is your regular way that you can send funds on the blockchain uh from any evm compatible change any token to our supported stable coins which includes EUR e right now uh and the other way is that the iban that we give you you can just send Euros to that iban and what happens in the background is Euro e gets minted and gets deposited in the safe smart account uh we'll do onchain transac onchain transaction monitoring of these funds to make sure that they don't come from any listed

sources they don't come from any hack or any exploits and once we have determined that all of these funds are clean which happens instantly uh you can start spending it just like you already do uh at any Visa Merchant and you can continue to manage the card you can see your transactions and everything like a regular card there's nothing different about it and every nosis pay account like I explained gets an iband which enables you to on-ramp easily uh with step up transactions in seconds so how this works is just like I explained you just send funds to the iban and it immediately appears in your safe smart account so what this enables is again one identity one portfolio of assets and like the synonymity between crypto and

Fiat a user shouldn't care whether These funds are in Stables on blockchain or you know in Euros with an XML file on a database of a bank uh they can have funds in any way with their nosis payable Ian combination and they can do that to do anything that they wish to do with money which is they can spend with it through the card they can do Bank transfers with it they can purchase uh investment opportunities like they can purchase crypto assets they can purchase traditional uh investment products and since at its score it's a safe smart account you can connect to daps and explore the wide of Technologies available on defi uh so yeah we are building for everyone to bring the next billion users into crypto no we're building for everyone to unlock the users that

already are on crypto and bring those billions of blockchain funds into the real world what does this mean well what this means is that we're building for everyone and all the web3 companies and wallets out there any web3 company any wallet they want to enable payments as a mechanism for the users to interact they can come to us use our technology and we will operate as a B2B Network to operate in the background and support them in everything they don't need to worry about anything else other than just providing a great user experience to their users they will be the one that own the users and we'll be the technology enablers what this means is that we are the ones connecting to traditional finance payment Railways we are the ones making sure that the clearing and settlement Works taking care of card manufacturing Logistics uh

the whole technology behind this the L2 and we will provide seamless API Integrations for wallets to integrate with this whole DPN and they need to just enable through the UI through the front end uh for the users to be able to use this card uh where is it available well we're available all across Europe right now and we're working hard to expand to North America by the end of the year uh and a plan is to expand into Latin America and Asia in the next year well no Sy cannot be made possible without the extensive support of our partners so a big thank you to all of them uh a few of them you all you will all all also find a dcon uh so that's great and yeah like I explained before you can pre-order your card right now uh

through this QR code you can go to nosis pay.com and pay for it and uh it'll be shipping later this year uh thank you okay guys so let's open it just before we get into questions we're looking for front end back end full stack devs as well so uh just come meet us at the booth or reach out to any of us from the nosis pay team now let's open it up for questions come here yeah questions yeah let's go it's coming it's coming uh thanks uh very nice

presentation um I think there are something that I want to uh mention that is not accurate uh for example you mention that the transaction cost is actually 5% and that's uh it's not completely accurate because for example the debit card transaction is a can be as low as 5 cents and the credit card normally cost two or 3% if it's crossb um and the the problem is uh so card scheme let's say they charge around 1% so now if you make a g pay connect to

for example Visa they will still charge you 1% if it's a uh that is something maybe we should get rid of and uh there are some fundamental problems so now GES cost no transaction uh there low transaction cost but if you look at ethereum that can be as much as €1 so if you buy5 coffee and then cost € 10 that will be a problem uh so one fundamental problem is that you need to make sure that the glosses uh blockchain is always as cheap as possible uh yeah so actually that's something I want to think about and

another fundamental problem is uh if you put your wallet on change everyone will be able to see this wallet by what so uh how do you solve this problem because I for example there are something I don't want to ask the other people to know uh let other people to know what I buy correct yeah so that's actually so multiple questions there so I'll just answer each one of them one by one so the first one is about how much fees does it actually incur in a regular debit card or credit card transactions that varies around the world I mean in Europe you have law around it which caps the fees that uh issuers can charge uh so it can be as less as 1% in Europe to as high as 5% for an international

credit transaction in in us uh yes right now we are connecting to Visa so those fees are still incurred by the merchant but like I explained like what we're trying to do is connect these two worlds right now so that in the future all of this processing all of these intermediaries do their processing on the blockchain so you canect connect directly to the merchant so it's a step-by-step process that we'll get to uh the second question was around uh the fees on the blockchain so we are building our own layer too using polygon Z KVM and we are trying to make it gasless so that we don't face the same issue that uh ethereum right now faces with high fees on transactions so that'll be a terrible user experience that you go to buy a coffee of 5 and you uh what gets deducted is 10 years and

then the third question about the Privacy like when you spend uh all of your transactions are visible on chain so that's in our road map that we will bundle transactions up together and then we'll process them so uh we can bundle them bundle them up uh like daily we can bu them up like early or something and that can be configured by the user in the future as well that's something that we're building towards okay thanks thank you for the talk uh two quick questions first could you elaborate on the safe that would be deposited if I order car so what is the Quorum who are the cosigners and second um regarding um the issue of the Euro stable coin uh what is uh its basically abilities to potentially block me on

sensor my transactions in the like stable coin part of the scheme mhm uh so the first thing the safe uh when you create the card it'll be a oneof one safe uh once you start activating the card we'll enable a spending module on it you will determine what the spending module should be and that resets uh based on the frequency that you said uh so let's say it's like a €2 200 spending module so every day we are allowed to draw up to €200 we will be uh one of the signers on the safe uh but we cannot spend more than the ones that you allow and we cannot change uh how much you allow so the spending module can only be configured by you uh the second thing about the issuer of Eur e so that's monium I think they're talking right after me as well so they'll be able to

expand more on that but essentially like whatever you inter uh like transact with uree on chain uh nothing can stop you from that but when it comes and touches Fiat that's when you know uh like kyc and kyt comes in I think there's a question that first second okay I share the privacy concerns of the previous um uh person um businesses small businesses have uh that's privacy is less of a concern for small businesses is are you able to onboard like Freelancers digital Nomads who um who have and this audience has

actually a big overlap with the crypto Community right now so this may be um a really good market for you but are you able to onboard them small businesses yes of course any user that uh can be onboarded and in the future we'll also be issuing corporate cards so businesses can give cards to their uh employees so the second question uh thank you for the talk um the first one is a a kind of a request please enable existing saves to be the savings account uh the other one is uh the spending module what you're using uh is it automated or has it to be triggered manually by the

user um and uh the third one I forgot so just my question that's okay so the first thing like enabling existing safe so since this safe is a bit unique uh you know it has a spending module and uh it's on nosis chain right now and the L2 in the future so uh right now we're not supporting existing saves to be the safe that we uh the savings account but in the future of course we'll we'll do that and uh the second thing the spending module spending module is enabled by the user once the car is activated and they can change it anytime but they won't need to initiate it every day hope that answers your question no was just just just to clarify so I was not clear if you have

to move money to the spending account uh uh and and and how it's it's done yeah that's the question Yeah so basically the spending account like the save on the L2 you will need to move funds there so only the cards that are on the L2 will be the ones able to be spent with card okay there's a question here and there there after hi um my question is about the networks so you're running on nosis chain and you're moving to zkm mhm what what's uh what's the factors driving that like what's missing is it all about scalability or cost or what uh so multiple things uh the basis right

now is L1 which is nosis chain and the L2 will be based on polygon Z KVM the first reason for that is uh how quickly you respond to the schemes so let's say we get a payment request we are supposed to respond within 2 to 3 seconds to the scheme that yes these funds are there and process it on the blockchain as well but nois chain has uh a block time of about 5 Seconds right now uh so that's one of the first reasons the second reason is scalability uh so you know as uh users increase on nosis chain uh they'll be like the fees will increase right now the fees are very low on nosis chain but there there is a fee Market there so the second reason of course is enabling that there there is no fees on the L2 and make it much more

scalable thanks question question uh yeah right there yeah I don't know if you mentioned this when you were talking um but regarding privacy like already when we do transactions with the VISA car we have like a historical of what we doing and what we do and we can like corporations and companies can try like they contract what we do and what we spend money like and B on top of that we're going to have already this transactions recorded in chain which are public available while the your record your bank account records you cannot no one can access to it unless like an authority ask for it like but now we going to have transactions also in the chain like what is the incentive for me

to use this and have my transactions public available for everyone in in the chain and I know like I can be Trace by whoever about actor or like I don't know like what why would I want to use this also to have a transactions in the chain besides the yes I can spend my crypto easily but everyone can see my transactions like why would I want use this so like what exactly is the question there like why would I why would I want why do I want my transactions my bank account transactions on chain also uh they'll be bundle up so you know you won't be a user or somebody else won't be just able to see how much you're spending in each transaction and yes it's true that companies involved in the payment process like all of the

intermediaries that I talk about the payments go through them so they do have that historical data but a regular user just can't you know tap into that database and see those transactions and that is something that we hope that in the future uh with this also with the bundling of transactions nobody will be able to you know draw some intelligence from that thank you yeah look at this yeah yeah yeah go for it uh you mentioned that you were able to instantly validate the source of the funds and I'm wondering about topping up cards on chain rather than depositing through the account side if you were to acquire your funds through something like cow swap I mean how do you validate

uh where they're coming from or will you be like labeling pools as poisoned or or yeah so that's right uh like Onin transaction monitoring comes into place so any transaction that gets deposited in the safe that is linked to the card uh we screen uh up to 20,000 steps before that uh whether it's linked to any illicit fund so let's say it comes from a hack or somebody who is sanctioned or anything like that that doesn't violate uh the risk assumptions of a licensed Partners uh we check for all of that so it is possible onchain to track all of that uh you can do that through several tools okay cool we have two questions there and

there thank you the name of the talk is decentralization for anyone anywhere however the very last words of the presentation says that it's just available for some people in some places so what part of gnosis pay is actually available to anyone anywhere so it is available all across Europe for anyone there's nothing restricting a specific person to not order the card unless they don't get through kyc which is like they submit a fraudulent document or something like that so yeah it is still available for anyone and about the anywhere we are available in Europe right now and we're actively building towards being able to support users all across the world also you're talking about the network right the network is

global yeah where is the mic uh microphone yeah here and then we have another question oh yeah go for thank you very much um just a little comment on the question we just had uh we are a company that don't have a bank account and having a card to use our safe now is really handy right so actually you can have a company and not have a re not have a regular or School bank account it is kind of a bank account I know because you have an iban but yeah it's not we don't go to a bank and open account my question is where is your cut and like where where do you make money and uh also um are you what can

you do like you are just a guest in the Visa system so how dangerous is for is it for you to get thrown out if you do certain things like you get too dangerous to the other participants the other intermediaries what what are are your risks yeah so uh I would say like nois pay in its like in its Journey has been more of an operational and admin issue than technological issue because dealing with all of these uh you know regular web to traditional companies is the bigger hurdle that convincing Visa convincing other licensed partners that this is okay that you you know this is okay to bring blockchain funds into the Fiat world and we have been able to convince them and that's how we enable this so that risk is what we have been

drisking for the better off of the last two years and about where our cut so basically we are the issuer uh so we get the interchange that we allowed to uh cut from the fees and since you're a B2B Network and wallets will be the one that we give our technology too they'll be the one essentially issuing with their own branded cards we SP that interchange onto them yeah where is the mic uh we have a question there and then we have two questions here hi hi thank you for the talk so first of all I wanted to ask every bank account that is open is not a sub account is your own sort of individual account I suppose it's so since you're getting an iban uh second the uh the the taxes unfortunately

they're like in Germany whatever Finance is only interested in your income they're not interested in your expenses so I would see I would think that if a financial institution only sees the offchain uh version that gets transferred to you so every every single coffee you buy is a separate sort of income or at least what hits your bank account that would make a nightmare out of uh you know trying to to deal with it with your uh accountant so uh what are the real advantages for me instead of I I don't know it depends from where you get your crypto of course but if you replenish your Euro account in bulk then you just have one transaction if you

have have uh thousands of smaller like coffee transactions hitting your bank account then it's a thousand transactions um so I don't know if you're thinking about that and a small technical question is will they support Apple pay but it's nothing comparing to the first question thank you okay so first the easy question which is Apple pay yes it will support Apple pay so you'll be able to add your nois card to Apple pay and of course Google pay as well uh about the tax implications I'll be honest like I don't have the right answer to it so it'll be wrong of me to give you an answer here so let's just discuss this at the booth and uh uh we'll add it to the FAQ on the website as well uh I'm not the right person to answer that question uh yeah cool okay

guys we are up for time right now um if you want any further qu ask any further question you can come to the booth um so thanks RAB thank you