The first cryptocurrency emerged with the idea of becoming the best replacement for fiat, returning power and freedom to people, and becoming a universal means of both local and international payments. More than ten years have passed since the launch of Bitcoin, but we are still not close to being able to use crypto to buy whatever service or good. However, many companies are working in this direction, and every year the list of crypto-friendly merchants is only growing. Nevertheless, cryptocurrency still has some obstacles on the way to mass adoption as a payment option.
Fortunately, the project discussed in today’s article can completely change the approach to crypto payments and benefit all participants in the process. Therefore, we invite you to take a deep dive into the Flexa project.
What Is Flexa?
Flexa is a project whose goal is to stimulate the widespread adoption of cryptocurrencies as a means of payment. The company offers a winning solution for both merchants and consumers. Merchants can set up the acceptance of crypto payments in their brick-and-mortar or online store in a matter of minutes. The Flexa protocol is fully compatible with the most popular point-of-sale systems. Thus, merchants do not need expensive equipment to accept crypto payments. Likewise, consumers can easily and instantly pay in about 100 different currencies. Flexa includes three main components:
- Flexa Network Protocol;
- Amp Token;
- The Spedn App and other integrated apps.
To date, more than 40,000 merchants in the United States and Canada accept crypto payments using Flexa.
Problems of the Current Payment Industry
First of all, it is necessary to understand how the payment system works today and what disadvantages it has. Surely you know that before the payment passes from the consumer to the merchant, it passes through many intermediaries who charge service services. The problem is that banks and other financial institutions charge high fees for each transaction, which can reach 3% and even 7% in the case of international transfers. In addition, traditional payment methods open up vast opportunities for fraudulent activities, including chargebacks and data theft. All this dramatically harms the development of businesses, especially small ones. Cryptocurrency would seem to be able to rescue the situation since crypto transactions exclude most intermediaries and are also irreversible in nature. But the cryptocurrency also has some disadvantages, due to which it is not so actively used as a payment method. Flexa developers have set a goal to eliminate these shortcomings:
Long transactions. In the modern world, we value our time very much, so it is unacceptable to wait for payment confirmation too long. The payment must take place instantly so that the cryptocurrency can replace fiat. Unfortunately, transactions on the Bitcoin network often take from 20 minutes to get at least two confirmations on the blockchain. Of course, it is possible to accept zero-confirmation transactions, but this can lead to a loss of funds.
Fees. Few consumers are willing to use cryptocurrency as a means of payment since, in this case, the transaction fee is paid by the sender. Thus, during particularly busy hours, the fee for transactions in the Bitcoin, Ethereum, and other popular crypto networks can reach several dollars. Naturally, not every customer will want to overpay such amounts.
Lack of adoption. As already mentioned, although more and more companies are starting to accept crypto payments, their list is still tiny. Naturally, for the cryptocurrency to receive mass adoption, it must be accepted universally as fiat. However, most merchants are either afraid to accept crypto for payment or face inconveniences associated with accepting crypto payments.
How Does Flexa Solve Problems?
Today, there are two main ways of accepting crypto payments with the help of crypto payment gateways or via crypto cards. Both methods have their drawbacks. For example, merchants who accept crypto via a payment gateway are faced with the fact that in addition to the fee they pay for the provider’s service, they also have to convert their cryptocurrency into fiat. Naturally, most crypto gateways provide a crypto-to-fiat conversion function, but the fee for such an operation reaches several percent. In the case of crypto cards, the disadvantage is that they are prepaid. That is, buyers first need to convert crypto into fiat and only then make the payment.
Flexa developers choose a different path. They allow consumers to pay for purchases with cryptocurrency, while merchants receive an automatically converted fiat amount directly to their bank account.
How Does It Look for the Consumer?
To use Flexa services, the consumer needs to download one of the applications — Spedn App or Gemini Pay. Spedn is the official Flexa app that can be installed on a mobile device. Spedn is a kind of cryptocurrency wallet. It is built on an open Flexa Network.
Spedn allows users to process barcodes at the POS of those merchants who use Flexa. Users can deposit BTC and other cryptocurrencies into the Spedn wallet and use it to pay in a physical store. Spedn is used exclusively for spending cryptocurrencies. That is, it is a hot wallet. Therefore, it is better to store as much money in it as you would put in your physical wallet. Please note that it will not be possible to withdraw cryptocurrency from the Spedn. Nevertheless, the developers declare that they are actively working in this direction.
Another exciting component of Spedn is Flexa’s partnership with Gemini. The wallet supports USD Gemini. This exchange is licensed by NYDFS, so all deposits in Spedn wallets are insured and stored in Gemini infrastructure.
Transactions are carried out instantly thanks to the native Amp token, which serves as decentralized collateral.
How Does It Look for a Merchant?
Merchants choose one of the integration methods to be able to accept crypto payments with the Flexa Network. Since Flexa excludes most intermediaries, merchants save significantly on fees while benefiting from lightning-fast and chargeback-free transactions. According to the team, the company has established new connections with tens of thousands of terminals across the United States, making it possible to directly connect merchants and customers. The payment received from the client is immediately converted into fiat. The merchants have the right to choose which currency they want to receive, but most often, it is USD. The merchant does not engage in the deposit and withdrawal of funds, as this is automatically done on the network servers. The Amp token is used to balance the fiat currency and cryptocurrency.
Amp tokens play a crucial role in the Flexa project. Amp is an ERC-20 token and is a collateral token for instant transactions. As collateral, the cost of any transfer is insured until it remains unconfirmed. Thus, merchants do not face any risks, as AMP is used to secure every transaction. That is, when the consumer sends the payment, Amp tokens are locked in the smart contract as collateral. If the transaction fails for any reason, the locked AMP will be automatically converted into fiat and transferred to the merchant.
All this is provided by Amp token stakers, who receive fees from each successful transaction within the app.
Flexa Capacity is a place where you can stake your AMP. This is done by connecting a wallet. The staker needs to select an app, for example, a Spedn App, and deposit the required number of tokens into the staking pool. Stakeholders receive income in the form of a percentage of each successful transaction made using their Amp tokens. In addition, Flexa issues an additional 1 billion Amp tokens once a year, which go to reward stakeholders. However, in addition to the reward, the stakeholders also take on some risks. If the transaction fails, the deposit is liquidated, and the amount is sent to the merchant’s account.
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Flexa is one of the most ambitious players in the cryptocurrency market. The developers have found a solution that can shift the current power of centralized payment services and motivate merchants to adopt cryptocurrencies massively. Flexa provides all the necessary conditions for it — instant, secure, and cost-effective transactions. Moreover, developers realize that their service must comply with regulatory requirements and data protection regulations for cryptocurrency to receive mass adoption. Therefore, we can safely say that Flexa is a game-changer. Perhaps soon, you and I will live in a world where you can easily pay with your favorite cryptocurrency for any good or service and not worry about the need for currency conversion.