Despite all the speculation and hype around the investment, the cryptocurrency has so far struggled to find meaningful use cases. Now, Singapore is striving to convert the general public to cryptocurrency through blockchain payments.
Cosmose AI, a nine-year-old company that uses artificial intelligence analytics to track store traffic and engage with online shoppers, has partnered with Near, one of the blockchain protocols that competes with Ethereum. The couple is building a payment system that allows users to buy with cryptocurrency at low transaction costs, saving both buyers and sellers money.
As part of the partnership, the Near Foundation, the non-profit arm of Near that supports the development of the protocol ecosystem, has made a strategic investment in Cosmose. The round, the amount of which has not been disclosed, raises the company's valuation to $500 million, compared to the $100 million with which it closed its financing of A league of 15 million dollars in 2020.
Cosmose's suite of retail solutions includes the KaiKai app, which allows customers to discover retail stores in their physical proximity, and an online targeting platform, both of which are getting a blockchain makeover with the help of Near. .
Miron Mironiuk, the company's founder and CEO, was not looking to ride the cryptocurrency wave, but rather to find a solution that would make online payments cheaper for consumers and the merchants Cosmose serves.
“I don't know if you know how expensive and slow it is to process online payments. It's absolutely crazy," Mironiuk said in an interview.
He gave the example of buying a $5 cup of coffee. Payment processing companies like Stripe and PayPal effectively charge more than 10% for small transactions, so the seller ends up raising prices, forcing the buyer to pay 6-10% more. In a year, the coffee consumer could easily spend $200 more just because the transactions are handled by intermediaries like Stripe.
Pay with cryptocurrencies
With its Near-powered blockchain payment system, KaiKai, where users can discover nearby products and pay through the app, claims to reduce the transaction costs of one person's annual coffee consumption to just $4, which is about $50 times less than the Stripe or PayPal method, according to Mironiuk.
“Imagine how much could be saved if all payments were moved to the blockchain,” says the founder.
Not all blockchains are cheap to use. One of the biggest challenges facing cryptocurrency adoption is the exorbitant fees involved. Without a centralized settlement system, cryptocurrencies rely on a distributed network of validators to verify on-chain transactions. That process on Ethereum is notoriously expensive, so alternatives like Cardano, Pokadot, and Near have sprung up to make cryptocurrencies cheaper and more scalable.
KaiKai, Cosmose's store discovery app, settles payments in its native stablecoin Kai-Ching, which runs on Near's network. The app creates a crypto wallet for users, who can top up Kai-Ching with fiat currencies. In the future, users might have the option to convert Kai-Ching back to fiat.
Cosmose maintains a treasury for the Kai-Ching, which is pegged to the US dollar (1 Kai-Ching = 1 US cent) and can only be traded within the app to avoid value volatility.
KaiKai first launched the option to pay with cryptocurrencies in Singapore last September, where the government is formulating a stablecoin regulation. Since then, Kai-Ching has processed more than one million transactions in the form of payments, refunds, and rewards.
Prices drop automatically when users choose to pay in Kai-Ching. More than half of Ka-Ching users are from Generation Z, and they are “super comfortable” with cryptocurrencies because they know “the coins are on the chain” and “they own them,” the founder observed.
The company declined to disclose how many cryptocurrency users it has amassed, but one piece of information sheds light on its user behavior: A third of transactions are paid with Kai-Ching. Given the traction in Singapore, it would not be surprising if Cosmose brings Kai-Ching to other crypto-friendly jurisdictions in the future.
Make your data yours
Cosmose and Near have come up with something that seems even more ambitious. One of the promises of blockchain-based applications is to return control over personal data to users instead of keeping it on centralized servers of big tech.
Essentially, Near is helping Cosmose migrate user data onto its blockchain and build a system where users can see how the company is tracking them, including their location, when they open the app, what products they check out, and How long do they stay in it?
The goal is to store user data on their phones using edge computing and let people decide how they want to be tracked in order to receive more or less accurate product recommendations and rewards.
“It is not just a technical challenge. It is also a user experience challenge, of how to do it in a way that people can check it, obtain information and decide quickly”, says the founder.
Since its inception, Cosmose has served more than 20 million stores and reached a billion phones worldwide, of which "hundreds of millions" are in China. The company has a team of 80 employees in Warsaw, its engineering base, as well as in Shanghai, Hong Kong, Singapore, Tokyo and Paris.
