When Zac Cheah and Pitt Huang decided to start Pundi X in 2017, they had only one idea in mind – to make blockchain a part of everyday life. In 2010, the duo saw the world accelerating towards digital in every aspect of life. And, there was a need to bridge offline transactions over online and vice versa.
Zac has been the W3C Chair of HTML5 Interest Group, while Pitt, a serial entrepreneur, founded and sold his first Groupon-like company at the age of 25. He believes that transactions on the blockchain will allow people to accumulate universal trusted financial online records, as well as facilitate trusted peer-to-peer transactions.
However, blockchain technology is only used by the selected few due to various technical thresholds, such as the difficulty of understanding how the digital asset can be transacted and used.
Since its inception, Pundi X has launched its operating system (OS), a phone, a point-of-sale (PoS) solution, and a blockchain-powered wallet for online transactions. It has also raised funding from the public token sale, where about 13,000 people participated. It raised $35 million worth of Bitcoin (BTC), Ethereum (ETH), and XEM in January 2018.
Pundi X’s platform has supported and integrated multiple blockchains including Ethereum, Binance Chain, and NEM blockchain. Pitt says they are developing the next generation of blockchain ecosystems to facilitate further decentralisation and enable faster transactions called – Function X. The f(x) ecosystem consists of five elements – f(x) operating system, f(x) public blockchain, f(x) FXTP, f(x) docker, and f(x) IPFS.
f(x) chain is a set of consensus algorithms in the form of a distributed ledger, as part of the Function X ecosystem. The blockchain is the building block of the distributed ledger that stores and verifies transactions including financials, payments, communications (phone calls, file transfers, and storage), services (DApps), and more, where high speed is achieved via both software and hardware implementation (XPOS, XPhone, etc.).
According to the founders, the cost to build the product involved software and hardware engineers, as well as marketing and sales teams to secure orders. Before shipping the devices to the market, the startup checks the cost of the product sample, mould, and certifications including CE, FCC, KC, among others. It takes about six to 12 months to build the product.
In an interview with YourStory, Zac Cheah, Founder of Pundi X speaks about the startup’s platform, and how it aims to bring blockchain to everybody’s life.
Edited excerpts of the interview:
YourStory (YS): What does Pundi X do, and what are the products you have developed so far?
Zac Cheah (ZC): Pundi X is a leading developer of blockchain-powered devices including the world’s first point-of-sale (PoS) solution – XPOS – that enables merchants and consumers to do speedy transactions on the blockchain in physical stores.
The XPOS has been shipped to over 30 countries including Argentina, Australia, Colombia, Korea, France, Switzerland, South Africa, Taiwan, the USA, Uganda, among others. At present, the XWallet, Pundi X’s mobile payment app, has crossed the 700,000 registered user mark.
Pundi X is also the creator of the world’s first fully-functional blockchain phone – Blok-On-Blok (BOB), powered by the Function X decentralised protocol, that is designed to empower users to reclaim their data privacy.
The company is headquartered in Singapore. Its international presence includes offices in Jakarta, São Paulo, Seoul, Shenzhen, Taipei, and Tokyo.
YS: Why does the startup use blockchain for its devices?
ZC: Blockchain, like the internet in the ‘90s, is at a similar stage of development. By leveraging the blockchain technology, we can transmit and store data in a decentralised way. It is not only easy to develop a blockchain device for people to use the technology, but to put our proof-of-concept in the market to be tested first so that we can improve and invite more partners to join this evolution.
We believe a blockchain phone OS can be transformational as it enables users to securely send and receive data of all kinds, as well as returning the data ownership to the users. What this does is, help the users share data the same way they do it online but, in a much easier and more secure way through the blockchain.
The idea is to put blockchain in the hands of millions of people through a smartphone and returning the control of their data to them. By offering people the choice to be independent of a centralised communications network, we’ve created a new use for blockchain that can be appreciated and used by most people.
YS: What are the core focus points for Pundi X?
ZC: At Pundi X, the goal is to make blockchain technology more accessible to more people, especially to the unbanked population, which has been left out from banking services and digitalisation of mobile payment.
For example, over 50 percent of the population does not have a bank account in Indonesia. Additionally, countries like Pakistan, Vietnam, the Philippines, Mexico, and Nigeria have more than 50 percent of the unbanked population. There’s a huge untapped market that needs to be serviced.
Hence, we’ve developed a solution that involves a physical card, which allows people to make a digital transaction without a mobile device or cash. It is similar to the transportation card that is widely used in some countries as a form of payment on the bus, train, and other retail outlets. By having a PoS terminal in physical retail outlets, consumers can enjoy the convenience of offline digital transactions.
YS: What are the challenges you’ve faced so far?
ZC: While setting up the operations, we faced regulatory roadblocks as we looked at deploying our technology across countries. One of our key agendas was to stay ahead of the regulatory curve and make sure we remain compliant in the markets we operate in. To achieve that, we implemented a pretty robust KYC process, ensuring we are compliant with regulations set at large. And to make sure that we stay plugged in and aligned to the regulatory space, we have ongoing and open communication with the regulators and monetary authorities in jurisdictions in these countries.
In countries where the jurisdiction is supportive, we will accelerate deployment; and in jurisdictions that consider our operations to be non-compliant, we will exit that market.
We are seeing more businesses pushing for the adoption but they are struggling to understand the blockchain technology as it is still evolving.
There are two key factors to consider when it comes to deploying any new technology: first is security, and second, the ease of use. Security remains our utmost importance as we have to make sure no matter what, our users feel safe and comfortable storing their digital assets. As for the ease of use, we constantly seek feedback from our users to improve the experience for all our products.
YS: Do you have any plans for India?
ZC: India is a hotbed for startups. They form the backbone of the economy, and over the years, we saw a lot of innovative crypto-startups mushrooming in the country. There is immense scope in this sector, and it could help the economy on the growth trajectory with regulatory support.
In spite of the resistance, we have seen an uptake on our digital wallet, supported by the blockchain technology in India. In fact, India is among the top 10 countries where we see active transactions on our XWallet. This explains the demand of Indians towards new technology, and their willingness to experiment and remain at par with their global counterparts.
Our plan for India is two folds. First, to grow more users in India, and second, to have Indian developers to develop apps on Function X.
YS: What is the kind of growth you have seen in terms of revenue and numbers?
ZC: In our last quarter, we saw a 57 percent growth in the number of registered XWallet users. At present, we have over 700,000 registered users. XPOS devices have been shipped to more than 30 countries so far, and have 1,000+ active XPOS units used in several retail outlets. A total of $21.5 million worth of crypto transactions across the Pundi X platform has been recorded from January to September in 2019.
We have brought the first blockchain-based PoS device to the market, making crypto transactions faster and easier. The transaction takes less than one second to confirm, which is the fastest confirmation speed in the market. XWallet mobile app is the first blockchain wallet in the market that integrates the crypto gift feature, where the users can send and receive digital assets directly from their Telegram contacts.
XWallet is the only wallet app in the market to integrate Samsung Blockchain Wallet, Binance Chain Wallet, and MyEtherWallet, giving the users more options to manage their digital assets.
Further, we launched the world's first blockchain phone, and successfully made a call on the blockchain.
Our clients include merchants, distributors, OTC, and exchanges to blockchain developers. For Pundi X, there are three types of revenue sources: the sale of the devices, crypto transaction fees, and advertising such as XPASS card customisation, token listing, and product placement, among others.
Our distributors and merchants enjoy a share of the revenue generated from XPOS sales and crypto transactions. They get between 15 and 20 percent from the sales of XPOS, and the company has about 10-15 percent margin for each unit.
For crypto sales, XPOS allows merchants to set up the service fee from the transaction. Of which, 65 percent goes to the merchant, and Pundi X gets a 35 percent cut.
YS: How does the XPOS work?
ZC: Pundi X’s cryptocurrency point-of-sale (PoS) devices – XPOS – facilitates cryptocurrency transactions at any physical store. XPOS can digitise the brick-and-mortar stores by enabling customers to buy digital assets using a bank card, a mobile wallet, or the Pundi XPASS.
We continue to improve, refine, and optimise the hardware, software, and security of our PoS solution to maintain the best in class quality. Mass production of the XPOS started in February 2018, and the startup has plans to deploy over 100,000 XPOS devices in more than 20 countries.
YS: How does the XWallet work?
ZC: We introduced the XWallet mobile app in 2018. It serves as a bridge to connect regular digital asset wallets with the startup’s digital payment ecosystem. It is complementary to the XPASS card and/or can be used independently of it.
XWallet is a critical addition to the Pundi X blockchain ecosystem, which gives consumers complete control over the digital assets at their fingertips and allows them to make cardless/cashless digital asset transactions at retail stores.
The collection feature allows merchants to accept crypto payments directly on their phones. The customers can simply scan the QR code provided by the merchants and complete the payment. This is another way for merchants to use Pundi X technology to easily accept crypto payment.
To activate this feature, the merchants are asked to submit an XWallet merchant application. Once the application gets approved, the “Collect” page gets marked with “Pundi X verified merchant.”
The merchant can open the XWallet app and show the QR code on the “Collect” page for customers to scan and pay, or simply tap the “Save” on the “Collect” page to download the QR code as a picture, which can be printed and used by the customers to scan and pay. The payment then goes directly to the XWallet Merchant’s Virtual Card account.
YS: What are the other crypto products that Pundi X has developed?
ZC: We have also developed an NFC-enabled multi-currency debit card called an XPASS card. Here, users can top-up and spend over 17 digital assets that Pundi X supports on the card via the XPOS terminal. XPASS card users can pair their physical cards so that they can have the feasibility to manage their digital assets including internal and external transfer.
We also have an ‘Open Platform,’ which supports blockchain developers, digital asset issuers, and businesses to freely apply and list their custom digital assets onto Pundi X’s payment ecosystem, including XWallet, XPOS, and XPASS cards.
At present, both the developers and merchants can easily make their digital assets available to serve various offline and online payment scenarios. Currently, the platform supports ERC20 and BEP2 tokens. We also continue to expand the digital assets of other blockchains.
YS: Pundi X also launched a phone. How does it work?
ZC: Blok on Blok (BOB) is the first smartphone where every bit of data is executed on the Function X blockchain ecosystem. The smartphone doesn’t allow any centralised service providers to keep users’ data while using their services, which means that calls, texts, and every digital platform the user accesses, will be fully decentralised, giving it a layer of privacy and security.
The BOB allows users to seamlessly switch between the blockchain and Android mode. While the blockchain mode will run on the open-source f(x) OS and will contain all of BOB’s decentralised processes, the Android mode will resemble the traditional Android-powered devices.
BOB will not only give users complete control over their data, but it will also let users personalise its design. BOB offers a customisable design to represent how it prioritises its users’ needs first. Each unit of BOB comes with the MOD Assembly Kit, which consists of detachable parts that make up the XPhone’s external look and users can also add external accessories to make it unique.
YS: What are your plans for Pundi X?
ZC: We plan to ship over 100,000 XPOS devices and activate millions of users by 2021. For product development, we will focus on developing the Function X ecosystem, and establish partnerships with relevant partners to adopt blockchain technology.
(Edited by Suman Singh)