At the conclusion of my first Flipstarter, "Documenting Bitcoin Cash Adoption in the Philippines", I am reflecting and summarizing the lessons and tips gathered from time spent with the Paytaca team, visiting their newly onboarded merchants, and also what I witnessed as a foreigner in the Philippines that spoke to the potential for building a parallel Bitcoin Cash economy here in the future.
I spoke with Joemar Taganna (CEO) and Aaron JP Almadro (Marketing Director) at Paytaca to learn what they've been doing in Tacloban to spread BCH adoption, and also their plans for 2023. Here are some noteworthy quotes and takeaways.
Our first interview:
I related the situation with BTC legal tender in El Salvador, and how it was actually being used as a remittance market, with ATMS set up across the country for migrant workers from El Salvador in other countries to easily send money home to their families. With the large market (1.77 million) of Overseas Filipino Workers, it's clear that the potential for using Bitcoin Cash for remittances will be enormous in the coming years. Aaron replied "that's one of our goals — to use it as a remittance",to which Joemar added, "we are planning at some point to tap into the remittance market, but we feel that we need to build first a network of partner merchants, so that those who receive the remittance can spend directly in the shops"
Speaking to the demographic of potential adopters, (of 109 million in the Philippines), Joemar continues,
"About 70 million have access to the internet, and 90% of that 70 million have smartphones, so we are like the biggest percentage maybe in developing countries that have smartphone usage. The market is like ripe for this kind of disruption."
In El Salvador, I encountered merchants dealing informally (in cash) which didn't have regular service on their smartphones, so the likelihood that they would buy service for their phones just in the hope that someone came by wanting to pay with BTC was much lower. It seemed to me that the Philippines is more equipped to actually use this technology, especially when I learned that other e-wallet providers GCash and PayMaya had paved the way already in 2020 with contactless payments. While they compete with Bitcoin Cash as fiat payment apps, the benefit of people already being comfortable with making mobile payments that previously dealt mainly in cash cannot be understated.
Continuing on the conversation about getting merchants in the country to accept Bitcoin Cash, I asked the Paytaca team if the merchants would also be swapping for [Philippine] Pesos. Aaron responded, "I would expect it will happen initially. That's one of the concerns of the merchants, like how will they use the Bitcoin Cash if they can't cash it to Pesos" with Joemar continuing,
"unless we're able to build like a closed-loop economy, where the producers also accept Bitcoin Cash. That's one of my dreams. I'd like to achieve that closed-loop economy. But until that exists, then we would expect that the early merchants that we're going to onboard will automatically (or maybe with a bit of delay) they convert to Pesos."
They also expressed that since their wallet was the first to integrate AnyHedge protocol, they are able to combat volatility by freezing the fiat value at the time of purchase for the merchants. This makes the merchants more comfortable.
I talked about how we're trying to build a parallel crypto economy in my home in New Hampshire, and that the success in St.Kitts has shown a great potential for getting all or most businesses and the government on board with Bitcoin Cash. They also shared that Sunny Gehani had reached out with interest to get one of their vending machines, which I demoed in their office in a short video to great response. While a trade is certainly possible, it is more likely that Paytaca develops their own in-house solution. Paytaca also indicated that a future vending machine might incorporate a one-way BTM, integrating the two concepts in one to buy Bitcoin Cash with fiat cash. Importantly, the vending machine only prototype was built without anyone's permission. Without touching the fiat banking system, all you really need are vending machine hardware, coding software to a tablet, and of course a location to put them.
Our second interview:
In our second conversation, I rejoin the team to ask questions about Paytaca and their vision. At the top of the video, Joemar states, "The community in the Philippines — BCH community is growing, and we've seen the need to promote crypto, and at the same time create a wallet that can facilitate a better onboarding experience and better payment experience" They began with a mall launch in October 2022, including a booth and a live demo of the aforementioned vending machine. Aaron explained, "Because of that launch, actually we were in the news for a couple of weeks in the Bitcoin Cash community, and then Joemar received a lot of requests for vending machines to be delivered to their countries." Joemar emphasized that the vending machine was meant to be a promotional side product, with the main product being the (Bitcoin Cash) wallet. He stated,
"It's just interesting how a tool like that can easily drive the point that using cryptocurrency it's easy, it's fast, it's cheap. The experience can be a lot better than using fiat, so I think that was perfect. We launched the wallet and people got their BCH, [...] and then they tried it immediately in the machine. They see it working."
On their target market, Paytaca shares that they are focused first on the Philippines — launching in Tacloban City and then hopefully expanding to Eastern Visayas region in 2023. They hope to prove the concept locally, using relationships and local BCH communities to build this network, and then expanding to nearby countries in Southeast Asia if their model is proved successful domestically. The focus is always graduated, starting local. To this topic, Joemar said, "we want the onboarding to be local. Although the wallet is global, onboarding has to start with localized efforts.
Speaking about the Paytaca wallet, Joemar said,
"one of the things we would like to do is to port our delivery service to the app [...] so it will be like a super app where you open your wallet, there's the P2P marketplace plus the delivery service, and in this system we are going to disperse the payment immediately to the merchant and also the share of the delivery ride. Like for every order. They don't have to wait like the way it's done on other platforms. For I think a week or even month before they get their payout. That's how the old system works, so once we have this one, it's going to demonstrate to me how powerful Bitcoin Cash can be in developing new financial applications."
Paytaca has emphasized that this will be a non-custodial app, and that they do not want a CEX integrated like many BCH wallet competitors. Likening themselves to LocalCryptos, they aim to fill the void and let Filipinos trade directly with one another to buy and sell BCH.
I learned that Paytaca would launch with several merchants, including a fried chicken shop and a cafe, with more to follow including a donut shop, bubble tea shop, textile shop, fishing gear shop, and they would also like to approach local transportation operators about introducing Bitcoin Cash payments in an environment that currently operates with a confusing mix of paper notes and coins being passed between the passengers and the drivers. Not only is it difficult at times to discern which denomination you're handling, but it adds a security issue where large amounts of cash have to be collected, counted, and safely transferred to another location. With BCH, the customers can just scan a QR to pay and be done.
Aaron states,
"That's what we're trying to achieve also in Paytaca, so you can order food, you can pay for transpo, send money, all in one app."
They also related that they'd been able to reach a lot of interested people from their demo at the mall in October of 2021, including college students and businesses that were all curious about Bitcoin Cash. Some which were using legacy solutions for transferring money were surprised that there are no limits for sending BCH, and the fees remain low. Regarding other opportunities to market Paytaca and blockchain technology, Joemar has spoken numerous times publicly, and also acts as an advisor to the Science and Technology department of the local government, who is largely curious and enthusiastic about implementing blockchain technology, and not fearful or eager to ban it. This positivity carries through, and it's why I can see great success for their team in 2023 and beyond.
Merchant Tour with Aaron
I returned after three weeks with the launch of the first new merchants to accept Bitcoin Cash in Tacloban City, on the 20th of December. We were able to visit two businesses on this day, with about 15 businesses planned to follow up in Late January and February of this year. With Christmas right around the corner, and heavy rains creating flooding hazards, it was a challenge to visit the businesses while they were operating normally, so I commend the team for putting things together and training these two locations to share a sample of what's to come.
The first place we visited is called Kudz Fried Chicken Foodhouse, and it is a famous spot in Tacloban City. In fact in writing this article, I came across a few tweets from folks that had cravings for their delicious food!
Situated on a major road, all of the public transit vehicles stop directly in front of the restaurant to drop off and pick up new customers. A short walk away are 2-3 schools, so there is also a lot of food traffic from young and hungry customers. Paytaca chose this location because of its high visibility, and its clientele. It's an affordable eatery, and so having prominent Bitcoin Cash sticker in the window, as well as a planned big Bitcoin Cash banner will certainly bring a lot of curiosity and increased adoption.
Aaron spoke about why they chose to launch in a smaller city like this, as opposed to one of the big cities like Manila or Cebu:
"Tacloban though it's not a big city. It's really small and all of the businesses know each other. So if we get a pocketful of them, they'd get to hear about it and they'd be interested. It won't be a hard time to get them onboard."
The prospect of getting merchants and customers to use Bitcoin Cash for payments as Aaron says "would be not hard to do, because they're already used to paying through GCash. So using another option where they can use crypto, and possibly earn through crypto, it won't be a hard thing to do." Existing solutions like GCash, GrabPay, Shopee Pay, and Lazada Pay already in the market have made consumers very used to this type of payment. And as I witnessed in my own travel in Malaysia, perhaps as many as 10 or 12 different eWallets are accepted there, and there isn't any trouble with both customers and businesses adapting. It's just another option. For stores, they can just install it in their existing POS tablet or smartphone. The barrier of having hardware, having it charged, and having the staff trained is much lower than in places with less mobile payment apps like perhaps even the United States, as I've experienced in onboarding merchants there.
The second place we visited is Cafe Lucia, which is a casual cafe with some food, situated about halfway between the downtown and the airport, on the water with a nice backyard and popular among business owners. Aaron shared that the choosing of this location is intentional because upstairs in the building is the local Rotary Club, where these business leaders often meet. It's also personal to Paytaca, because this is where they had their first meetings when they launched the company back in 2018. I paid for the coffees and then spoke off-camera with a local crypto enthusiast and Aaron before heading to our third location.
The third and final location for the video was a newly opened food park in Tacloban. This may be a place where you can buy barbecue with Bitcoin Cash in the future, but we chose it because absent the holiday crowds, it was a good place to wrap up the trip and talk about Tacloban's vision for merchant adoption in 2023.
Aaron describes some of the businesses to start accepting BCH in Tacloban soon, "We have a spa, we have a milk tea shop, another coffee shop, soon a hotel as well, and then maybe a couple of restaurants as well" It's been key to Paytaca's strategy that they be where people are spending money on a regular, weekly basis, so it is especially important that they reach these different types of businesses. I know they also shared an interest off-camera in getting a supermarket on board as well. Paytaca is in an advantageous position as both the merchant onboarder and the developer of the POS software that these businesses are using. This allows them to get feedback from the merchants on how to serve their customers best.
Speaking to aspirations after they've saturated Tacloban City with Bitcoin Cash merchants, Aaron identifies nearby Ormoc City as a potential site, as well as other cities in Leyte Province, and the Eastern Visayas region after this.
Twitter Space
I hosted a Twitter Space and invited Joemar and Aaron on one more time to recap what all happened during this project. It was in all an incredible experience to spend this time in Tacloban with the Paytaca team, and I feel like we all learned valuable lessons that can be applied to merchant adoption efforts everywhere.
After recapping the previous videos, I invited Aaron the marketing director on to share what's new in the last few weeks since I visited. He said,
"This week will be training a donut store and a milk tea shop. And then we'll be having a meeting with the school here [...] we'll be meeting with their campus director to strike a partnership with them, to place one of our vending machines on the campus."
and added,
"Our head engineer and fabrications manager — actually the brother of Joemar, is going to be fabricating two additional vending machines. We'll be creating other products as well, like an ATM vending machine and a refrigerated vending machine."
The three initial machines would be installed at a local tech high school, at a coffee shop, and also a university with 28,000 students.
Joemar then goes on to say that the placement of the vending machine at the university is a result of petitioning of the students themselves to the school administration, which was surprising to him. I replied,
"You're talking about Eastern Visayas it's a university. So you've got a lot of young people that are familiar with crypto and Bitcoin Cash, and want to use this technology. But not only that — they're coming from all over the province, so they're based in Tacloban City, and of course you want to grow merchants there, but you kind of have this force where when they go home to their families in other parts of the province, they're going to still want to be involved with Bitcoin Cash, and that'll kind of help fuel your expansion to these other cities."
Later on, Joemar announced for the first time that a volunteer group of young crypto enthusiast student organization, known as the "BCH Army" was actually formed in response to enthusiasm expressed during the mall launch, and they've been a major tool in growing adoption, including in convincing this university to place one of Paytaca's vending machines on their campus. This group checks up on businesses to get feedback, and also to educate other students that might grow curious about BCH. They also allow greater awareness of the current state of the 'network', in a way that would be cumbersome for a single person or team to keep track of as it scales.
To close out having the Paytaca team on, they briefly touched on their interest in having another Flipstarter to support the continued merchant onboarding efforts in 2023. (TBA)
Less than two weeks after funding the Flipstarter, I have completed all promised deliverables, including 3 long videos, 1 short, this Read.Cash article, and a Twitter Space. However none of this project would be possible without the 18 incredible contributors.
I can't thank you enough for believing in the message that we're trying to share — to promote Bitcoin Cash merchant adoption, and to honor the efforts of these tireless teams that are at the front of this financial revolution and proof of utility. Bitcoin Cash is a peer-to-peer electronic cash system, it is the best crypto for payments, and I will continue to lend a spotlight to the ambitious teams and individuals in our community through my content.
— Nudge