It’s not a secret that the ICO made an incredible breakthrough and a boom in the financial area and became the No. 1 method for raising funds. Both in terms of speed and volume. An experienced investor will probably notice that many ICO projects launched only accept crypto-currencies, and then mostly bitcoins and Ethereum.
Even though the project is promising, the team is strong and Vitaly Buterin is in the advisers – anyway, in the daytime with fire, you will not find support for the fiat of money from them. Why and how to solve this? And whether it is possible at all.
Fiat money, or money, regulated by the state though for a long time without a binding to valuable metals in particular to gold. They are convenient, and thanks to credit and debit cards payments can be made instantly. Sweden a few years ago switched to an exclusively non-cash regime, India has long been looking in this direction.
You can find out more in detail which jurisdictions to choose for the ICO project. Payment by payment cards over the Internet has gained a peak in popularity thanks to international online shopping. If you pay close attention, how many types of cards? Visa, MasterCard, AMEX, UnionPay in China. An incredible advantage for the founders of ICO platforms and companies. However, why is the Fiat receiving money on the ICO still rare?
Let’s look at how many types of fiat money reception there are. First of all, this is all known plastic (or obsidian) cards, and the second is a bank transfer.
Affordable, easy to implement, as in processing it is an international bank transfer. SWIFT payment is received on the account within several working days, and on the fear of the European Union within a few hours (SEPA transfer). Looking at these benefits, one can’t help wondering why still bank payments are not so popular. The fact is that they are simply unprofitable and complex for small transfers, but they are ideal for launching a crypto exchange software.
A major transaction (meaning more than $ 1000) is rarely made on ordinary ICO. They are more likely to be included in projects that want to collect hundreds of millions of dollars and have a clear fixed minimum amount of donations. By the way, the word investment, but quite correctly from a legal point of view.
Visa and MasterCard payment cards
Payment systems refuse to work with crypto-currencies. Integration directly with Visa is fraught with pitfalls in a sudden refusal on their part, or interruptions in work. After all, you are not a merchant.
However, some projects still have the opportunity to receive Fiat money through cards. In 90% this is realized through the use of an intermediary. Having done market research and developed crypto-exchange, these players cooperate only on harsh conditions. Charging from 5% for input of money.
Of course, you can integrate them, but who will pay the commission? Are you or your investor (or is the client more correct)? Users do not want to pay more than commission, this is one of the reasons why crypto-currencies have become world famous and popular. It just goes against their ideology and perception. There is a spare option – the separation of the commission of the user and the platform.
There is also a third option for introducing fiat money into the ICO platform. The first step here is the registration of a legal entity, and then the choice of a bank that will cooperate with you. I want to warn you immediately that in the CIS countries it will be very difficult. And in the US it’s almost impossible. Under the notion of “impossible”. I want to note that we mean an inadequate ratio of funds for development and integration to profit.
Advantage of cards
At one time, players like PayPal or Stripe, and many other merchants provided the next opportunity for users. Namely – the return of funds, cashback. In the world of digital technology, online payments, reviews (remember the black mirror?), We need the opportunity to return funds and challenge the product or service with support and, as a consequence, abandon it.
Even if, and you implement the functionality of accepting money through PayPal or Stripe, this is fraught with you first of all that your investor will require a refund. The tokens are already on their account. It turns out the following situation, ICO is not a divorce, the investor themselves deceive the founders. Well, where is this good? By the way, if you need to or you are just interested in creating an ERC20 token on Ethereum, this business is also fixable.
It should be mentioned the stories with The DAO happened in the US several years ago. The SEC took tough measures to regulate crypto-currency, and if they count your tokens as securities. The close attention of the commission will be riveted to you, perhaps they will even limit the activities of your platform. When the functional is tied to Ethereum smart contracts, we are talking about a complete collapse of the system, which we can’t afford.
An excellent substitute for cards or indirect use of it are merchants working in the field of online casinos and gambling. Who would not say anything, but from the point of view of the ICO fiat, the crypto-currencies and exchanges are compared (and indeed they are in many ways similar) with gambling. Fortunately, they have trampled this way for a long time. There are merchants like Skrill who will happily work with you.
By the way, they offer plastic cards, and with the delivery of DHL, you will get them anywhere. Payeer, AdvCash are very famous and popular in the CIS market, in particular, the Russian Federation. What is noteworthy, they take an affordable interest, and most of the banks work with them. They are also used as an interim account tied to your virtual card for withdrawal by cashing in bitcoins or other crypto-currency.
Being closely connected with jurisprudence, we conducted an analysis of some 118 top-ICOs to sort out. Where, how and why they registered the company. Legal documents are still the weak side of many projects.
By the way, this item with the due attention of marketers may not be a disadvantage, but an advantage. Read more in the ICO marketing plan. Imagine our surprise that almost all projects mentioned that their token and the money received are just donations and can’t be returned under any circumstances.
The exception is only the same registered smart contract Ethereum which acts as an escrow-guarantor of the platform, if the required goal is not achieved, then all money will be returned to users. Here we are talking about Ethereum and other crypto-currencies.
By the way, pay attention to our article how to create your own ERC20 token. I want to make a reservation, in the above-mentioned study only projects that collected more than 1 million US dollars took part.
Despite the fact that 2016 and 2017 were the peak for fundraising campaigns and made a real sensation, Fiat money is still a tasty opportunity at the launch of the ICO. Integration of Fiat is almost impossible without intermediaries, and with their help, it is extremely unprofitable because of the high commission.
Perhaps the situation will change radically for the better when most countries and governments will be loyal to them. Australia and Japan showed the first significant steps. To date, there is a rare shortage of strong and young players to receive fiat money. Perhaps this is your opportunity.