In mid-2018, the founders of Bottlepay, a nascent Newcastle-based fintech, came up with the idea to allow people to make payments via social media during a brainstorming session.
“We were like, ‘Okay, let’s put instant payments on social media,’ and we wentogle it and there was nothing there,” recalls Pete Cheyne, founder of Bottlepay. “We were kind of stunned and it became for us this ongoing research and development project.”
Things changed in early 2019 when Cheyne and his colleagues discovered the Lightning Network, a so-called “ layer 2 ” payment protocol that sits on top of blockchain-based cryptocurrencies such as Bitcoin or Litecoin. , allowing instant transactions to be sent with minimal fees.
In April 2019, Bottlepay participated in the first-ever Lightning Hackathon, showcasing a proof of concept for an app that allowed consumers to pay through various social media platforms in cryptocurrency. “We basically did 48 hours on caffeine, no sleep, and we entered this competition, which we won,” Cheyne said. “And that gave us the seal of approval that there was something out there, so we spent the next 14 months creating this new payment rail, which can basically connect to any system that exposes an API, as many public social networks all have. Apis. So we can very easily add an economical layer to their product. “
Earlier this year, Bottlepay released its app to the public for the first time, allowing UK users to send Bitcoin payments to another user on Twitter. This month it launched in Europe and the team now plans to roll it out in the US and Asia, as well as expand the service to Reddit, Twitch, Mastodon, Telegram, Discord and other platforms. social.
Cheyne admits the timing of the deployment was perfect. 2021 has been a boom time for the cryptocurrency industry, with digital assets like Ethereum and Dogecoin reaching record highs. Some industry experts predict that social media could help accelerate the development of cryptocurrencies as a mainstream payment method.
Over the past two years, Tel Aviv fintech PayKey has developed social media payments for banks such as First Direct, which allow bank customers to select an icon during an in-app conversation and make a payment.
Sheila Kagan, CEO of PayKey, predicts that these payment methods will become more and more common, especially among younger generations, as the world moves towards integrated finance.
“We spend over 50% of our mobile time in social and messaging apps, which is where we make most of our financial decisions today,” Kagan said. “A recent study conducted by YPulse found that 58% of Gen Z and Millennials are interested in buying items directly from social media feeds like Instagram, Facebook, Pinterest and others. Services like WhatsApp Pay, launched in India and Brazil in recent months, should capitalize on this trend. “
Today, social media payment apps are establishing a niche for creators of digital content, such as Twitch streamers or YouTube, to monetize their services. A number of streamers are already accepting payments in a variety of cryptocurrencies, and Cheyne expects this community to drive the adoption of crypto as a way to make micropayments on various social platforms.
“The people who generate content, they are already very familiar with the different methods of compensation and payments, they tend to be very creative and very willing to embrace new technologies,” he said. “So it’s a completely natural cohort for us.”
While the banking industry may take a little longer to integrate cryptocurrencies into their social media payment offerings, Kagan predicts this will happen as various financial institutions, especially in Asia, begin to adopt platforms. -blockchain-based forms in social media environments.
“I expect some players, especially in Southeast Asia, to lead this trend based on their level of API openness and technology adoption,” she said. “Since we work with highly regulated banks, the rate at which new technologies are adopted is naturally slower in order to protect consumers as mandated by governments, but once banks join the crypto movement, they will certainly use banking solutions. built-in to facilitate cryptography. payments in social media and messaging environments. Cryptocurrencies are definitely here to stay, and I think we’ll see them used in more and more ways to pay and transact through social media and other channels. “