Fernando Almiñana for Paystreme

Posted on Feb 3, 2023 • Edited on Jul 4, 2023

Paystreme Progress Report

#grantreports #streamingpayments #ilfgrantee #paymentpointers

Hello everyone! The Wallet Guru team is excited to share with you our progress thus far. Paystreme is a payment streaming platform that enables users to pay in real time for utility services such as cell phone coverage, broadband internet, pay-TV, and content streaming. The company will initially target utility companies located in Latin America, where there are approximately 365 million prepaid subscribers in these four industries alone. These users typically pay higher rates than post-paid clients and could benefit significantly from an ILP-enabled payment system such as Paystreme.

Project Update

The Paystreme project is going well and progressing as planned. We continued researching the regional market trends and concluded once again that LatAm's history of economic and political uncertainty creates a fertile ground for innovative digital payments and the internet of value to thrive. We have also made considerable progress in understanding the intricacies of the ILP and researching for potential vendors, partners, and/or developers, to form part of the team that would be responsible for developing the prototype. Lastly, we are proud to announce that we recently won an award from the Stellar Development Foundation, which will also be supporting us in making Paystreme fully operational.

Progress on objectives

We have made considerable progress on most objectives specified in the original plan:

1. Business vs. technical requirements: After continuous research, the application's business and technical requirements are much clearer:

Our platform must offer a turn-key solution for utility companies that wish to enter the Fintech industry and must also be capable of integrating into existing mobile money platforms. The ILP is ideal for obtaining this interoperability.
The solution must offer both cash and local fiat on/off ramps. Fiat ramps must be present in the US and local countries in LatAm.
Wallets must support local currency and a stablecoin pegged to a hard currency (preferably to the US dollar - USDC running on the Stellar blockchain being the ideal candidate for numerous reasons).
Wallets must be able to stream funds to utility companies as services are requested.
As a medium term objective, we will incorporate a liquidity management tool such as Ripple's Liquidity Hub to optimize the flow of funds between currencies and jurisdictions.

2. Overview of the money flow from legal and license perspectives: We now understand that it is required to have custodial accounts to operate financial nodes in the Interledger Network. Also, it is now clear that to ease the regulatory requirements to use MoneyGram's network of 450,000 worldwide affiliates as cash on/off ramps; we will develop part of the solution as a non-custodial Stellar wallet (to use MoneyGram's licenses in all countries in LatAm and the rest of the world, the Stellar wallets necessarily need to be non-custodial).

3. Followup on OFR financial license application: We have finalized our application as a money service business in the Office of Financial Regulation of the State of Florida very recently. We expect to have our license approved within the next couple of months.

4. Funds flow between participants: The final architecture will be a hybrid solution: funds will flow from non-custodial wallets to custodial wallets in some instances and strictly between fiat accounts in others. However, we are still designing the final architecture, as we still need to test the Grant Negotiation and Authorization Protocol in ILP-enabled wallets and Rafiki. Also, we would like to test Payment Pointers before finalizing the architecture.

5. Leverage our relationship with Blue Guava (contractor): Blue Guava has aided us in researching design alternatives and technical/financial requirements for setting up the infrastructure required to run Paystreme. We have focused carefully on this crucial aspect, for the solution needs to be highly scalable and capable of supporting several million concurring users.

6. Understanding the STREAM protocol details and modeling; ILP Wallets and money transfers; evaluating ILP node configuration and activation: this crucial technical research and testing have been waiting for Rafiki to become fully operational.

Key activities

The most important activities we have done so far are the following:

Attending the ILP Summit in New Orleans: Attending the Summit allowed us to meet the ILP team and fellow cohorts. Doing so provided us with a direct line into the current state of the ILP and where it's headed in the future. Because of the Summit, we have also been able to expand our network and receive support and feedback from industry leaders.
We have filed our application at the Florida Office of Financial Regulation for a Money Services Business License. We have also decided to apply for a second license in a different state and are considering the State of Nebraska because of its openness to financial innovation. We continue to work closely with our Compliance Officer in hopes we can expedite the process.
Technical conversations with Alex Lakatos: Speaking to Alex on several instances has provided us with much-needed technical guidance. He provided indispensable literature and resources for our research and design process. During these conversations, it became clear that it would be possible to stream fiat funds using ILP (we were under the false impression that it would only be possible with digital currencies such as XRP or XLM).
Paystreme was selected as one of the winners of Stellar Community round 11, which had 152 submissions from 34 different countries. Being one of the 21 winners will allow us to streamline our integration into the MoneyGram Access program and Stellar's network of fiat ramps in all of LatAm. We are currently conversing with several ramps in Mexico, Colombia, Brazil, Peru, Argentina, and Chile.

Communications and marketing

We are currently focused on researching and determining the next steps for developing Paystreme and have dedicated limited efforts to the marketing process. However, the company was invited by the Government of El Salvador to meet with several of its representatives and important players in the telecom and private sector, which could serve as important allies when deploying Paystreme in Central America.

The company is also marketing its crypto payment gateway to several clients in Argentina. This simple solution enables clients to accept digital currencies as payment and settle transactions in USD or other local fiat currencies. Integrating into their billing systems allows us to upgrade to Paystreme relatively easily.

What's next?

To finalize our research process, we need to accomplish the following tasks:

Obtain final approval of our money service business license in Florida.
Begin testing Rafiki, ILP-enabled wallets and Interledger Nodes. For this, we need the proper documentation, which will be provided by Alex Lakatos when available (hopefully very soon for this is a crucial process). Once this stage has been completed we will be able to properly disburse the remaining funds.
Coordinate an in-person meeting in Madrid with ILF's and Paystreme tech teams.
Consolidate our development team by adding one or more Blockchain / Fintech specialists that can complement Blue Guava's (our main contractor) competencies.
In preparation for having the prototype fully operational, we have been shopping around for a more crypto-specialized bank partner that can support our operations. We have still not found a good fit for our requirements in the future.
Define the prototype development strategy: in house development vs. using a third party vendor for wallet application.
Request a budget reallocation approval in order to cover some activities that were underestimated.

What community support would benefit your project?

Any suggestions as to which US bank could be a good fit for our operations in USD will help us in achieving our goals sooner.

Also, we are in need of consolidating our development team and in search of specialized talent. Any recommendations will be greatly appreciated. WE ARE HIRING!

The Interledger Community 🌱