This is a case study of a fintech company.
Chicago-based startup, Zap Solutions Inc., is maker of both the namesake, non-custodial Bitcoin wallet, and the mobile payments app Strike. Founder and CEO Jack Mallers, recently named in Forbe's 30-under-30 in Finance, was one of Lightning Network's earliest developers. Prior to founding Zap, Mallers worked on a variety of other projects in the Bitcoin space.
- Founded in 2017
- Allows users to send and receive money anytime, anywhere, instantly, and free of cost.
- Currently the leading layer 2 digital wallet.
- Leverages the power of Bitcoin's open network.
Zap raised $3.5 million in its first round in April 2020 from the likes of Green Oaks Capital, Morgan Creek Digital, and veteran Bitcoin investor Anthony Pompliano. This past March they announced a $14.9 million funding round.
The idea of linking the ACH network to the Bitcoin network came to Mallers at a hotel in Paris. He figured if Cash App is the ACH network plus the Square network, and Venmo is ACH plus the Paypal network, "Can I build the ACH and Bitcoin network?" Mallers is an uplifting and progressive presence who has built his company culture around 2 pillars: "Are we bettering the experience, are we bettering the brand?"
Bitcoin is an open monetary network, operating 24/7. It is a digital bare instrument that carries the sufficient liquidity profile in every currency, allowing for the movement of real value 365 days a year, anytime, anyplace. Zap specifically set out to to solve the variable amount of time to achieve finality on a Bitcoin transaction, along with the cost to achieve finality on a Bitcoin payment. With these two solved, Strike brings instant and virtually free finality to bitcoin transactions.
A beautiful and noteworthy attribute of the Bitcoin monetary network is its openness. Effectively Strike provides every human with a debit card or bank account and a smartphone a ramp to Bitcoin's network, ridding users of fees they would otherwise incur with competing services. Strike is simple and very user friendly. The customer does not need to know cryptography, Bitcoin, or any other complications - they send value in their native currency, and the customers receiving value do so in their own native currency.
Transaction example:
- Sara sends $100USD via Strike from Scottsdale, AZ to Nilda in B.A., Argentina.
- $100USD gets instantly converted to BTC, and travels overseas to South America.
- BTC arrives in Argentina and is converted to Pesos. Nilda instantly receives the equivalent of $100USD in Pesos in her Strike account, no value lost.
Strike has now set its focus on Europe, while actively beta testing in the Phillipines, Canada, the UK, and Argentina. It has also announced that it will issue its own Visa card later this year and a "Pay me in Bitcoin" feature that has been made popular by the likes of NFL offensive tackle Russell Okung.
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Payments and remittances domains of the financial industry.
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Trends in these domains have slowly gravitated towards use of mobile technologies, but continue to charge set fees that make small and micro-transactions impossible.
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Some of the other major players in this space are Paypal, Square, Cash App, Coinbase, Venmo, Western Union, Swan Bitcoin.
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Strike is further evolving the landscape by introducing novel concepts such as "stream-pay" - workers could get paid literally by the second / minute, thanks to zero-cost micropayments on the Lightning network. View a 1 minute live demo of Mallers stream paying one of his overseas engineers via the Strike app here.
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Strike's mobile payments app launched in El Salvador in March of this year, and it quickly become the number one downloaded app in the country. Strike expects to enter several more markets, specifically Europe, in the coming months.
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Zap's first killer application has been cross-border payments, as they were outdated and very inefficient; Also kills high fees and fixed costs associated with the legacy monetary system
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Mallers has created a company that leverages the Bitcoin network and all its resourses - he famously states: "How many MIT researchers are working cryptography for the Paypal monetary network?" Strike in conjunction with Bitcoin provide a more inclusive and open monetary network. No closed network can ever compete.
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Strike is quickly gaining popularity as it only charges 0.3% for brokering BTC trades, as opposed to industry leaders such as Coinbase that charges up to 3.99% for buying or selling Bitcoin.
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Mallers anticipates to further lower its fees for brokering BTC trades to 0.1% in the next few months as its volume grows.
While Strike is out disrupting the world, it seems to have neglected basic app security. It is my recommendation they at least include facial / thumbprint recognition, as in theory anyone could pick up an unlocked phone and begin transacting on the Strike app without any security barriers. This is a simple fix Strike could roll out in their next update as all that is required is the actual implementation of these already existing solutions.
A final recommendation for Zap might be to eventually include an educational section to further and more efficiently empower the masses with economic freedom and financial inclusion, although the outspoken Jack Mallers seems to be doing a fine job of educating the masses via interviews, public speaking events, and his Twitter account.
In conclusion, Strike is speeding up the adoption of sound money. It has the potential to grow into one of the world's largest companies with an incredibly large number of users as the internet and mobile technology becomes more widespread and utilized around the globe.
Addendum
SALT Talks #229 - Jack Mallers: Bringing Bitcoin to El Salvador1