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Crypto Payments Insights With Scott Of Cryptogic

With Crypto currency gaining more traction every day the landscape can be increasingly complex. Cryptogic co-founder, Scott, joins us to bid farewell as PayPod’s trusted host and explore the future of Crypto currency payments and investing, discussing key insights and advancements in alternative payment technologies.

Payments & Fintech Insights In This Episode

  • Why it’s important for everyone to have a basic level of understanding of cryptocurrencies, blockchain technology, and their potential payments applications.
  • The story behind Cryptogic and their mission to aid crypto investors in making intelligent long term decisions.
  • Potential benefits and challenges for merchants adopting cryptocurrency as a payment option.
  • Scott’s insights on the future of blockchain technology and payments.
  • And so much more!

Featured on the Show

Episode Transcript

Heather: Hi, everyone. Welcome to another episode of PayPod. I’m your new host, Heather Bodie, and so honored to be trusted with carrying the PayPod torch, so to speak, where we will continue to explore topics in payments and FinTech. For my first show here with you, we’re going to be once again turning our attention to the world of cryptocurrency payments. There is much promise with crypto, but what does it take to truly deliver on it? Joining me to help explore this is someone you may be quite familiar with, Scott, former host of this very show, PayPod, and current co-founder and host of Cryptogic, a multi-platform financial media brand that provides news and analysis for cryptocurrency investors. Scott has a lot of insight to offer, and we’re so lucky to have him here. Scott, welcome to the show.

Scott: Hey, Heather. Thanks for having me.

Heather: Absolutely.

Scott: This is so weird. I’m in the interview chair now.

Heather: Are you nervous?

Scott: A little bit. I’m out of my element.

Heather: Well, we’re excited to have you, and I’m sure you will be an absolutely fabulous guest because of all of this experience you’ve had on the show. I am so grateful to be in your seat today, so thank you for trusting me with all that you’ve built, and all of the conversations that you’ve held around FinTech and everything that PayPod has become, so thanks for being here.

Scott: Absolutely. Well, thanks for having me. So, what do we got?

Heather: Today, we want to explore the payment side of cryptocurrencies. And I’d like to begin with a big question. Why is it important for anyone, including those who may be underserved in the financial world, to understand blockchain, cryptocurrencies, and their potential payments applications?

Scott: I think it’s such a great question, because crypto is still so new. And there’s this question of okay, well, “Is it going to remain? Is it a big deal? Is it not?” I am of the mindset, and obviously, I co-founded a company all about discussing this, but I think the cat’s out of the bag. Cryptocurrency, and digital currencies in general, are here to stay. So I think that alone is reason enough to say you need to understand the potential payments applications. But then beyond that, if you look at the landscape, the big players are getting involved. Visa [inaudible 00:02:43] has crypto-linked card usage. You have MasterCard getting involved. You have, I guess it’s now called Block, but formerly Square, huge Bitcoin holdings. Jack Dorsey is all about cryptocurrency.

So, when you have that, and then from the investment side, and I know we’ll touch on that in a bit, but when you have institutional investors having more and more interest in it, it’s going to be just a matter of time before your grandmother’s financial advisor says, “Have you considered adding cryptocurrency to your portfolio?” These things really, really do matter, and so it means it’s all the more important for folks, whether you’re in the payments or FinTech world or you’re just an average consumer, to have at least some awareness and understanding of cryptocurrency. And then the last thing I would point out, and this is really important when we’re talking payments, it’s the technology, the underlying technologies that I believe can truly change the way people buy and sell products and services. How simple or different it might be just grabbing that cup of coffee at Starbucks. Cryptocurrency is clearly, clearly going to continue to have an impact, so it’s important to understand, “Hey, what’s it all about?”

Heather: So, what’s the story behind Cryptogic? Tell me a little bit about your mission, the inspiration behind it?

Scott: Yeah, so, as you said at the top, Cryptogic is a multi-platform financial media brand. So, multi-platform, we’re on YouTube, we’re on all of the podcast platforms of choice. We have articles on our website, so we’re really hitting all of the content areas that you might want to hit. And our goal is pretty simple. We want to help investors make more intelligent decisions with their investments in crypto, NFTs, and blockchain technologies. Kind of going back to what I was just saying, how soon is it going to be when your grandmother’s financial advisor says, “Have you considered cryptocurrency as part of your portfolio?” And we want investors to be armed with the knowledge to make the best decisions that they can possibly make. And so, we really want to bring that together, because the thing with cryptocurrency is because it is so new, and then there’s a lot of hype cycles and all of that, there’s a lot of maybe not as sophisticated information out there. There’s maybe information that’s overly technical. There’s maybe information that’s flat out wrong. And if you’re going into something that’s changing all the time, which cryptocurrency absolutely is, each day starts, it’s going to be different than it was when you ended the day. It’s moving that fast. Well, being able to sort all that out is critical, and especially when we’re talking about investors and…

Heather: Right.

Scott: …really, you know, building wealth for retirement, or whatever their goals are. So that’s really what Cryptogic is all about, and I founded it with my partner Andy Hagans, who has a lot of experience with finance and investing, and we’ve worked on various websites over the years together. So it really all kind of came together and was a kind of a perfect storm, so to speak.

Heather: Wonderful. So, to shift us from investing, and to talk a little bit more hyper-focused around payments, I was poking around the Cryptogic website, and one of the episodes on your website that caught my attention was one titled “Will crypto payments breakout in 2022?” So, can you give me your top takeaway from that conversation, and maybe even a prediction for the status of crypto during the remainder of this year?

Scott: Sure. So, in terms of top takeaway, I think, really, it was a matter of discussing, hey, again, that cat’s out of the bag. There is a lot more momentum than we’ve ever seen before when it comes to cryptocurrency and payments. So I think there’s been this issue with crypto, and it’s, currency is in the name, but you’re not going and buying a bunch of things with Bitcoin. That’s just not happening. So, it hasn’t lived up to that just yet, but there is so much motivation, both from huge players and small players, to get that payment side correct. And I think that we are seeing more and more of that simple pressure continuing. And I think that has implications for investors, because as you have more adoption and the like, that obviously bodes well for a specific cryptocurrency or a specific technology, or if you’re investing in a stock, the publicly traded company that has leveraged that technology or solved that problem. So I think my takeaway is, we are going to see more and more of this. And then in terms of predictions, I’m not investing advice or anything like that, but I think that, again, I go back to the big players. You’re going to see them continuing to push things forward when it comes to really uniting cryptocurrency and solving the payment side of it.

Heather: Before launching Cryptogic, you spent a number of years in merchant services and payments processing. Having such a close relationship with those merchants, what do you see will be the greatest benefit for businesses who make that moved and start accepting crypto transactions?

Scott: It’s such a great question, Heather. And it’s been sad to leave Soar Pay, because I enjoyed so much of my time there, and I had so many great conversations with merchants over the years. And Soar Pay, of course, specializes in helping high-risk or hard-to-place merchants get merchant accounts, figure out their payment stack, and really helps them have more success with their business, which can be tricky when you’re considering traditional financial institutions and maybe more complicated underwriting.

So, when you talk about crypto, I think, one, there is a huge benefit for businesses that are in that category. Because if a traditional bank or a traditional processor doesn’t necessarily want to work with that merchant, they still need to run their business, they still need to be able to accept payments. And cryptocurrency, which is outside of so many of these traditional financial institutions, can offer a bit of a lifeline there. And for some merchants who, maybe they are running a great business, but they just, they had some chargeback fraud issues, they lost the handle, and oh no, they’re on the match list, or something else has happened. Well, maybe that doesn’t mean the end for their business. Maybe there’s another option out there. And so, I think crypto can help with that. I think reaching a wider customer base… I’ve had many talks with merchants who I have to convince them of the value of accepting credit cards, as amazing as that might seem to some. But I always argue, the more ways…and of course, there’s a give and take. If you have too many options, then someone might just abandon the card or whatever. But the more ways someone can give you money for your product or service…

Heather: The better.

Scott: Exactly. And the more painless it is for them to do that, “Oh, I gotta do this. I gotta…” If it’s too painful, then that’s a whole separate issue, but the more options you have, you can reach wider customers. And I include in that also international, because historically, that’s something that’s tricky, especially for U.S.-based merchants, depending on the country or whatever it may be. So there’s another option. Hey, we’re becoming more and more global by the day, so I think that’s another piece in cryptocurrency, with its sort of borderless promise can have that.

And then lastly, I want to tread lightly here, because merchant services, delivering so much value to their customers, and I’m still biased here with Soar Pay, but there are challenges around fees. And I know that, especially for the really small merchants, that maybe their margins are pretty tight. Those fees can be really instrumental. And they can be prohibitive. I have had conversations with merchants that simply couldn’t take the credit card processing fees and still run their business. So cryptocurrency could potentially offer some alternatives for those types of merchants as well.

Heather: Great. You know, I have to admit, I was curious coming into this conversation, because I myself, I’m a bit intimidated by crypto. And I notice that I have jealousy when things seem to be wildly successful. But I also have those, like, “See? I knew it,” you know, those moments when crypto is not performing as well. So I went in and did a little digging, and I was really struck by the history of various currency adoption, just in our country alone. I mean, we’ve been through some major transitions, and some more successful than others. So, now that we’ve talked about benefits, what do you foresee being the biggest challenge for those individuals or merchants, in both adopting and also making purchases in these alternative currencies?

Scott: Sure. So, I think, right off the bat, and even years ago, I had conversations with folks in the payments world and merchant services, and the volatility, that is huge. You know, if I am paying with this cryptocurrency that at one point was worth $10, and now it’s worth $100, or now it’s worth 10 cents, that’s really tough for a merchant to say, “Well, I sold this product, and now the cryptocurrency went through the roof, so it turns out I lost.” You know, or the other way around.

Heather: Or the other way around.

Scott: Exactly. So, I think that that aspect is really tough. There’s this story that is constantly told about the first pizza that was bought with Bitcoin. And let me tell you, Heather, that pizza has become quite expensive.

Heather: What is the exact… I’ve heard this tale before, and I can’t recall the exact details. Do you know them off the top of your head?

Scott: All I know, and I’m sure you can look it up. It’s on the internet, but an individual bought a pizza from a pizza joint with one Bitcoin. And it was revolutionary at the time. It was “Hey, I used this cryptocurrency to buy a pizza.” Well, that was when Bitcoin was worth a fraction of what one Bitcoin is today. And I don’t know what Bitcoin’s…I guess I could look it up right now.

Heather: Oh, I’ve got it. Thanks to Twitter.

Scott: Oh, you got it? What’s Bitcoin’s price?

Heather: Well, it’s not Bitcoin’s price. It’s “the Bitcoin pizza.”

Scott: Oh, here we go.

Heather: According to Twitter, just 19 hours ago, the Bitcoin pizza is worth $431 million today.

Scott: There you go.

Heather: Wow.

Scott: The point is, that’s an expensive pizza. And so, that’s a challenge in terms of adoption, because when you do have this store of value for Bitcoin, it’s, “Well, I don’t want to pay for a Starbucks coffee that ended up costing me $300,000 in two years,” you know? So I think that’s a challenge. I think integration is a challenge for merchants. How do you integrate accepting crypto payments on your website? And there’s a lot of great companies that are doing work on this, but there’s still friction that can happen, and I was just speaking earlier, having too many options. And the idea of, well, maybe it’s easier for them to pay with a credit card. But now if I say, “Or you can pay with Solana or Ethereum, or Bitcoin or this or that,” and then someone gets overwhelmed, and they don’t pay with anything. So I think those are other challenges, and really just managing the technology side of it. Do you have a crypto wallet? How is your business handling that? The tax side of things, I know there’s all of that. And then there’s the regulatory frameworks, which I’m sure we’ll touch on in a bit. But the idea of KYC, know your customer, these are so critical to finance, and to payments and merchant services. And so these are all big, big challenges that will need to be solved.

Heather: Yeah. So, let’s go there. You said we’re going to touch on it in a bit. Let’s do it now. I mean, considering that there are quite a few barriers that make transactions, banking, taxes, all of that surrounding crypto, still a bit complicated, to utilize that technology, like you said, you might need a special digital wallet. You might need to be a part of a specific marketplace, or need to bank at a certain bank, so on. How do you see, if you can, right, look into the crystal ball future, how do you see this issue being addressed in such a way that greater adoption is actually possible?

Scott: I would say a few things. First, just general technological innovation. And I don’t want to get too technical here, but there’s this concept of the underlying blockchain technology is you have layer one, and then you have layer two, which is built on top of that, which allows for greater volume, greater speed, all of that. So, I don’t want to go too far down that path, but the idea of the innovation and the technological advances will help make this more possible, make greater adoption easier, so to speak, because now things, transactions are going faster, you’re lowering fees, you’re just having more options out there to really, like I said, integrate and make this possible. So, innovation.

I think, talking about the top-down approach, the idea that the big boys, the big banks, Visa, MasterCard, these folks having a vested interest will also push greater adoption forward, because they have the networks, they have the keys, they have the reach and the power and the unbelievable financial muscle. So if they’re solving it, if Visa’s on board, well, then that pushes adoption forward. And then I think that there is the regulatory side, because we have all of these consumer protections that are so critical. We talk about this in high-risk and hard-to-place businesses, but chargebacks. Yeah, they’re a challenge, and if you’re a high-risk business, you have, in general, greater chargebacks than a low-risk business.

And yeah, there’s chargeback fraud, but the chargeback system exists to protect consumers. FDIC insurance exists to protect consumers. So, you have these regulatory frameworks that need to continue to be developed to support cryptocurrency payments, to support the involvement of these big players that want to reach these markets, want to service this, but they look at the U.S. government, or the government of wherever their country is and say, “Hey, what’s the framework here? You tell me where to go. I want to work within it, and be a successful business, but you gotta give me some framework here.” And I think that there’s been this wild west approach to cryptocurrency, and, you know, there’s been some bad actors out there, you know.

Heather: But that’s with any product. That’s anything anywhere, right?

Scott: Exactly. And unfortunately, maybe that gets a little more hype, especially just given the subject of Bitcoin or whatever, it’s so big in the news. But if you have those regulatory frameworks, I think then that reduces that, and then that’s how you reach a consumer who says, “I’m not sure about this Bitcoin thing. But well, okay, it’s my bank…”

Heather: There are some protections.

Scott: “My bank just sent me a thing about this.”

Heather: And like you mentioned in that Cryptogic episode I referred to earlier, Visa, you said, has crypto-link cards now, and I believe you said something like an article you read, $2.5 billion was reported in the first quarter for those crypto-linked cards through Visa. And I think, you know, having those big players a part of that conversation is going to force the hand of that regulatory framework.

Scott: Right, because there’s so much momentum.

Heather: Absolutely.

Scott: The Senators, the Congresspeople, whatever, they’re gonna have to do something. And so, I know there’s a lot of push and pull, and some folks in the crypto world say “No regulation. Let it be Wild West,” I have always, and especially even on PayPod, taken the tact of well, some regulation is actually good. And if it’s thoughtful regulation, which there’s debate of how thoughtful can it be, but if there is thoughtful regulation, then I think that’s how you get the adoption.

Heather: Right. So, I want to get back to Cryptogic. On your website, I noticed you offer a crypto cheat sheet. So I downloaded it, and I was so grateful for the way the information was organized. And one of the items that stuck out to me was stablecoins. Can you explain what those are and how they might impact payments?

Scott: Sure. So, stablecoins are pretty straightforward. Essentially, it is a cryptocurrency whose value is pegged to the U.S. dollar. So, whereas Bitcoin right now, one Bitcoin is 40-something thousand or whatever it is, stablecoin, if it’s a stablecoin, one stablecoin of whatever it would be, if it’s USDC, is one U.S. dollar. And this can have a number of benefits, and I don’t want to dive too deep into it, but one, we were talking about the volatility. Well, this kind of reduces that volatility, in the sense that, well, it’s pegged to the U.S. dollar, so whatever the U.S. dollar is doing, that’s what this is doing. And then that can also allow a greater use in payments because you have that sort of…again, it’s in the name, stability, pegged to that cryptocurrency.

Then there’s the pushback that I know some critics might have, of well, then why even use a stablecoin? Why not just use the dollar? But in general, that’s what they’re going for, and Solana is one of the biggest cryptocurrencies out there outside of your Ethereums and your Bitcoins. And Solana just released Solana Pay, which is focusing on providing online and POS sales via, like, a software development kit for merchants, to use their network. And it really caters to dollar-based stablecoin settlements, specifically circles USDC, for both merchants and consumers. So, you have crypto companies that are saying stablecoins are the way to get into the payments ecosystem, for a number of reasons, but I would say the volatility reduction, and that stability, is really the key.

Heather: So, when you look at the future of blockchain technology and cryptocurrencies, we’re talking about this sort of, what will happen by the end of the year, and where do we see these big players sort of making an impact? But what do we think about things long-term? I mean, talk to me a little bit, like, what might the landscape look like in say, 5, 10 years?

Scott: I think you’re going to see a number of cryptocurrencies come and go. I will be shocked if Bitcoin isn’t still number one. But I think that you’re going to see these big players continue to dive into the world of crypto, and you’re going to see institutional investors and traditional financial institutions have significant crypto holdings. And then I think you’re gonna see the regulations hopefully start to catch up with the technology a little bit, and at least provide a framework or a roadmap that will help cryptocurrency continue to be mainstream and have more application when it comes to payments. And I think you’re going to see that, and I think you’re going to see some big stories. You’ll still see some horror story, some fraud, you’re going to see some country release some regulation on crypto, and markets will freak out, and you’re going to see the growing pains continue to happen.

But it’s going to be a steady, steady march to, I think in our lifetime, Heather, we’re gonna have cryptocurrency just as, maybe you’re buying your Starbucks with it, or it’s just kind of a part…it’s just in your bank account, and hey, I can use crypto, or I can use U.S. dollar, or I can use something else entirely. I think we’re going to see the continued bringing of everything together when it comes to payments, because we’re just seeing pushes for friction reduction across the board, and making it easy to make a payment, whatever currency you’re using, is really a motivation that companies, merchants, and individuals, just individual consumers, all really have.

Heather: What’s next for Cryptogic?

Scott: We are going to continue to create content. I think we’re going to be ramping up our production schedule a bit, so there’s going to be more videos. We are working on…I don’t want to spoil anything, but we’re working on some exciting…

Heather: Come on. Spoil it.

Scott: …some exciting tools, I will say, tools that could be really helpful for investors interested in cryptocurrency. So, we’re really working on a lot of things behind the scenes to, like I said, help investors be better informed, make better-informed decisions, because it’s changing all the time, and we really want to be there to say, “Hey, let me help you sort this out and help you march in the best direction for your portfolio.”

Heather: Okay. The time has come. We’re going to end with your classic segment, “Fast Five Questions.”

Scott: Oh my gosh.

Heather: Scott, are you ready?

Scott: I am ready.

Heather: What do you see in the future of cryptocurrencies short-term, say, 12 to 24 months?

Scott: We’re gonna see a lot more upheaval in markets. I don’t think that’s necessarily going away. The state of the world right now is such that you’re just going to continue to see crypto impacted in various ways.

Heather: What’s one cool piece of financial technology or payments technology you came across recently that impressed you?

Scott: Man, I always ask this one, and people really think, you know, I’m going to do the cop-out. I have been so floored with the contactless payment technology.

Heather: Same. Magic.

Scott: Because it was over, I’m traditionally, with technology, and it’s hilarious that I hosted PayPod for as long as I did. I love technology, but I’m also one of those late adopter people. Like, I am not getting the newest TV until the technology has been out for several years, you know. And I was like that with contactless, and then during the pandemic and all of this, I finally got my Apple Pay set up. And then I just started using it, and I haven’t gone back since. It’s just amazing. It’s so great to not have to take the card out, and just boop, you know. Oh, I’m at the gas station. Boop. So, yeah. That technology impresses me.

Heather: In the next five years, most people in the U.S. will make a purchase with either Bitcoin, Apple Pay or some other thing like that. Which one, which you may have just given it away, but which one, and why?

Scott: I’m going to go Apple Pay.

Heather: Yes.

Scott: Their reach is so significant. I mean, I can count on a couple fingers the people I know in my life who don’t have iPhones. So, yeah, Apple Pay.

Heather: What’s one piece of advice you have for someone considering a career working in crypto and blockchain?

Scott: Educate yourself. Study up. And find a resource, whether it’s Cryptogic or something else, that can help you stay up to date, because it is fast-moving. And if you learn something, and you’re like, “Oh, I studied that two months ago,” you’re going to be behind. And if you really want to be in the industry, you have to stay up on it. I am constantly listening to crypto podcasts, I’m reading, I’m constantly learning, and there’s things I’ll get wrong. I’m like, “Oh, I thought that was this way. Actually, it’s different now.” So, really, really stay up to date with everything you can.

Heather: Last but not least, what is the best business advice you’ve ever received, and from whom?

Scott: So, I haven’t received too, too much business advice. But I think the best advice I received is just for, as an entrepreneur, my partner, Andy, is always, always will say this, at some point, when we’re talking about the larger business, or whatever project we’re working on. I forget the exact number, but it’s, you know, well, “98% of startups fail.” And some people take that negatively, but I think that there’s a freedom in that. Because it’s, well, if it doesn’t work out, shake it off. Go start something else. And then it also informs you to both take risks and be cautious. Don’t dump all your eggs into this. Don’t think that this is the only thing that can ever be, especially when you’re talking about starting businesses. So, keep that in mind. A business that exists today that is looking amazing may not be there. You know, talk to the founder of Blockbuster, you know? And it didn’t fail, but my point is is, keep that in mind, and then I think that also gives you freedom to pivot, because if you’re doing something and it doesn’t work, don’t just keep banging your head against the wall. Realize, “Hey, 98% of startups fail, so it’s time to pivot.” Because if you keep beating your head, you may be in that 98%, and if you’re looking for, to be the success story, you gotta keep looking.

Heather: Love it. Scott, thank you so much for taking the time to chat with me today. If folks want to connect with you or learn more about Cryptogic, where should they go?

Scott: Cryptogic.com, it’s all there. You can always feel free to reach out to us. We’re on all the social media networks, and you can see me interviewing folks and talking about cryptocurrency. And Heather, thank you so much for having me on the show. And just, to the listeners out there, it’s been such a pleasure hosting PayPod. I just the other day just published episode 215, and kind of tipped my cap, and it’s just been an amazing journey. And Heather, I know you’re gonna continue to have great conversations, and continue the show on, and I’m looking forward to listening and seeing the conversations that are coming up.

Heather: I hope I can do you proud. Thanks, Scott.

Scott: Thanks, Heather.

Heather: If you enjoyed this episode and want to hear more, head on over to soarpay.com/podcast to subscribe on your podcast listening platform of choice. That’s soarpay.com/podcast.

Industry Spotlight

Cryptogic

Cryptogic was founded in 2021 by Andy and Scott. Both were passionate about crypto investing, but were frustrated that the information available online was often either un-serious in nature, or was oriented towards a short-term investment time horizon.

As the two men were veterans of financial media, they decided to launch their own web show and e-newsletter in December of 2021. In less than a month, Cryptogic amassed over 1,000 subscribers, and a community was born.