This interview is part of our new Blockchain For Payments series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and payments.
In this interview we speak with Nimrod Lehavi, CEO and co founder of Simplex, to understand how his company is filling a needed niche – ensuring a fraudless crypto-financial environment.
1. What’s the story behind Simplex? Why and how did you begin?
NL: My background is software development. In 2012, I was managing my software boutique. I had been building projects for customers for 15 years. Although it was a great experience, at some point it felt like I was not making enough impact. One day I bumped into the bitcoin whitepaper, read it and was smitten.
I think most of the people who entered the ecosystem in those years were more about the ideas, the technology and the potential in truly changing financial systems – similarly to how VOIP changed the telephony industry. Naturally, I tried to buy Bitcoin but any option I found was only via wiring money to a bank account (unsafe) or meeting someone for a cash swap (shady) so it took me months to actually buy some.
I had a handful of ideas of what it could and should be done in the industry, what it would be the most beneficial thing to do and also what it would be a competitive advantage to run out of israel. I chose what it's still the core of our company – enabling people to buy crypto with their credit cards with full protection against fraud to the seller.
I started working on it and in late 2013 managed to persuade my co founders to leave PayPal Israel to join me as co founders.
We officially opened the company in 2014 and we started operating in December that year. Later in 2017, we received our first financial EU license and in 2019, our EMI financial service license
2. Please describe your use case and how Simplex uses blockchain:
NL: The inherent issue with credit card payments is that the end user is the real asset. So if a client claims he didn't perform a certain purchase – he's (in most) protected by the credit card company, and the merchant isn't.
If there was a purchase made with my credit card at a crypto exchange and the card holder claims it wasn't him – in most regular cases, the seller will be denied the funds by the credit card company, and the user will not be charged. This, as you can imagine, attracts a tremendous amount and variety of fraud attempts and attack vectors, and it was a good reason that made impossible to perform these transactions in the past.
Simplex is handling each transaction from start to end, and guaranteeing the seller his funds, so if a transaction ends up in a chargeback, he's still getting paid by Simplex. Removing the risk for merchants actually opens up the market and makes credit cards a valid option. Being a very popular one in general, we're very proud of enabling millions of dollars a day in crypto purchases.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
NL: We're proud to be the leading provider, and have most of the ecosystem working with Simplex. Binance, OKx, Houbi, Poloniex, HTC, Xapo, Changelly, BRD, trustwallet, Bitcoin.com, btc.com and many many others
To all our partners, we're enabling global credit and debit card purchases for their users. We've recently started enabling selling crypto and cashing out to your regular credit and debit card, and we'll be adding wire transfers, SEPA and ACH soon as well with much lower fees
4. What other blockchain use cases in payments are you excited about?
NL: Since I'm a believer in multiple currencies ecosystem. I think that at the end every large operator or network will have their own currency / token and they will be interchanged through decentralized exchanges with great speed and efficiency. I think one of the most interesting developments is to see how the Telegram ecosystem evolves, the Samsung one, Kakao, and at some point Libra.
It could be an amazing step towards huge improvements in the financial systems globally and a better, more fair, transparent and more efficient and trustworthy economy
5. Where will Simplex be in 5 years?
NL: In 5 years from now, Simplex will be catering all of the fiat side of the ecosystem.