What Is PumaPay?

PumaPay is a blockchain-based, open-source billing protocol intended to make crypto payments flexible, fast, and straightforward. The project enables merchants to accept crypto payments as easily as traditional methods. Because PumaPay was developed around SDK and API, merchants can fully customize the ecosystem to their needs – for example, integrate credit, product delivery, or insurance.

Early PumaPay adopters were rewarded with PumaPay (PMA) tokens. PMA is an ERC-20 token functioning within the Ethereum system The token acts as a facilitator of the PullPayment Protocol, which enables merchants to “pull” funds from the client’s wallet, complying with predefined terms. This mechanism is the opposite of traditional push payments.

Dozens of companies have already implemented PMA as a payment tool, including renowned names like Fashion TV, ImLive, and Backpack. Merchants using PumaPay become a part of the PumaPay Pride, a community connecting all adopters of the technology.

What Is PumaPay: Quick Facts

An open-source DeFi payment system aiming to streamline crypto payments, making them an ordinary part of our daily lives.

A billing solution that reduces transaction fees associated with third-party services and gives users full control over their funds.

A comprehensive, flexible, customizable payment solution for businesses.

An ERC-20 token that facilitates the PullPayment Protocol.

How PumaPay Works

To fully comprehend what PumaPay is and how does PumaPay work, we must shine some light on the PullPayment Protocol, PumaPay Pride, and the DeFi concept.

DeFi System

PumaPay is a DeFi payment solution. In a centralized financial system, a bank facilitates fund movement and earns money by collecting fees for provided services. In the DeFi model, businesses and individuals can conduct financial transfers instantly, with minimal fees, using the consensus mechanism for verification. Transactions are validated by other users of the blockchain.  

PullPayment Protocol

One cannot understand what PumaPay is without learning about the PullPayment Protocol. In the traditional payment model, the client sends or “pushes” funds to the merchant. In the PullPayment model, the merchant pulls funds from the client’s account upon authorization from their end. The system supports single and recurring payments with fixed or variable amounts and trial periods. PullPayment Protocol makes use of flexible smart contracts, which can be altered according to the client’s preferences. By reversing the conventional crypto payment model, PullPayment Protocol cuts down transaction fees and processing times.

PumaPay Pride and PumaPay Wallet

PumaPay Pride is a directory intended to promote PumaPay adoption, allowing businesses to list their services and get exposure to crypto holders, thus attracting potential customers. The company plans on integrating PumaPay Pride into the native wallet app for streamlined promotions and connection building. PumaPay Wallet enables users to store, send, receive, and exchange their favorite ERC-20 tokens using the PullPayment Protocol with card-like versatility.

Where Is PumaPay Used?

PumaPay billing solution is suitable for all peer-to-peer crypto transactions, including bill payments, legal fees, subscriptions, online shopping, or sending a monetary gift to a friend.

The primary purpose of the PMA token is to facilitate fast and inexpensive transactions within PumaPay’s ecosystem. Users can easily convert other cryptocurrencies into PMA in their PumaPay Wallet to pay for products and services. Until recently, PMA was the sole means of fund transfer through the protocol, acting as a medium between other coins.

Like any ERC-20 token, PMA can also be exchanged for other tokens through crypto marketplaces. Alternatively, holders can convert PMA into USD or another fiat currency. Some offline merchants accept PMA payments by scanning a QR code in the PumaPay mobile app.

PMA utilizes the Proof-of-Work (PoW) consensus mechanism, meaning it cannot be staked, but it can be mined. Mining is the process of recording transaction blocks into the chain via resolving complex computational puzzles. Mining requires tremendous processing powers, so miners receive rewards as a portion of transaction fees in exchange for their services. In the PoW model, miners don’t need to put down their tokens as collateral to earn more. All they need is a GPU and ASIC. Mining is a risky and occasionally fruitful process that can be done solo, in pools, or via the cloud.

PumaPay History and Founders

PumaPay was founded by Yoav Dror in 2017 and is based in Limassol, Cyprus. Its chief blockchain architect is Giorgios Kourtellos and chief technology officer Aristos Christofides. According to Yoav Dror, the project’s mission was to free small businesses from transaction costs that take a serious toll on their margins and negatively affect their performance. By modernizing payment processing systems, PumaPay promotes the use of cryptocurrency both online and offline.

PumaPay’s CEO has over 20 years of experience in online business, acting as an executive director in large-scale companies. Aristos Christofides, the CTO, has been developing professional commercial APIs for financial institutions for over 15 years. He managed teams in NFC and B2B2C payment service projects established by VISA and Mastercard. Giorgios Kourtellos, the CBA, has been a part of the IBM Client Innovation Center Bebelux team, working on projects intended to improve the finance and energy industries. PumaPay’s team is still small, counting under 11 employees.

PumaPay Tokenomics

PumaPay held an initial coin offering of 78B PMA in May 2018, raising over $117M. The ICO was limited to qualified businesses and individuals; PumaPay didn’t conduct crowd-sale. The minimum amount accepted in pre-sale was $50,000. The ICO involved the entire token supply, but the circulating supply at the moment of writing the article is roughly 26B PMA, or one-third of the total amount. The initial PMA allocation was as follows:

• 20% - sold through ICO.
• 20% - distributed between early investors and adopters.
• 35% - used for PumaPay ecosystem development.
• 15% - transferred to advisors promoting the project.
• 10% - distributed among PumaPay developers and founders.

Early adopters are prominent businesses that have committed to the PumaPay Protocol and represent a significant portion of the ecosystem’s processing.

PMA is a deflationary token because its supply is strictly limited and is not going to increase over time, which affects PMA price. Currently, 500M PMA are available for liquidity providers who can earn a fee on each transaction.

How Is PumaPay Created?

PumaPay token has a finite supply which was fully released during the 2018 ICO, so there is no way to create more PMA coins. Although PMA can be mined, miners don’t receive PMA rewards but only earn a percentage from transaction fees. According to the PumaPay whitepaper, the final and total supply of tokens was released in 2018 at the token generation event, and there will be no future addition to this amount.

PumaPay Competition and How It Fares

To determine what are PMA’s primary competitors, we must outline what PumaPay is. PumaPay is a DeFi payment solution utilizing native PMA tokens for facilitating transactions. Consequently, PumaPay competes with similar blockchain DeFi systems like Request Finance.

Request Finance, built on the Ethereum blockchain, enables users to manage their crypto funds in a non-custodial way. Freelancers and businesses can issue invoices and receive payments in over 150 cryptocurrencies and ten fiat currencies. Request Network is powered by an ERC-20 REQ token with a burning mechanism.

Both Request Finance and PumaPay are decentralized pull payment solutions with a native governing currency. However, distinctions outweigh the similarities. PumaPay is still a relatively small business with roughly 70 partners, many of which operate within the adult entertainment and high-risk industries. In contrast, Request has over 2,000 clients primarily from the blockchain niche, including The Sandbox and Paraswap.

PumaPay has a native wallet, whereas Request must be integrated with a third-party wallet. PumaPay supports more advanced models like pay-per-use and pay-per-time payments and is better suitable for fund transfers between individuals. Request targets medium to large-scale businesses, offering advanced invoicing options but higher transaction fees. Because of these fundamental distinctions in the target audience and supported payment options, PumaPay and Request cannot be perceived as direct competitors. PumaPay takes up a rather unique niche within the industry. 

REQ token utilizes the Proof-of-Stake mechanism, so it can be staked but not mined. With roughly 729M tokens in circulating supply, its trading volume is significantly higher than PMA’s. 

PumaPay Investors and Partners

PumaPay raised over $117M in the sole funding round in May 2018 by selling 78B PMA tokens. No information about other investment rounds is available to the general public. Later that year, the company signed up with over 40 partners with $10B worth of annual transactions. PumaPay’s most prominent partners include Alignment, Hexa, Vivid TV, Fashion TV, CC Bill, and ImLive. Many PumaPay partners are high-risk or operate within the adult entertainment industry, but the solution is available for any merchant.

PumaPay Strengths, Weaknesses, Opportunities, and Threats

Strengths

PumaPay’s greatest strength is low transaction costs limited to gas fees, making it appealing to small and medium-scale businesses. A deflationary model with prior token allocation protects the PMA price from manipulation, maintaining its value relatively stable. A unique thing about PumaPay is its convenience and native wallet, attracting users with little to no experience in crypto payments. Although the system is straightforward, it supports advanced billing methods like subscriptions and top-ups. 

Weaknesses

At the moment, questionable positioning is the primary weakness of PumaPay. PumaPay’s user base consisting primarily of adult entertainment companies, can raise concerns among some leads, preventing them from becoming paying users. The slowly expanding compared to competitors like Request client base supports this argument.

Opportunities

PumaPay is getting ready for expansion by migrating from Ethereum to Binance Smart Chain (BSC) blockchain, which is 100x faster and 50x cheaper than the current solution. Upon migration, PumaPay aims to become the pioneer among DeFi systems facilitating recurring payments on BSC. This change will also allow merchants and clients to pay in various tokens.

Threats

Although decentralization provides users with many opportunities, it also presents several risks. For example, PumaPay is currently dealing with the scalability problem by moving to the BCS protocol, but it cannot eliminate threats associated with smart contract vulnerability to cyber criminals.

PumaPay Roadmap

According to PumaPay’s roadmap, the next project development stage is full migration from Ethereum to Binance Smart Chain for better scalability, lower gas fees, and support for additional crypto tokens by the PullPayment Protocol. Additionally, the company plans to launch new liquidity pools and introduce a web-based wallet.

PumaPay Updates, Highlights, and News

In May 2022, PumaPay announced that PumaPay Bridge is now live. The bridge is an integral component of PumaPay’s migration from Ethereum to the Binance Smart Chain blockchain, enabling seamless exchange between ERC-20 and ERC-677 PMA tokens. ERC-677 PMA tokens were introduced as part of PumaPay’s new ecosystem. Currently, the bridge only allows charging a variable fee, but the company is working on implementing a fixed fee to cover the gas costs solely.

PumaPay V3.0 Alpha was released on May 19, 2022, for testing. However, the system is still in the works, so we can expect PumaPay to make multiple updates until the final version is complete. The V3.0 entails the migration from Ethereum to Binance Smart Chain, new browser blockchain wallet integrations, and multiple token support. Before the migration, users were required to hold a balance of PMA for transfers. Moreover, with the new update, merchants and users are agnostic of another party’s currency choice as PMA remains the sole means of value transfer through the PullPayment Protocol.

Why Does PumaPay Migrate from Ethereum to BSC?

The upgrade to PumaPay V3.0 involves monumental changes, primarily migration from Ethereum to Binance Smart Chain (BSC) blockchain. If you’re wondering how does PumaPay work after the shift, learn about the differences between these blockchain protocols.

Centralization

The Ethereum blockchain has more validators processing transactions, meaning it’s less centralized than BSC. BSC utilizes the Proof-of-Authority mechanism, which requires under 21 validators, allowing faster processing times. The list of validators is comprised of the most active Binance BNB stakers. In contrast, Ethereum has countless miners running the Proof-of-Work mechanism to add transaction blocks into the chain. As a result, BSC has significantly stricter requirements for becoming a validator.

Processing Times

The more centralized a blockchain, the faster it processes transactions as they need to be validated by fewer users. Ethereum block times typically range from 2 to 14 seconds and BSC times average out at 3 seconds.

Transaction Fees

The primary advantage of BSC is reduced gas fees resulting from its consensus mechanism. BSC Proof-of-Authority model is fast and doesn’t require the computational powers of Ethereum. However, Ethereum is currently moving to a Proof-of-Stake mechanism intended to reduce gas fees drastically. After the migration, PumaPay will only collect fees to cover validator gas costs.

Which Challenges Does the Migration Present to PumaPay?

According to PumaPay’s calculations, the upgrade from Ethereum to BCS will allow for 100x faster and 50x cheaper payments. However, such major changes rarely come without pitfalls. PumaPay had to incorporate a new ERC-677 PMA token that will coexist with ERC-20 tokens within its ecosystem. The total amount of PMA tokens has remained unchanged. And of course, getting people to migrate to a new system is not easy either.

Additionally, the company had to develop a bi-directional bridge to enable transactions between the networks. To interact with the PumaPay Bridge, users must set up a Metamask wallet. The transfer direction is determined by the network selected on the Metamask interface. The transaction fee depends on the transfer direction: Ethereum to BSC transfers have a 0.1% fee and BSC to Ethereum 1% fee.

Where To Buy PumaPay?

Now that you know what PumaPay is, you may wonder how to buy it. PMA isn’t currently listed on major crypto exchanges. However, you can purchase a stablecoin via OKX and exchange it for PMA via the native app. OKX made the process straightforward by providing you with several payment options. You can buy crypto on OKX with a credit card or trade it for other tokens.  

How To Store PumaPay?

The best place to store PMA is PumaPay’s native or supported wallets like Metamask. When choosing the wallet, ensure it supports ERC-20 and ERC-677 tokens. Although PumaPay announced that it would no longer support the Mobile Wallet App on iOS, the company didn’t comment on the Android app, and it appears to continue functioning. PumaPay wallet is currently the only solution supporting top-ups, subscriptions, and other advanced crypto payment models. In addition, you can send, receive, and store your funds in multiple cryptocurrencies.

FAQ 

Can I Use PumaPay as an Individual To Make Payments to Friends and Family?

PumaPay is a versatile DeFi system that primarily targets businesses but is also suitable for one-off peer-to-peer crypto payments. Although PumaPay supports complex payment models, users can send regular single payments to other individuals. Same as all PumaPay transactions, single payments utilize the PullPayment Protocol.  

Which Payment Models Does PumaPay Support?

PumaPay supports a range of transaction models, including recurring payments based on time, offline payments, instant payments-per-use, payments with a variable amount, restricted payments, and shared payments. Recurring payments with a fixed amount are best suitable for subscriptions, whereas variable amount payments are great for the likes of utility bills. With restricted payments, parents can oversee their children's wallet activity and authorize transactions. Finally, shared payments are perfect for disbursing commissions.

What Is PullPayment Protocol?

PullPayment Protocol is reversed payment mechanism where funds can be taken from the client’s account without approval for every transaction. The classic example of push payment is when you hand cash to the cashier, and they accept it. In other words, you must take action to initiate the transaction. With pull payments, the payee is in control of transaction execution.

Which Currencies Does the PumaPay Wallet Support?

PumaPay supports all ERC-20 tokens, including ETH, BTC, LTC, and BNB. Since the migration from Ethereum to the BCS blockchain, PumaPay allows sending and receiving payments directly in your preferred currency rather than in PMA. With PumaPay V3.0, users can nominate the price in any currency and accept payments in tokens chosen by their clients.

Can You Stake PMA?

PMA utilizes the Proof-of-Work mechanism, so it cannot be staked. In the Proof-of-Stake model, validators put their funds down as collateral in exchange for rewards. In the Proof-of-Work model, validators need tremendous computational powers to resolve complex puzzles but don’t have to lock their tokens. 

What Is Unique About PumaPay?

PumaPay isn’t the first blockchain-based DeFi payment solution. The unique thing about PumaPay is its subscription, top-up, and recurring payment support. It enables entities with non-traditional business models to accept crypto payments without requesting authorization from the client’s end for each transaction. 

How Do PumaPay Liquidity Pools Work?

To fully comprehend what is PumaPay liquidity pool, we must outline the concept fundamentals. A liquidity pool is a pile of crypto assets locked in a smart contract to allow users to swap currencies. As PumaPay is integrating more currencies into its system and plans on facilitating even higher volumes of automatic payments, the importance of liquidity pools grows. Consequently, it increases the need for liquidity providers willing to earn a percentage of transaction fees.  

Why Do High-Risk Merchants Choose PumaPay?

High-risk merchants choose PumaPay and similar DeFi solutions due to a lack of governance. In the traditional financial model, an institution controls an entity’s funds and can refuse a transaction or freeze it if it deems it suspicious. In the DeFi model, no one is in control over the payments but the payor.