People in the Global South are often subject to terrible fluctuations in their currencies, as well as hyperinflation. At the same time, many are unbanked, but still able to access a crypto wallet. A way for these populations to access more stable currencies would be by accessing Stable Coins which are pegged to the US dollar – but most crypto platforms are less thank user-friendly.
This is the thinking behind Cheq, a fintech startup that enables cryptocurrency payments in a user-friendly app. It’s now raised a $2 million pre-seed round led by London’s Connect Ventures, alongside Semantic Ventures, firstminute Capital, and 30 angels including former leadership from Monzo, Revolut, and Tide.
Cheq hopes now to establish itself as a viable option for taking payment with stablecoins that are pegged to the US dollar. And because it uses stable coins it also avoids intermediary fees and many approval requirements.
Chris Butcher (no relation) was formerly co-founder and CTO of Portify, but also founded a side-project called Token Alerts in Latin America. From this experience, he learned that stablecoins were popular in the region as a way of staving off hyperinflation.
Cheq says users connect a crypto wallet to the platform and then use the app as they would a modern neobank. Cheq can create payment links so customers can pay with crypto via these links. Cheq then collects names and addresses from the buyer and perform follow-on actions with other services for merchants to fulfil orders.
Cheq is also aimed at SaaS companies wanting to add a crypto option alongside the existing fiat payment processor, such as events. It can be used with a wallet that supports payments on the Ethereum, Binance Smart Chain or Polygon chains. But does not offer Bitcoin as this is not pegged to the dollar, obviously.
In a statement, Butcher said: “While cryptocurrency has its diehard fans, many people still find them complex and lacking tangible value in a day-to-day setting. We believe a crypto wallet has the potential to be an amazing business bank account, and stablecoins provide the means to trade across borders without the costs typical of card payments.”
Rory Stirling, General Partner at Connect Ventures commented: “Chris and his team have a unique perspective on building a web3 company, insisting that the mass market wants a clean and easy product that removes the complexity and confusion typical of the sector. I’ve been blown away by how quickly they’ve executed. In December 2021 Chris was pitching me an idea. By March they had built a stunning product and were processing tens of thousands of dollars every week.”
Cheq has competitors. Platforms like Coinbase commerce or Binance pay are creating similar offerings, but still run a fairly crypto-savvy interface.