Safein- the great e-commerce
The Safein platform is uniquely beneficial for both users and merchants. First, users will undoubtedly appreciate the end of repeat registrations, KYCs and password recoveries, replaced by instant access granted by our multi-factor authentication solution. Furthermore, not having redundant accounts provides greater security and data protection, both of which are valuable to any consumer. Finally, the ability to easily conduct payments in any chosen medium has long been desired by the market - Safein will also satisfy this need to allow a fully seamless payment experience for all its users and merchants.
Merchants also benefit with our platform as Safein significantly reduces merchant costs for user onboarding and verification. Furthermore, Safein reduces transaction fees and can remove the problem of having to manage lost passwords for the customer support. Merchants also get easy access to crypto payments at one of the lowest commission fees in the market with a completely free identity verification tool. Moreover, merchants who possess Safein tokens in their wallet will be able to process payments with no commission. Our platform will also help them increase trust and user onversion rates as well as protect them from accidental breaches of increasingly complex data protection regulations and processes.
building a universal gateway for e-commerce requires scale and wide product adoption by the target audiences. Accordingly, our growth strategy is primarily focused on rapid scaling of our user base and initially introducing the platform to the communities our team has best access to - gaming and crypto-assets. In order to achieve these goals, we will employ similar incentivization tactics as used by PayPal or Airbnb and reward the first adopters of our platform with Safein tokens. Across 3 market verticals we will enter, total number of merchants and user wallets by end of 36th month in operation are estimated to reach 3,600 and 1,7 million, respectively. Cumulative monthly growth rate in value of transactions is estimated to be 18-20% and net commission revenue will grow in line. Operational breakeven is expected to be achieved in approx. 20 months after launch of revenue generating activities.
Work on our vision is already in progress and users will soon be able to try out a fully functional MVP on our website and sites of our partnering websites. Beyond further development of the platform itself, our team is currently working hard on expanding the company’s network of partners, names of which will be announced in due course. The process of obtaining an electronic money license in the EU is also in progress.
The Safein ICO starts on 25th of April 2018. At this time 30% of the Safein tokens will be issued with the remaining pool will be used for user and merchant incentivization, remuneration and further development of the platform.
Rapid growth of e-commerce remains unstoppable. However, the industry itself is still ripefor improvements as growing concerns mount over data protection, cybersecurity, money laundering and monopolization of numerous sectors. Moreover, shopping online is not only troublesome, it’s also redundantly complicated. Think, for example, of all the repeat registrations, verifications and password recoveries trailing the daily online customer experience.
The Safein believe that outdated technology is to blame for almost all of these problems. Accordingly, we think it’s about time to fix this by embracing a modern way of managing your online identity and the shopping experience.
A.POOR USER EXPERIENCE – POOR E-COMMERCE
One could argue that the internet was designed around the groundbreaking discovery of public database – the website – thus making it the very core of Web 1.0 but subsequently leaving user engagement somewhat secondary. However, as the internet evolved and grew in popularity, personalized online user interaction standards emerged as standard for the protocol. Hence keeping track of “who’s who” became crucial for the online community.
Unfortunately, the internet was created without an identity layer, thus online merchants, forums and other stakeholders had to develop this layer from scratch. Instead of joining forces for this endeavor, each website decided to solve this problem internally which consequently gave rise to the well-known horror of “signing up” and creating different accounts for every single website we visit.
It’s worth noting that, in its infancy, “signing up” wasn’t really that bad. First, there were only so many websites that asked us to register, and setting up your user account brought the joy of creation to many. However, this perception swiftly changed once our modern lives became dependent on the internet and shopping online turned mainstream. Naturally, with ever-growing Web 2.0 interactions still relying on stagnant user onboarding procedures, we had to “sign up” and “sign in” more and more. Subsequently, irritation with providing the same data, already submitted numerous times before, grew to the point where at least 22% of current online shoppers simply choose to abandon their carts if completing the purchase required creation of a new user account
Anti-Money Laundering (AML) and general Know Your Customer (KYC) procedures did not take long to become ubiquitous. In turn, this made customer onboarding even more problematic as using financial or other regulated services online in most cases required submitting personal documents for manual review and waiting for them to be verified. Since we live in the age where time is perceived as precious commodity, this delay between account creation and verification (sometime lasting more than a month) naturally persuades many potential customers to stick with the regulated service provider (e.g. inferior bank) they already work with or forego buying something online altogether. All this just to avoid the hassle of printing, signing, scanning and submitting their passports or utility bills once again.
And it’s no better from the merchant perspective. Market research shows that onboarding new users can cost an online service provider up to 20 USD per new customer with a total annual bill for identity assurance exceeding 3,5 billion EUR in the UK alone. Worse, another fortune is required to properly collect, manage and store the personal data collected.
Small armies of KYC specialists need to be available in each company so that legal requirements are not breached and exorbitant fines—like the one received by Paddy Power for failure to verify just 3 customers—can be avoided. Moreover, no matter how good, KYC departments usually fail to deliver their service within 24 hours. Naturally, this deters potential customers who need your services promptly (e.g., access to financial markets) or not at all (think of buying stocks on the last hours before quarterly results for example).
Finally, multiple accounts and different passwords are not easy to manage for either users or merchants. This is perfectly illustrated by the fact that 30-40% of support center call volume is related to something as stupid as password and account recovery.
This is the magnitude of user time and merchant resourc- es that could easily be saved for better purposes with an advanced Identity 2.0 solution. Additionally, wide- spread adoption of Identity 2.0 could also diminish the above-mentioned obstacles to fair competition, enable greater consumer mobility, maximize product utility, and supercharge the total growth of e-commerce. Lastly, we live in the age where generations Y and Z tend to reject walls on the internet, and jump between the growing num- ber of platforms with no sentimental attachment. In this new reality, the old way does not work anymore.
B. LACK OF TRANSPARENCY IN HOW USER DATA IS MANAGED
The need for online merchants to identify their customers through “login” functionality rose from shortcomings of the internet itself and was quite justifiable at the dawn of e-com- merce. However, as the World Wide Web evolved, this feature remained unchanged. Two factors are to blame for this shortcoming. First, moving from site-centered Identity 1.0 to user-centered Identity 2.0 required significant investment by site owners, and broad con- sensus of the online community, neither of which is easy to attain. Second, businesses discovered over time that user registration wasn’t just draining their resources, it was also giving them precious piles of data on users’ geography, demography, contacts, and pref- erences for further sales. Naturally, it didn’t take long for businesses to discover that such databases could easily be packaged and sold to the highest bidder, enabling the digital advertising industry that’s currently worth more than 220 billion USD8 a year.
In this environment, merchants became eager to mine more and more data on their site users, thus giving rise to a society where 76% of all online users claim that information requested of them during the registration procedure is intrusive and unnecessary
Furthermore, since extensive profiling was not really welcomed by the community, almost 60% of internet dwellers started retaliating with increasing numbers of fake email address- es and other false data being submitted during registration10. To date, this problem has got- ten so big that, on average, 10% of any online community user database is likely to be false
And that’s completely understandable, as most of us try to avoid unwelcome data mining or spamming operations. Excessive and intrusive questioning also impacts commerce. Many survey respondents list privacy and security issues among the key factors of shopping cart abandonment. Moreover, we normally treasure our right to privacy as a basic human right that we expect to be protected. Governments do try to do this, and data protection is no longer at the sidelines of political agendas (think GDPR for example). But forcing e-com- merce incumbents to stop collecting and storing valuable data they don’t really need is no easy feat, and legal enforcement is struggling to overcome the “Agree with everything” checkbox we ticked during the last registration. Accordingly, instead of waiting for the world to fix itself, Identity 2.0 could step up and lead the way.
A new era of online identity recognition could not only mean increased trust in e-commerce through greater protection and control of our personal data. It could also enable the online shopper to do something our physical selves take for grantedie. remain anonymous at the counter. This does not mean that we imagine a world with no age or country restrictions these checks are there for a reason and shouldn’t be removed without proper debate. However, just like a vendor not even looking at you when you buy something simple and only inspecting your ID when you ask for some liquor or medicine at a physical store, online merchants do not need to know your name, age, gender or email. They just need to know that you qualify for the purchase you came for. All this can be done without separate accounts, spam emails and tiresome verifications. We just need to embrace the change that’s long overdue.
C. THREATS TO ONLINE SECURITY
The rise of online shopping, digital marketing and loyalty schemes resulted in merchants storing more and more consumer data that is of value to cyber criminals. Not surprisingly, breaches involving loss of client data from hacking or online leakage doubled in one year from 2015/16 to 2016/1715. Accordingly, we’re currently at a place where 60% of consumers believe online merchants aren’t doing enough to protect their personal information. 34% of respondents even go as far as to avoid buying online altogether.
This fear is not without merit. In 2016 we saw 1.1 billion identities exposed in data breaches and 2017 hasn’t been any betterEquifax alone exposed 143 million accounts in the first half of the year. And we should not forget that this is super sensitive per- sonal data that’s likely to remain accessible to fraudsters indefinitely. Naturally, this is frightening.
In light of all these problems, it is no wonder that over 69% of consumers look for websites displaying trust symbols provided by Bizrate, Customer Certified, TRUST and others. Properly posting these symbols on your website is neither easy, nor cheap. Accordingly, they’re usually not present on new and exciting websites such as startups struggling to raise capital, deliver goods and further develop products. Such merchants need to prioritize cy- ber security and data protection, but the costs tend to prevent this.
Established merchants, however, do have the resources to improve security, but they fall victim to fraudsters with talent and determination to steal the valuable treasure chests of merchant data. Fewer and fewer merchants have the resources and capability to withstand the constant cyberattack, and that results in fewer and fewer trusted merchants online. Over time, consumers opt for these few trusted merchants, but using just a few sites for everything is far from ideal. Competition 101 tells us that rising barriers for entry and effective discrimination of startups inevitably leads to fewer choices, slower innovation, oligopolies and, ultimately, higher prices. None of this is good for the consumer.
Distortions to competition, e-commerce and privacy brought about by the rise of cyber- crime are too great to ignore. Something needs to be done. Therefore, we believe that Identity 2.0 could be a huge step in the right direction.
D. BARRIERS FOR REGULATED BUSINESSES
Obviously, having your business online does not shield you from most of the requirements imposed on brick & mortar merchants. Regulations intended for consumer or data protec- tion as well as tax collection work for the cyber and real worlds almost identically. However, not all commerce is the same and some of it is subject to extra scrutiny. We speak here of licensed businesses such as pharmacies, financial brokers, beverage stores, casinos, etc. These are the businesses that, if run badly, could hurt the society we live in. Hence, they are required to adhere to higher standards in order to protect both consumers and com- munities.
Probably the most popular way to protect the young is ban them from using some goods or services until their adulthood at the age of 16-18 or 21. However, whereas in the real world establishing your age isn’t that hard, and being asked for ID in some bar at the age of 40 is almost unheard of, buying liquor online is a completely different story. Online merchants are unable to actually see their customers and judge their age on appearance. Accordingly, they need to solve this problem in some other way. And the way chosen by most is online ID verification.
This verification is quite unsecure, costly and for the user, irritating – especially when you have to do this repeatedly. Moreover, with numerous different IDs across the globe, popu- lations with no IDs and stolen IDs bought for a few dollars, one should wonder, how capable are the merchants of really establishing true identity and age of their shoppers? And, how much do the customer support armies employed for this task cost them?
Even if your true identity online can be discerned, this is usually not enough. Although in- ternet has no borders, domiciles of its users do. Accordingly, applicable laws differ for users from the Netherlands and India. To put it simply, whereas something is legal for a Dutch of , the same thing can still be banned for an Indian of 70. The same can be said about taxes VAT in Denmark is 25 percent whereas in Malta it’s only. Online merchants need to know and account this properly, but we believe that few merchants do. With the wide use of VPNs online, users tend to “cherry pick” the jurisdictions that suit them best or have the lowest taxes. Of course, consumers will always take the path of least resistance, and that’s understandable because it’s really the merchant that’s going to be blamed, fined and prosecuted if something goes wrong. Nobody should want this.
E. ABSENCE OF A UNIVERSAL E-WALLET
Whereas the inefficiencies of “signing up” and “signing in” are widely debated, we believe that this debate is still missing one core issue; the outdated way we pay for the goods or services acquired online. Traditionally there’s actually more than one “signing in” in the on line process of buying. First, you sign in to the store it self and then you do it again to access your payment provider. Naturally, this means two accounts and two passwords. Surely that redundancy could be optimized.
While the above scenario is already far from ideal, we believe that the most common alternative is not actually better. We mean here regulated merchants like currency exchanges, betting houses, etc., all of which usually require users to deposit funds upfront to get the services they came for. This is flawed in the way that it makes customers wait from 3 to 72 hours before being served (by which time we might lose our interest altogether), with less established businesses it can be many times worse.
Many of us at least once felt this fear of transferring a balance to some new exchange or online casino where we weren’t actually sure that the transferred amount would be added to our balance. This is quite common; the market is rich with stories of fraudulent websites and disappearing accounts. Even if your balance gets added to your account, you cannot yet be sure that you’ll be able to withdraw it later.
Due to the above problems, we believe that a significant part of e-commerce is lost on the part of new entrants. Commerce needs trust, and while it’s easy to establish it with simply opening your wallet in the physical world, online shopping is different. Accordingly, forgoing the old-fashioned ways and conducting all payments from a single account could greatly benefit e-commerce, development and competition alike.
Finally, with regard to the use of a cryptocurrency and blockchain systems, we feel the technology is strongly applicable, but needs enhanced stability to better serve ecommerce. The Bitcoin idea was born almost 10 years ago. The whole cryptocurrency market is worth well over $500bn and crypto payments are still not widely used. The general reasons for that is volatility of cryptocurrency rates, which frightens merchants, and limits blockchain technology. The world needs a onestop payment solution for both, traditional payment methods and cryptocurrencies, with ability to instantly convert payments to the currency that merchant feels safe with.
A. COMBINING THE BEST OF TWO WORLDS
Data shows that modern internet users have a strong preference for single sign-on solutions like Facebook identity or Google accounts. In fact, some 88% of all online customers use these gateways from time to time to sign into websites they visit. On the other hand, neither Facebook nor Google can grant an account that’s verified or capable of payments, which significantly limits user convenience and growth. Accordingly, there’s a huge market that’s ripe for the taking.
In view of all this, as well as the cyber world problems mentioned in previous sections, the Safein team has set out to create a single sign-on and payment solution that can be used universally on all websites. By doing so we will eradicate the traditional way of creating accounts on numerous websites we shop on, and we will enable the world to adopt Identity. This profound leap in technology can easily eliminate the inefficiencies of never-ending KYC procedures and finally grant the community a default customer gateway for all e-commerce activities.
Equally important is our ambition to finally enable our customers to properly secure the personal data used for e-commerce, and shop anonymously wherever possible. We strongly believe that instant access to payment for services, with no delays for KYCs or deposit transfers, will undoubtedly lead to greater competition, increased conversion rates and booming e-commerce. In tandem, merchants will benefit from a significant cut in their cost of regulatory compliance, data protection, KYC and user onboarding, cyber security, as well as reduction in need for significant portion of customer support handling trivial matters like password recovery.
Here’s how we will achieve our goals
B. SAFEIN ARCHITECTURE
Safein will allow users to store their identity, as well as crypto and fiat currencies in accounts opened on our platform. Safein will go into various business areas where combination of possessing all of the above gives benefit to its users online and offline. The main priority of Safein is to eliminate redundant registrations and KYC procedures.
C. DIGITAL WALLET AND PAYMENTS
Safein is planning to be a fully licenced EU electronic money institution with the ability to receive and process payments in full compliance with the law. Users will be able to hold their crypto and fiat currency in a single wallet as well as convert them from one to another. Major crypto currencies, including Bitcoin, Ethereum ERC20 tokens, and other popular cryptocurrencies will be supported. Currency exchange functionality, for crypto and fiat, will be standard for all currencies with 0.5% markup from the best available rate in the market. Having an EU electronic money institution (EMI) licence will allow Safein to connect to the SEPA network and give IBAN codes to all of our users. Having that available, Safein will be one step closer to becoming a standard instrument for daily use. Additionally, Safein plans to have payment cards linked to users’ accounts, so users will be able to use their Safein accounts daily both online and offline.
Standard Safein e-commerce commission for merchants will be 1%. Merchants who possess Safein tokens will be able to receive part of their payments free of any commission, and users who pay with Safein tokens will receive 0.25% cashback on every purchase. More on these Safein token benefits can be found in the “Token model” Section.
D. SINGLE SIGN-ON
Safein provides a unique solution for both users and merchants. Users will be able to login into websites directly with no registrations. The Safein account will at the same time provide merchants with the information necessary for client acceptance and service provision. For example, if a user is signing in to a forum, the forum usually only needs to know user’s display name or some unique identifier enabling it to separate the user from others. In this case, Safein would not disclose data like user’s full name, address, etc. Instead, it will only provide the forum with the required username. On the other hand, should the same user be buying a physical book, additionally, the merchant would be provided with user’s full name and address for shipping. Despite this, the user will have full control of his data at all times, always seeing what information is being requested by the merchant and giving a clear consent to such transfer up front.
Before integrating Safein, a merchant will have to choose what user data is essential and must be acquired, and what data is optional and could be omitted. Our team will monitor this process and advise merchants on whether their choices on data to be collected complies with applicable data protection regimes. Moreover, the user will be able to choose whether to pass or decline passing optional data to the merchant. Safein will try to grow a generation of users who value their personal data and do not share it with everybody by default. The same applies to merchants, as we will try to do what we can, without losing our competitive advantages, to limit merchant requests for data and convince them to accept anonymous users where possible.
E. USER DATA PROTECTION
Primary focus of many online merchants is business expansion. Given limited resources available to most companies (especially the smaller ones), businesses tend to focus on core functions; areas like proper user data collection and management don’t get enough attention. This is where Safein steps in.
In particular, it’s no secret that even though many online shops conduct their business globally, most of them are not experts in different rules of data protection in every market. Many don’t even know all the details of the laws applicable in their own jurisdiction. We believe that this is one of the core reasons for excess data mining and general non-compliance with data protection legislation online.
With all this in mind, Safein’s architecture is built in a way that solves most of these problems automatically. First, as required by recent developments in the EU, our users will always be presented with a full and clear information on what personal data is being passed on to relevant websites. No such transfer shall take place without clear consent of the user. Moreover, once the user agrees to give her specific data to a merchant on the first login, the merchant will be able to access this data on our platform anytime before this relationship is terminated by the user. Accordingly, such merchant will have little reasons to store this information on his own server and thus be able to significantly decrease his and his user’s exposure to hacking operations and data theft (as well as save some expenditure related to counter measures to such threats).
We argue that such measures will not only help merchants comply with the EU General Data Protection Regulation (“GDPR”), coming into force as of 25th of May 2018, and also be beneficial for customer trust in general. As compliance with GDPR becomes increasingly important, Safein will dedicate significant resources to educating the merchants on applicable requirements and guiding them when deciding on which customer data should and should not be collected by specific merchants. In short, we’ll strive to pass only the “need to know” information to merchants and maintain our users anonymity where possible. Furthermore, the platform will also solve the problem of personal data updates with different service providers as all relevant merchants will receive information on updated addresses, surnames, etc. automatically as soon as such changes are submitted to our platform. Finally, the Safein platform will enable our users to truly exercise their rights of personal data management and terminate any previous sharing of data with specific merchant.
Even more importantly, we will also let our users to properly exercise Art. 17 of GDPR (“the right to be forgotten”) in the EU and request any merchant to delete specific user data from their archives immediately upon receipt of a relevant notice. All this shall be done without leaving the boundaries of our platform as the user will simply be required to click a couple of buttons and let our platform take care of further communication with the merchant on behalf of the user.
We believe that all the above features will be greatly beneficial for both users and merchants and should be appreciated by educated and law abiding online community in general. Moreover, as Safein will closely monitor its partnering websites and share no information with entities of uncertain reputation, our services should also help in growing trust in e-commerce thereby increasing the conversion rates.
Security must be a primary focus while managing your identity and wallet online. Safein will have a multi-factor authentication mechanism implemented from the very beginning. While integrating Safein, each merchant will be able to choose a minimum security level that he requires from its users. For example, merchants can ask that all logins to the merchant’s website and all payments must be confirmed by user on his mobile device- i.e. (i) a push notification shows up, (ii) user must identify himself via pin code or fingerprint on his mobile Safein app and (iii) approve login or purchase. User (in his panel) can also enhance general security levels for each website individually. For example, even if a specific website does not require mobile device confirmation for website login, a user can always enhance his security level by enabling that requirement himself.
With Safein, users will not only be able to fully control their logins and actions, but track and manage them as well. Users will be able to see their full activity history, including logins and payments, track their used devices, manage current active login sessions and cancel them at any time. Users will also be able to easily check which website has access to certain data. Most of the functionality related to identity management is already available in the MVP
G. KYC PROCEDURE ENGINE
Safein team is currently in talks with the world’s leading automated ID verification service provider to provide exceptionally accurate results using its AI powered document checking algorithm. Such checks, where users will only need to scan their IDs with their cameras and take selfies, will be sufficient for most uses. Some advanced verifications, where users need to comply with very specific regulations (for example, some cryptocurrency exchanges), will be done manually by the Safein team. It could take up to few minutes, but compared to current waiting periods of weeks for some exchanges, it is still a radical improvement, especially keeping in mind that users will only need to do it once.
H. BUYER PROTECTION MECHANISM
Most of the merchants are well aware of the issues that arise from credit card chargebacks and fraud. One of the biggest advantages of crypto payments is that they are irreversible. In standard e-commerce the merchant is considered to be a more trusted party, hence the buyer needs to send the payment first. Chargeback and dispute resolution mechanisms were invented to help the buyers recover funds from merchants who failed to deliver the goods or delivered them in unsatisfactory fashion. However, recently those mechanisms are being abused by fraudsters and scammers in quite the opposite way than intended.
Safein will provide a buyer protection mechanism for crypto payments in its platform. The mechanism shall only be initiated if the goods are not duly received by the buyer or if they are not as described. Safein will provide all the tools to the buyers to protect their accounts, hence, merchants will be able to feel safe as there will be no chargebacks or fraud cases. If buyers and sellers are not able to resolve disputes themselves, a well-trained Safein support team will intervene and resolve the outcome of these disputes.
I. MVP
The Safein MVP now allows users to create an account on the Safein platform and connect it to a mobile device. Safein is currently integrated in a demo website where users can login with Safein without registering, adjust their security levels for different websites, track their login activity from their mobile devices and close active login sessions at any time. This website can be found at: www.curonian.com. Additional features are coming soon.
A, BENEFITS OF SAFEIN
We believe that our services will be desirable by both merchants and users. By employing our services, users would benefit by/from
Any online website which requires any sort of user identification or payments could greatly
benefit from our service. Our services could be utilized by:
Token Model
TOKEN DISTRIBUTION
MERCHANT AND USER BENEFITS
For example, right after the payment functionality launch, if merchant has 10,000 SFN tokens, he will be able to receive 100,000 SFN worth (at market price) of payments for his goods or services with no commission fee in any currency each month. After he receives 100,000 SFN, or equivalent amount in other currency, that month, he will be charged a standard 1% commission fee for the remaining part of the month. Doing some simple math shows that, if a merchant buys $1,000 worth of SFN tokens during the ICO and the token price doesn’t change, that will save him $1,140 of Safein commission per year (1% commission on total transaction volume) and more than $2,000 yearly compared to other payment service providers charging commission and fees more than twice as large as Safein. Accordingly, this should allow us to incentivize merchants to promote payments with SFN tokens even more, as this would allow them to store the tokens received from customers and minimize their commision fees further
Users paying with SFN tokens will receive 0.25% cashback for all of their purchases. Merchants will only be charged 1%, no matter what payment method is chosen by the user. No other crypto payments solution currently has an active cashback bonus system for its payments.
REGISTRATION POOL
The Safein Registration Pool is to be distributed among 5,000,000 users of Safein that are first to complete full account verification after the launch of Registration Pool. The Registration Pool shall be distributed in “decreasing reward” fashion following this model:
expect the Registration Pool to be launched within few months following the conclusion of the ICO.
Login pool will be distributed as a reward for loyalty to:
Users and websites can claim their tokens in their panel on Safein website.
Safein allocates 5% of its total token supply for its Referral Program. Users who invite their friends to register on Safein will be rewarded the same amount of Safein tokens that the new user is rewarded from the Registration Pool. For more details please see the Registration Pool section. Referred users will only entitle their friends to referral bonuses if they fulfill all of the below within 90 days from registration:
The Safein Referral Program is planned to be launched within 6 months of completion of the ICO, however, not before the launch of payments.
Safein allocates 1% of its total token supply for its Airdrop Program. By subscribing to Safein social media platforms each user will be eligible to receive 500 SFN tokens. For more information on how to participate in the airdrop please visit www.safein.com
In the short term it is expected that token value will grow due to the growing user base and expanding list of partnering merchants. Users will be incentivized to use SFN tokens for their payments due to cashback bonus, merchants will be buying SFN to receive commission free payments. Due to merchants holding the tokens and users buying them to receive the cashback bonus, demand will be going up, supply will be going down and token price should therefore go up. Section 4.2 goes into more details on how beneficial it is for the merchants to save on commission by possessing SFN tokens.
N.B.: Since the company shall be working in an extremely fast changing environment and is still under rapid development itself, some features envisioned for the company’s token model, commision size, Referral Program as well as the Registration and Login Pools might become redundant or subject to change in the future. Accordingly, the company reserves the right to change and revise these features, bonuses and incentivization programs as such need materialises and is recognized as such by the management of the company.
GROWTH STRATEGY
Safein’s success is based on rapid growth of the user and merchant base. Safein won’t be successful if it’s not widely used. Given that imperative, one of the key project priorities is adapting every part of the project (including token model, marketing strategy, business strategy and technical development) for rapid growth of user and merchant base. Safein’s token model is designed to incentivize users and merchants to use Safein as much as possible.
The Safein team will use different strategies tailored for users and merchants. Our user base growth strategy initially relies on the Referral Program. This strategy was actively used by PayPal, Airbnb, Dropbox and other companies which managed to achieve viral growth. Initial user base will be achieved by signing-up users during our ICO and then launching our referral campaign. 5% of the generated Safein tokens will be allocated to the Referral Program. With an initial critical mass of users registered during our ICO, our user base will grow exponentially. Starting active marketing campaigns in certain industries, as mentioned in previous sections, will allow us to demonstrate user benefit of having one single login for most popular websites. Similar example can be seen in the gaming industry, where Steam login is already extremely popular when it comes to websites where users don’t need to show their true identity or pay for goods.
Acquiring merchants in crypto and gaming spaces is easier with a very large user base and Safein’s benefits for both industries:
CRYPTO
Safein will start its user acquisition from two different verticals: the crypto audience and the online computer games market. Both of these sectors have tech savvy user bases already using or at least aware of cryptocurrencies. Users in these sectors often face repetitive registrations, KYC procedures and identity verification.
The gaming industry is also suffering from fraudulent payments. Safein would be able to eliminate this problem. Global revenue for online games related industries passed $100bn in 2017 , making it a very attractive sector to start Safein user acquisition, especially as the founding team has great experience and connections in this market. After establishing in the gaming industry it’s logical to go to all markets surrounding it.
Crypto markets are suffering from delayed registrations to exchanges, and ICOs due to very slow identity verification processes. Safein is currently securing partnerships with crypto market players to save their time and costs on KYC processes and to improve user experience allowing to sign-in to websites passing KYC documents from Safein account. This would be completely free of charge for users and businesses with only a very small commission for payments going through Safein platform.
REGULATORY CONSIDERATIONS
Since payment services are envisioned to form the core of our operations, these services shall fall under increased governmental scrutiny and thus be subject to licensing in most markets. On the other hand,we should note that Safein plans to allow payments in both fiat money and cryptocurrencies. Accordingly, at least for the foreseeable future, most jurisdictions will treat these types of payments differently and different considerations are therefore relevant for these payment methods.
First, Safein plans to initially focus its expansion in the European Union. Accordingly, EU E-Money Directive (2009/110/EC) establishing universal guidelines for regulation of Electronic Money Institutions (EMI) across the EU is the primary focus of our legal considerations. In view of this, as well as numerous discussions with various regulators and other legal professionals. Safein acknowledges this EMI license as necessary for successful development and continuous expansion of our business. In view of the above, obtaining this license for payment operations, e-money issuance, SEPA transfers and IBAN account creations will be a top priority as of the first days following the ICO. It should also be noted, that, once received, this license will enable us to enjoy the so called “passporting” right and conduct our operations in all 28 EU member states.On the other hand, it should not be forgotten that most leading jurisdictions still lack clarity in respect to regulations applicable to cryptocurrencies. Accordingly, at the time of writing, this usually means that such payments do not fall under the scope of already existing regulatory regimes and, hence, are not subject to licensing. Even though this might seem convenient at first, we see this lack of established rules more as a threat than an opportunity. In view of this, Safein is determined to place all our payment activities under due regulatory
scrutiny as soon as possible, and to obtain the above mentioned EMI license for payments not only in fiat money, but in cryptos as well. Accordingly, our present aim is to seek this license in Luxembourg, currently the only EU jurisdiction fully catering to our needs. We should note, however, that the process of obtaining this license in Luxembourg is quite lengthy and can take more than a year, thus crypto payments functionality might be provided to Safein users even before the license is obtained. In that event, these services will only be provided in countries where such license for crypto payments is not yet mandatory and will remain unlicensed only until the respective license covering both methods of payments is received. Furthermore, we continue to actively monitor the regulatory developments in other EU countries and will strive to take advantage of them in case a more optimal licensing procedure becomes available.
Finally, it should be noted that the EMI license grants limited powers outside the EU and is not a global solution to all regulatory inquiries. Accordingly, our regulatory efforts will not be limited to EU only and further regulatory considerations will also be duly made before any expansion outside the EU.
ORPORATE STRUCTURE
Since regulatory regimes, financial logic and accepted business practices often dictate division of project operations among separate legal entities, companies implementing the Safein project shall also be organized in a company group composed of several separate legal entities. Accordingly, initially the ICO company shall be established in Estonia. Most of the operations will be performed by a company in Lithuania whereas payment operations shall be conducted through an entity or entities established in jurisdictions providing the applicable legal framework for these operations. Further developments of this company group might also be possible in the future as the need for such changes arises.
TOP LINE
Safein’s business model is based on growing the merchant base and number of active user wallets. For each of the verticals we will be working on in the first 36 months, we estimate different growth models.
Number of total merchants and total user wallets are estimated to reach 3,600 and 1,7 million respectively by the end of the 36th month.
THE TEAM
The team behind Safein is composed of successful repeat entrepreneurs and various industry experts giving Safein the experience necessary for building and growing Safein platform.
Merchants also benefit with our platform as Safein significantly reduces merchant costs for user onboarding and verification. Furthermore, Safein reduces transaction fees and can remove the problem of having to manage lost passwords for the customer support. Merchants also get easy access to crypto payments at one of the lowest commission fees in the market with a completely free identity verification tool. Moreover, merchants who possess Safein tokens in their wallet will be able to process payments with no commission. Our platform will also help them increase trust and user onversion rates as well as protect them from accidental breaches of increasingly complex data protection regulations and processes.
building a universal gateway for e-commerce requires scale and wide product adoption by the target audiences. Accordingly, our growth strategy is primarily focused on rapid scaling of our user base and initially introducing the platform to the communities our team has best access to - gaming and crypto-assets. In order to achieve these goals, we will employ similar incentivization tactics as used by PayPal or Airbnb and reward the first adopters of our platform with Safein tokens. Across 3 market verticals we will enter, total number of merchants and user wallets by end of 36th month in operation are estimated to reach 3,600 and 1,7 million, respectively. Cumulative monthly growth rate in value of transactions is estimated to be 18-20% and net commission revenue will grow in line. Operational breakeven is expected to be achieved in approx. 20 months after launch of revenue generating activities.
Work on our vision is already in progress and users will soon be able to try out a fully functional MVP on our website and sites of our partnering websites. Beyond further development of the platform itself, our team is currently working hard on expanding the company’s network of partners, names of which will be announced in due course. The process of obtaining an electronic money license in the EU is also in progress.
The Safein ICO starts on 25th of April 2018. At this time 30% of the Safein tokens will be issued with the remaining pool will be used for user and merchant incentivization, remuneration and further development of the platform.
Rapid growth of e-commerce remains unstoppable. However, the industry itself is still ripefor improvements as growing concerns mount over data protection, cybersecurity, money laundering and monopolization of numerous sectors. Moreover, shopping online is not only troublesome, it’s also redundantly complicated. Think, for example, of all the repeat registrations, verifications and password recoveries trailing the daily online customer experience.
The Safein believe that outdated technology is to blame for almost all of these problems. Accordingly, we think it’s about time to fix this by embracing a modern way of managing your online identity and the shopping experience.
A.POOR USER EXPERIENCE – POOR E-COMMERCE
One could argue that the internet was designed around the groundbreaking discovery of public database – the website – thus making it the very core of Web 1.0 but subsequently leaving user engagement somewhat secondary. However, as the internet evolved and grew in popularity, personalized online user interaction standards emerged as standard for the protocol. Hence keeping track of “who’s who” became crucial for the online community.
Unfortunately, the internet was created without an identity layer, thus online merchants, forums and other stakeholders had to develop this layer from scratch. Instead of joining forces for this endeavor, each website decided to solve this problem internally which consequently gave rise to the well-known horror of “signing up” and creating different accounts for every single website we visit.
It’s worth noting that, in its infancy, “signing up” wasn’t really that bad. First, there were only so many websites that asked us to register, and setting up your user account brought the joy of creation to many. However, this perception swiftly changed once our modern lives became dependent on the internet and shopping online turned mainstream. Naturally, with ever-growing Web 2.0 interactions still relying on stagnant user onboarding procedures, we had to “sign up” and “sign in” more and more. Subsequently, irritation with providing the same data, already submitted numerous times before, grew to the point where at least 22% of current online shoppers simply choose to abandon their carts if completing the purchase required creation of a new user accountAnti-Money Laundering (AML) and general Know Your Customer (KYC) procedures did not take long to become ubiquitous. In turn, this made customer onboarding even more problematic as using financial or other regulated services online in most cases required submitting personal documents for manual review and waiting for them to be verified. Since we live in the age where time is perceived as precious commodity, this delay between account creation and verification (sometime lasting more than a month) naturally persuades many potential customers to stick with the regulated service provider (e.g. inferior bank) they already work with or forego buying something online altogether. All this just to avoid the hassle of printing, signing, scanning and submitting their passports or utility bills once again.
Small armies of KYC specialists need to be available in each company so that legal requirements are not breached and exorbitant fines—like the one received by Paddy Power for failure to verify just 3 customers—can be avoided. Moreover, no matter how good, KYC departments usually fail to deliver their service within 24 hours. Naturally, this deters potential customers who need your services promptly (e.g., access to financial markets) or not at all (think of buying stocks on the last hours before quarterly results for example).
Finally, multiple accounts and different passwords are not easy to manage for either users or merchants. This is perfectly illustrated by the fact that 30-40% of support center call volume is related to something as stupid as password and account recovery.
This is the magnitude of user time and merchant resourc- es that could easily be saved for better purposes with an advanced Identity 2.0 solution. Additionally, wide- spread adoption of Identity 2.0 could also diminish the above-mentioned obstacles to fair competition, enable greater consumer mobility, maximize product utility, and supercharge the total growth of e-commerce. Lastly, we live in the age where generations Y and Z tend to reject walls on the internet, and jump between the growing num- ber of platforms with no sentimental attachment. In this new reality, the old way does not work anymore.
B. LACK OF TRANSPARENCY IN HOW USER DATA IS MANAGED
The need for online merchants to identify their customers through “login” functionality rose from shortcomings of the internet itself and was quite justifiable at the dawn of e-com- merce. However, as the World Wide Web evolved, this feature remained unchanged. Two factors are to blame for this shortcoming. First, moving from site-centered Identity 1.0 to user-centered Identity 2.0 required significant investment by site owners, and broad con- sensus of the online community, neither of which is easy to attain. Second, businesses discovered over time that user registration wasn’t just draining their resources, it was also giving them precious piles of data on users’ geography, demography, contacts, and pref- erences for further sales. Naturally, it didn’t take long for businesses to discover that such databases could easily be packaged and sold to the highest bidder, enabling the digital advertising industry that’s currently worth more than 220 billion USD8 a year.
In this environment, merchants became eager to mine more and more data on their site users, thus giving rise to a society where 76% of all online users claim that information requested of them during the registration procedure is intrusive and unnecessaryFurthermore, since extensive profiling was not really welcomed by the community, almost 60% of internet dwellers started retaliating with increasing numbers of fake email address- es and other false data being submitted during registration10. To date, this problem has got- ten so big that, on average, 10% of any online community user database is likely to be false
And that’s completely understandable, as most of us try to avoid unwelcome data mining or spamming operations. Excessive and intrusive questioning also impacts commerce. Many survey respondents list privacy and security issues among the key factors of shopping cart abandonment. Moreover, we normally treasure our right to privacy as a basic human right that we expect to be protected. Governments do try to do this, and data protection is no longer at the sidelines of political agendas (think GDPR for example). But forcing e-com- merce incumbents to stop collecting and storing valuable data they don’t really need is no easy feat, and legal enforcement is struggling to overcome the “Agree with everything” checkbox we ticked during the last registration. Accordingly, instead of waiting for the world to fix itself, Identity 2.0 could step up and lead the way.
C. THREATS TO ONLINE SECURITY
The rise of online shopping, digital marketing and loyalty schemes resulted in merchants storing more and more consumer data that is of value to cyber criminals. Not surprisingly, breaches involving loss of client data from hacking or online leakage doubled in one year from 2015/16 to 2016/1715. Accordingly, we’re currently at a place where 60% of consumers believe online merchants aren’t doing enough to protect their personal information. 34% of respondents even go as far as to avoid buying online altogether.
This fear is not without merit. In 2016 we saw 1.1 billion identities exposed in data breaches and 2017 hasn’t been any betterEquifax alone exposed 143 million accounts in the first half of the year. And we should not forget that this is super sensitive per- sonal data that’s likely to remain accessible to fraudsters indefinitely. Naturally, this is frightening.
In light of all these problems, it is no wonder that over 69% of consumers look for websites displaying trust symbols provided by Bizrate, Customer Certified, TRUST and others. Properly posting these symbols on your website is neither easy, nor cheap. Accordingly, they’re usually not present on new and exciting websites such as startups struggling to raise capital, deliver goods and further develop products. Such merchants need to prioritize cy- ber security and data protection, but the costs tend to prevent this.
Established merchants, however, do have the resources to improve security, but they fall victim to fraudsters with talent and determination to steal the valuable treasure chests of merchant data. Fewer and fewer merchants have the resources and capability to withstand the constant cyberattack, and that results in fewer and fewer trusted merchants online. Over time, consumers opt for these few trusted merchants, but using just a few sites for everything is far from ideal. Competition 101 tells us that rising barriers for entry and effective discrimination of startups inevitably leads to fewer choices, slower innovation, oligopolies and, ultimately, higher prices. None of this is good for the consumer.
Distortions to competition, e-commerce and privacy brought about by the rise of cyber- crime are too great to ignore. Something needs to be done. Therefore, we believe that Identity 2.0 could be a huge step in the right direction.
D. BARRIERS FOR REGULATED BUSINESSES
Obviously, having your business online does not shield you from most of the requirements imposed on brick & mortar merchants. Regulations intended for consumer or data protec- tion as well as tax collection work for the cyber and real worlds almost identically. However, not all commerce is the same and some of it is subject to extra scrutiny. We speak here of licensed businesses such as pharmacies, financial brokers, beverage stores, casinos, etc. These are the businesses that, if run badly, could hurt the society we live in. Hence, they are required to adhere to higher standards in order to protect both consumers and com- munities.
Probably the most popular way to protect the young is ban them from using some goods or services until their adulthood at the age of 16-18 or 21. However, whereas in the real world establishing your age isn’t that hard, and being asked for ID in some bar at the age of 40 is almost unheard of, buying liquor online is a completely different story. Online merchants are unable to actually see their customers and judge their age on appearance. Accordingly, they need to solve this problem in some other way. And the way chosen by most is online ID verification.
This verification is quite unsecure, costly and for the user, irritating – especially when you have to do this repeatedly. Moreover, with numerous different IDs across the globe, popu- lations with no IDs and stolen IDs bought for a few dollars, one should wonder, how capable are the merchants of really establishing true identity and age of their shoppers? And, how much do the customer support armies employed for this task cost them?
Even if your true identity online can be discerned, this is usually not enough. Although in- ternet has no borders, domiciles of its users do. Accordingly, applicable laws differ for users from the Netherlands and India. To put it simply, whereas something is legal for a Dutch of , the same thing can still be banned for an Indian of 70. The same can be said about taxes VAT in Denmark is 25 percent whereas in Malta it’s only. Online merchants need to know and account this properly, but we believe that few merchants do. With the wide use of VPNs online, users tend to “cherry pick” the jurisdictions that suit them best or have the lowest taxes. Of course, consumers will always take the path of least resistance, and that’s understandable because it’s really the merchant that’s going to be blamed, fined and prosecuted if something goes wrong. Nobody should want this.
E. ABSENCE OF A UNIVERSAL E-WALLET
Whereas the inefficiencies of “signing up” and “signing in” are widely debated, we believe that this debate is still missing one core issue; the outdated way we pay for the goods or services acquired online. Traditionally there’s actually more than one “signing in” in the on line process of buying. First, you sign in to the store it self and then you do it again to access your payment provider. Naturally, this means two accounts and two passwords. Surely that redundancy could be optimized.
While the above scenario is already far from ideal, we believe that the most common alternative is not actually better. We mean here regulated merchants like currency exchanges, betting houses, etc., all of which usually require users to deposit funds upfront to get the services they came for. This is flawed in the way that it makes customers wait from 3 to 72 hours before being served (by which time we might lose our interest altogether), with less established businesses it can be many times worse.
Many of us at least once felt this fear of transferring a balance to some new exchange or online casino where we weren’t actually sure that the transferred amount would be added to our balance. This is quite common; the market is rich with stories of fraudulent websites and disappearing accounts. Even if your balance gets added to your account, you cannot yet be sure that you’ll be able to withdraw it later.
Due to the above problems, we believe that a significant part of e-commerce is lost on the part of new entrants. Commerce needs trust, and while it’s easy to establish it with simply opening your wallet in the physical world, online shopping is different. Accordingly, forgoing the old-fashioned ways and conducting all payments from a single account could greatly benefit e-commerce, development and competition alike.
Finally, with regard to the use of a cryptocurrency and blockchain systems, we feel the technology is strongly applicable, but needs enhanced stability to better serve ecommerce. The Bitcoin idea was born almost 10 years ago. The whole cryptocurrency market is worth well over $500bn and crypto payments are still not widely used. The general reasons for that is volatility of cryptocurrency rates, which frightens merchants, and limits blockchain technology. The world needs a onestop payment solution for both, traditional payment methods and cryptocurrencies, with ability to instantly convert payments to the currency that merchant feels safe with.
A. COMBINING THE BEST OF TWO WORLDS
Data shows that modern internet users have a strong preference for single sign-on solutions like Facebook identity or Google accounts. In fact, some 88% of all online customers use these gateways from time to time to sign into websites they visit. On the other hand, neither Facebook nor Google can grant an account that’s verified or capable of payments, which significantly limits user convenience and growth. Accordingly, there’s a huge market that’s ripe for the taking.In view of all this, as well as the cyber world problems mentioned in previous sections, the Safein team has set out to create a single sign-on and payment solution that can be used universally on all websites. By doing so we will eradicate the traditional way of creating accounts on numerous websites we shop on, and we will enable the world to adopt Identity. This profound leap in technology can easily eliminate the inefficiencies of never-ending KYC procedures and finally grant the community a default customer gateway for all e-commerce activities.
Equally important is our ambition to finally enable our customers to properly secure the personal data used for e-commerce, and shop anonymously wherever possible. We strongly believe that instant access to payment for services, with no delays for KYCs or deposit transfers, will undoubtedly lead to greater competition, increased conversion rates and booming e-commerce. In tandem, merchants will benefit from a significant cut in their cost of regulatory compliance, data protection, KYC and user onboarding, cyber security, as well as reduction in need for significant portion of customer support handling trivial matters like password recovery.
Here’s how we will achieve our goals
B. SAFEIN ARCHITECTURE
Safein will allow users to store their identity, as well as crypto and fiat currencies in accounts opened on our platform. Safein will go into various business areas where combination of possessing all of the above gives benefit to its users online and offline. The main priority of Safein is to eliminate redundant registrations and KYC procedures.
C. DIGITAL WALLET AND PAYMENTS
Safein is planning to be a fully licenced EU electronic money institution with the ability to receive and process payments in full compliance with the law. Users will be able to hold their crypto and fiat currency in a single wallet as well as convert them from one to another. Major crypto currencies, including Bitcoin, Ethereum ERC20 tokens, and other popular cryptocurrencies will be supported. Currency exchange functionality, for crypto and fiat, will be standard for all currencies with 0.5% markup from the best available rate in the market. Having an EU electronic money institution (EMI) licence will allow Safein to connect to the SEPA network and give IBAN codes to all of our users. Having that available, Safein will be one step closer to becoming a standard instrument for daily use. Additionally, Safein plans to have payment cards linked to users’ accounts, so users will be able to use their Safein accounts daily both online and offline.
Standard Safein e-commerce commission for merchants will be 1%. Merchants who possess Safein tokens will be able to receive part of their payments free of any commission, and users who pay with Safein tokens will receive 0.25% cashback on every purchase. More on these Safein token benefits can be found in the “Token model” Section.
D. SINGLE SIGN-ON
Safein provides a unique solution for both users and merchants. Users will be able to login into websites directly with no registrations. The Safein account will at the same time provide merchants with the information necessary for client acceptance and service provision. For example, if a user is signing in to a forum, the forum usually only needs to know user’s display name or some unique identifier enabling it to separate the user from others. In this case, Safein would not disclose data like user’s full name, address, etc. Instead, it will only provide the forum with the required username. On the other hand, should the same user be buying a physical book, additionally, the merchant would be provided with user’s full name and address for shipping. Despite this, the user will have full control of his data at all times, always seeing what information is being requested by the merchant and giving a clear consent to such transfer up front.
Before integrating Safein, a merchant will have to choose what user data is essential and must be acquired, and what data is optional and could be omitted. Our team will monitor this process and advise merchants on whether their choices on data to be collected complies with applicable data protection regimes. Moreover, the user will be able to choose whether to pass or decline passing optional data to the merchant. Safein will try to grow a generation of users who value their personal data and do not share it with everybody by default. The same applies to merchants, as we will try to do what we can, without losing our competitive advantages, to limit merchant requests for data and convince them to accept anonymous users where possible.E. USER DATA PROTECTION
Primary focus of many online merchants is business expansion. Given limited resources available to most companies (especially the smaller ones), businesses tend to focus on core functions; areas like proper user data collection and management don’t get enough attention. This is where Safein steps in.
In particular, it’s no secret that even though many online shops conduct their business globally, most of them are not experts in different rules of data protection in every market. Many don’t even know all the details of the laws applicable in their own jurisdiction. We believe that this is one of the core reasons for excess data mining and general non-compliance with data protection legislation online.
With all this in mind, Safein’s architecture is built in a way that solves most of these problems automatically. First, as required by recent developments in the EU, our users will always be presented with a full and clear information on what personal data is being passed on to relevant websites. No such transfer shall take place without clear consent of the user. Moreover, once the user agrees to give her specific data to a merchant on the first login, the merchant will be able to access this data on our platform anytime before this relationship is terminated by the user. Accordingly, such merchant will have little reasons to store this information on his own server and thus be able to significantly decrease his and his user’s exposure to hacking operations and data theft (as well as save some expenditure related to counter measures to such threats).
We argue that such measures will not only help merchants comply with the EU General Data Protection Regulation (“GDPR”), coming into force as of 25th of May 2018, and also be beneficial for customer trust in general. As compliance with GDPR becomes increasingly important, Safein will dedicate significant resources to educating the merchants on applicable requirements and guiding them when deciding on which customer data should and should not be collected by specific merchants. In short, we’ll strive to pass only the “need to know” information to merchants and maintain our users anonymity where possible. Furthermore, the platform will also solve the problem of personal data updates with different service providers as all relevant merchants will receive information on updated addresses, surnames, etc. automatically as soon as such changes are submitted to our platform. Finally, the Safein platform will enable our users to truly exercise their rights of personal data management and terminate any previous sharing of data with specific merchant.
Even more importantly, we will also let our users to properly exercise Art. 17 of GDPR (“the right to be forgotten”) in the EU and request any merchant to delete specific user data from their archives immediately upon receipt of a relevant notice. All this shall be done without leaving the boundaries of our platform as the user will simply be required to click a couple of buttons and let our platform take care of further communication with the merchant on behalf of the user.
We believe that all the above features will be greatly beneficial for both users and merchants and should be appreciated by educated and law abiding online community in general. Moreover, as Safein will closely monitor its partnering websites and share no information with entities of uncertain reputation, our services should also help in growing trust in e-commerce thereby increasing the conversion rates.
F. MULTI-FACTOR AUTHENTICATION MECHANISM AND DIGITAL IDENTITY MANAGEMENT
Security must be a primary focus while managing your identity and wallet online. Safein will have a multi-factor authentication mechanism implemented from the very beginning. While integrating Safein, each merchant will be able to choose a minimum security level that he requires from its users. For example, merchants can ask that all logins to the merchant’s website and all payments must be confirmed by user on his mobile device- i.e. (i) a push notification shows up, (ii) user must identify himself via pin code or fingerprint on his mobile Safein app and (iii) approve login or purchase. User (in his panel) can also enhance general security levels for each website individually. For example, even if a specific website does not require mobile device confirmation for website login, a user can always enhance his security level by enabling that requirement himself.
With Safein, users will not only be able to fully control their logins and actions, but track and manage them as well. Users will be able to see their full activity history, including logins and payments, track their used devices, manage current active login sessions and cancel them at any time. Users will also be able to easily check which website has access to certain data. Most of the functionality related to identity management is already available in the MVP
G. KYC PROCEDURE ENGINE
Safein team is currently in talks with the world’s leading automated ID verification service provider to provide exceptionally accurate results using its AI powered document checking algorithm. Such checks, where users will only need to scan their IDs with their cameras and take selfies, will be sufficient for most uses. Some advanced verifications, where users need to comply with very specific regulations (for example, some cryptocurrency exchanges), will be done manually by the Safein team. It could take up to few minutes, but compared to current waiting periods of weeks for some exchanges, it is still a radical improvement, especially keeping in mind that users will only need to do it once.
H. BUYER PROTECTION MECHANISM
Most of the merchants are well aware of the issues that arise from credit card chargebacks and fraud. One of the biggest advantages of crypto payments is that they are irreversible. In standard e-commerce the merchant is considered to be a more trusted party, hence the buyer needs to send the payment first. Chargeback and dispute resolution mechanisms were invented to help the buyers recover funds from merchants who failed to deliver the goods or delivered them in unsatisfactory fashion. However, recently those mechanisms are being abused by fraudsters and scammers in quite the opposite way than intended.
Safein will provide a buyer protection mechanism for crypto payments in its platform. The mechanism shall only be initiated if the goods are not duly received by the buyer or if they are not as described. Safein will provide all the tools to the buyers to protect their accounts, hence, merchants will be able to feel safe as there will be no chargebacks or fraud cases. If buyers and sellers are not able to resolve disputes themselves, a well-trained Safein support team will intervene and resolve the outcome of these disputes.
I. MVP
The Safein MVP now allows users to create an account on the Safein platform and connect it to a mobile device. Safein is currently integrated in a demo website where users can login with Safein without registering, adjust their security levels for different websites, track their login activity from their mobile devices and close active login sessions at any time. This website can be found at: www.curonian.com. Additional features are coming soon.
SAFEIN BENFITS and APPLICATION
A, BENEFITS OF SAFEIN
We believe that our services will be desirable by both merchants and users. By employing our services, users would benefit by/from
- Being able to skip multiple time-consuming registration,s and gain access to any services immediately with no delays for identity verification or transfer of deposits;
- The end of management and recovery of numerous user accounts with different passwords;
- Ability to buy from a merchant offering the best prices or products rather than from the one user already has a verified account with;
- Convenient one-stop shop for both, easy online access and payments;
- Full and clear disclosure of what customer data is being passed on to websites;
- Increased cybersecurity of their personal data;
- Comfort that the company collecting their personal data (i.e. Safein) is trustworthy and will be able to protect it;
- Significantly lower transaction fees as well as an ultra-convenient way to make payments in both fiat and cryptocurrencies;
- Increased anonymity, and protection from unwelcomed data mining and spamming activities;
- Ability to instruct chosen networks to cease collection of respective user’s data as well as delete the data collected on the user;
- Cashback as well as further rewards for loyalty and use of our services.
- Increased conversion rates due to reduced loss of customers shunning any new registration;
- Reduced costs of user verification procedures (as we would provide such verified users free of charge) as well as significant savings in account/password recovery department.
- Diminished need to worry about compliance with GDPR and data protection regulations in other countries;
- Reduced risk of cyber leaks of customer data;
- Access to our growing group of users, who are incentivized to use the services provided by our partners;
- Ability to accept payments from users aying in both, fiat and crypto;
- Lower transaction fees;
- Single plug-in integration;Ability to properly establish user’s location and applicable legal regime;
- Commission discounts and further rewards for using our tokens and services.
- Increased conversion rates due to reduced loss of customers shunning any new registration;
- Reduced costs of user verification procedures (as we would provide such verified users free of charge) as well as significant savings in account/password recovery department.
- Diminished need to worry about compliance with GDPR and data protection regulations in other countries;
- Reduced risk of cyber leaks of customer data;
- Access to our growing group of users, who are incentivized to use the services provided by our partners;
- Ability to accept payments from users paying in both, fiat and crypto;
- Lower transaction fees;
- Single plug-in integration;
- Ability to properly establish user’s location and applicable legal regime;
- Commission discounts and further rewards for using our tokens and services.
Any online website which requires any sort of user identification or payments could greatly
benefit from our service. Our services could be utilized by:
- Crypto exchanges and other ICOs;
- Digital goods markets where fraud and chargeback rates are extremely high;
- eShops, benefiting from extremely low payment fees, access to crypto payments and verified users;
- Online financial or legal gambling service providers (which could easily use our platform to verify user’s age and applicable legal regime as well as accept payments from the user with no further registration process);
- Car-sharing and other rent service providers;
- Investment and trading platforms;
- Social networks;
- Regional polls (utilizing our ability to give access to users from certain jurisdictions only);
- Smart contracts (users could feed their data directly into smart-contracts by using our databases);
- E-signature and merchants in need of immediate verification of the data presented to them in person (our users would be able to prove credibility of their claims by supporting such claims with verified data on our website);
- Brick and mortar retail shops of at later project stages.
Token Model
TOKEN DISTRIBUTION
MERCHANT AND USER BENEFITS
For example, right after the payment functionality launch, if merchant has 10,000 SFN tokens, he will be able to receive 100,000 SFN worth (at market price) of payments for his goods or services with no commission fee in any currency each month. After he receives 100,000 SFN, or equivalent amount in other currency, that month, he will be charged a standard 1% commission fee for the remaining part of the month. Doing some simple math shows that, if a merchant buys $1,000 worth of SFN tokens during the ICO and the token price doesn’t change, that will save him $1,140 of Safein commission per year (1% commission on total transaction volume) and more than $2,000 yearly compared to other payment service providers charging commission and fees more than twice as large as Safein. Accordingly, this should allow us to incentivize merchants to promote payments with SFN tokens even more, as this would allow them to store the tokens received from customers and minimize their commision fees further
USER BASE GROWTH
REGISTRATION POOL
The Safein Registration Pool is to be distributed among 5,000,000 users of Safein that are first to complete full account verification after the launch of Registration Pool. The Registration Pool shall be distributed in “decreasing reward” fashion following this model:
expect the Registration Pool to be launched within few months following the conclusion of the ICO.
LOGIN POOL
Login pool will be distributed as a reward for loyalty to:
- users who use Safein login;
- websites who have Safein login implemented.
Users and websites can claim their tokens in their panel on Safein website.
- Users split ¾ of the pool;
- Websites split ¼ of the pool.
REFERRAL PROGRAM
Safein allocates 5% of its total token supply for its Referral Program. Users who invite their friends to register on Safein will be rewarded the same amount of Safein tokens that the new user is rewarded from the Registration Pool. For more details please see the Registration Pool section. Referred users will only entitle their friends to referral bonuses if they fulfill all of the below within 90 days from registration:
- Fully verified account and identity;
- At least $10 worth of crypto or fiat currency deposited;
- At least $10 spent on goods or services.
The Safein Referral Program is planned to be launched within 6 months of completion of the ICO, however, not before the launch of payments.
AIRDROP PROGRAM
Safein allocates 1% of its total token supply for its Airdrop Program. By subscribing to Safein social media platforms each user will be eligible to receive 500 SFN tokens. For more information on how to participate in the airdrop please visit www.safein.com
TOKEN SALE
Token sale will be run on a smart contract and tokens will be distributed right after the token sale ends.
These are our goals in terms of funds:
Our soft cap target is based on a minimum amount of funds required to launch the product and enter our initial target markets. Upon reaching the hard cap, we are able to develop a fully decentralized blockchain-based solution while targeting multiple industries and service providers at the same time.
Should any part of the tokens allocated to token sale not be distributed during the token sale, such tokens will be returned to the company and added to its reserve for further development. In case of failure to reach Soft cap, all contributions will be returned to their original owners.
The Safein token sale will be distributing 30% of the total token supply to cover the below costs:
- Further development of our product
- Development of Safein integration for businesses
- Developing decentralized blockchain-based solution
- Token sale expenses and marketing
TOKEN VALUE AND FURTHER DEVELOPMENT
In the short term it is expected that token value will grow due to the growing user base and expanding list of partnering merchants. Users will be incentivized to use SFN tokens for their payments due to cashback bonus, merchants will be buying SFN to receive commission free payments. Due to merchants holding the tokens and users buying them to receive the cashback bonus, demand will be going up, supply will be going down and token price should therefore go up. Section 4.2 goes into more details on how beneficial it is for the merchants to save on commission by possessing SFN tokens.
N.B.: Since the company shall be working in an extremely fast changing environment and is still under rapid development itself, some features envisioned for the company’s token model, commision size, Referral Program as well as the Registration and Login Pools might become redundant or subject to change in the future. Accordingly, the company reserves the right to change and revise these features, bonuses and incentivization programs as such need materialises and is recognized as such by the management of the company.
BUSSINES PLAN
GROWTH STRATEGY
Safein’s success is based on rapid growth of the user and merchant base. Safein won’t be successful if it’s not widely used. Given that imperative, one of the key project priorities is adapting every part of the project (including token model, marketing strategy, business strategy and technical development) for rapid growth of user and merchant base. Safein’s token model is designed to incentivize users and merchants to use Safein as much as possible.
The Safein team will use different strategies tailored for users and merchants. Our user base growth strategy initially relies on the Referral Program. This strategy was actively used by PayPal, Airbnb, Dropbox and other companies which managed to achieve viral growth. Initial user base will be achieved by signing-up users during our ICO and then launching our referral campaign. 5% of the generated Safein tokens will be allocated to the Referral Program. With an initial critical mass of users registered during our ICO, our user base will grow exponentially. Starting active marketing campaigns in certain industries, as mentioned in previous sections, will allow us to demonstrate user benefit of having one single login for most popular websites. Similar example can be seen in the gaming industry, where Steam login is already extremely popular when it comes to websites where users don’t need to show their true identity or pay for goods.
Acquiring merchants in crypto and gaming spaces is easier with a very large user base and Safein’s benefits for both industries:
CRYPTO
- free outsourced identity verification;
- no network fees due to payments moving internally in Safein wallet;
- instant payments;
- ability to receive payments in any cryptocurrency;
- extremely cheap currency conversions.
- reduced fraudulent payments due to verified identities;
- buyer protection mechanism;
- access to crypto payments;
- only 1% transaction fee;
- free KYC procedures for large volume in-game item traders.
Safein will start its user acquisition from two different verticals: the crypto audience and the online computer games market. Both of these sectors have tech savvy user bases already using or at least aware of cryptocurrencies. Users in these sectors often face repetitive registrations, KYC procedures and identity verification.
The gaming industry is also suffering from fraudulent payments. Safein would be able to eliminate this problem. Global revenue for online games related industries passed $100bn in 2017 , making it a very attractive sector to start Safein user acquisition, especially as the founding team has great experience and connections in this market. After establishing in the gaming industry it’s logical to go to all markets surrounding it.
Crypto markets are suffering from delayed registrations to exchanges, and ICOs due to very slow identity verification processes. Safein is currently securing partnerships with crypto market players to save their time and costs on KYC processes and to improve user experience allowing to sign-in to websites passing KYC documents from Safein account. This would be completely free of charge for users and businesses with only a very small commission for payments going through Safein platform.
REGULATORY CONSIDERATIONS
Since payment services are envisioned to form the core of our operations, these services shall fall under increased governmental scrutiny and thus be subject to licensing in most markets. On the other hand,we should note that Safein plans to allow payments in both fiat money and cryptocurrencies. Accordingly, at least for the foreseeable future, most jurisdictions will treat these types of payments differently and different considerations are therefore relevant for these payment methods.
First, Safein plans to initially focus its expansion in the European Union. Accordingly, EU E-Money Directive (2009/110/EC) establishing universal guidelines for regulation of Electronic Money Institutions (EMI) across the EU is the primary focus of our legal considerations. In view of this, as well as numerous discussions with various regulators and other legal professionals. Safein acknowledges this EMI license as necessary for successful development and continuous expansion of our business. In view of the above, obtaining this license for payment operations, e-money issuance, SEPA transfers and IBAN account creations will be a top priority as of the first days following the ICO. It should also be noted, that, once received, this license will enable us to enjoy the so called “passporting” right and conduct our operations in all 28 EU member states.On the other hand, it should not be forgotten that most leading jurisdictions still lack clarity in respect to regulations applicable to cryptocurrencies. Accordingly, at the time of writing, this usually means that such payments do not fall under the scope of already existing regulatory regimes and, hence, are not subject to licensing. Even though this might seem convenient at first, we see this lack of established rules more as a threat than an opportunity. In view of this, Safein is determined to place all our payment activities under due regulatory
scrutiny as soon as possible, and to obtain the above mentioned EMI license for payments not only in fiat money, but in cryptos as well. Accordingly, our present aim is to seek this license in Luxembourg, currently the only EU jurisdiction fully catering to our needs. We should note, however, that the process of obtaining this license in Luxembourg is quite lengthy and can take more than a year, thus crypto payments functionality might be provided to Safein users even before the license is obtained. In that event, these services will only be provided in countries where such license for crypto payments is not yet mandatory and will remain unlicensed only until the respective license covering both methods of payments is received. Furthermore, we continue to actively monitor the regulatory developments in other EU countries and will strive to take advantage of them in case a more optimal licensing procedure becomes available.
Finally, it should be noted that the EMI license grants limited powers outside the EU and is not a global solution to all regulatory inquiries. Accordingly, our regulatory efforts will not be limited to EU only and further regulatory considerations will also be duly made before any expansion outside the EU.
ORPORATE STRUCTURE
Since regulatory regimes, financial logic and accepted business practices often dictate division of project operations among separate legal entities, companies implementing the Safein project shall also be organized in a company group composed of several separate legal entities. Accordingly, initially the ICO company shall be established in Estonia. Most of the operations will be performed by a company in Lithuania whereas payment operations shall be conducted through an entity or entities established in jurisdictions providing the applicable legal framework for these operations. Further developments of this company group might also be possible in the future as the need for such changes arises.
TOP LINE
Safein’s business model is based on growing the merchant base and number of active user wallets. For each of the verticals we will be working on in the first 36 months, we estimate different growth models.
Number of total merchants and total user wallets are estimated to reach 3,600 and 1,7 million respectively by the end of the 36th month.
TEAM, PARTNERSHIPS, ENDORSEMENTS
THE TEAM
The team behind Safein is composed of successful repeat entrepreneurs and various industry experts giving Safein the experience necessary for building and growing Safein platform.
Website : https://www.Safein.com
Medium : https://medium.com/Safeincom
LinkedIn : https://www.linkedin.com/company/Safeincom
Facebook : https://www.facebook.com/Safeincom/
Twitter : https://twitter.com/Safeincom
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