From Transactions to Payments

Transcript

Hello. Hello. GM Jim. Good morning, everyone. Thanks so much for coming. I know it's early, uh, but I wanted to really come here and open up on the vibes and just get everyone excited. It's the second day of ECC. Uh, ECC is actually 8 years old and so is WalletConnect. I always felt there was a special connection because we were such a birth almost at the same time around March. And I kind of want to share a little bit about the journey. ECC has been a great touchpoint for the community to understand how WalletConnect is impacting the world of wallets. And today I will kind of give you an update of what 2026 looks like for WalletConnect.

As you can see the title, um, from transactions to payments. So, basically we're going to transition ourselves from a world where it was very developer focused and now we're actually focusing on merchant payments. And as you can see also from the screen, my name is Pedro Gomes. I'm the founder of WalletConnect. I've created multiple iterations of what WalletConnect is today that now connects over 700 wallets. And now we are reaching a new world of payments across merchants across the world. Crypto has really found its place. When I say it has found its place is because there was always this kind of identity crisis where Ethereum tried to be a lot of things like the world computer. It tried to do decentralized governance. It

tried to do NFTs. But realistically, when you think about the tokenization of real world assets and even the money market's efficiency and instant settlement across the world, it really is the value proposition that has impacted people's lives. And through infrastructure, that's what we try to also help Ethereum to be even more accessible, to be even easier to use, and really build this platform such that every wallet developer could reach their audience. But there was always this like missing piece. Like if you think about the origins of crypto as a whole, Ethereum was an evolution over Bitcoin. But even in the original white paper for Bitcoin, it was always about payments. So, why

was a Bitcoin white paper written in 2008 and Bitcoin was launched in 2009 and it's still in 2026 and payments is probably one of the most underserved categories in the whole crypto. Yes, we have tokenization. We have trading. We have perps. We have We have prediction markets. We have everything that we've possibly imagine. New primitives from both DeFi to TradFi. But payments is still not a solved problem. And that's something that we want to have an impact as a WalletConnect. When you think about payments, it's a little bit different, right? Everything that has been done in the past with crypto was extremely technical and required a lot of user education.

Because when you think about transactions, they're not a tool for users. They're not a tool even for merchants. They're a tool for developers to build applications. Essentially to build a programmable money that kind of brought us all here. But then if we really want to solve payments, we can't use transactions as the core primitive for what it is the experience when you exchange for products and services. It can't be this highly complex technical object that we use as the primitive for this exchange because payments don't work like that.

So, you could think of payments as just sending funds, but it's so much more than that. In fact, there is an actual process to how to do payments and it's broken down into three core primitives, the authorization, the clearing, and the settlement. And in fact, many times we say crypto already does payments. But what crypto does is settlement, the finality of funds reaching from A to B. Authorization on the other hand is the first step of every payment flow. And when I say every payment flow, we're talking about bank transfers. We're talking about card payments, QR code payments. Every form of payments follows these three steps. And authorization is even the question whether or not I may

able to receive these funds. There's a lot of regulations across the world and this will change from jurisdiction to jurisdiction. But the merchant can't just bluntly accept payments. And these laws also change. Like even for example in Europe, we until this point we were able to spend cash up to a certain amount and they even lowered that threshold. So, the authorization aspect even for cash itself has changed where the merchant can't just accept any sort of amount of cash. While in card payments, it has different thresholds and different rules. But for example for crypto, one of the most common ones is is this an OFAC sanction address. That's one of the authorizations that needs to be run

before receiving the funds. And then in clearing, it has to be about the routing. How do you actually move these funds? Who is actually going to receive the funds? Who is actually the payment provider involved? How is the bank account going to receive the funds on the behalf of the merchant? What fees are going to be participating in this? And there's the whole monitoring and accounting aspect that comes with a payment. And then when all of this is concluded, then you actually do the settlement. Once you actually have finalized the payment, then you actually move the funds. So, crypto has to this day only done 1/3 of what it is the actual payment flow.

On top of that, there's two types of payments. These can be just distinguished by push and pull. Essentially push is what we also are very familiar in crypto, which is you as a consumer or as a sender are the one initiating the transaction. You're the one actually going to the blockchain, putting a payment that actually transfers funds from A to B. But because we haven't run the authorization and clearing, push payments essentially kind of run the process in reverse. You're starting with a settlement first and you haven't done the authorization and clearing and many times this requires you to have an escrow approach. Yes, escrows are not necessarily bad, but they're not a great experience because you're basically

removing the funds from the consumer, putting them temporarily with an escrow, making a decision whether or not to receive the funds, and then you might even need to spend gas to refund the funds back if the authorization does not pass. Pull payments on the other hand are much simpler. But for the longest time, it was so hard to do pull payments in crypto because delegating power or delegating an authorization for someone else to move funds on your behalf was very complicated. Sure, we had the ERC-20 that had allowances. This was part of the standard a long time ago.

But even allowances required the user to spend gas to just give an authorization for someone else to move funds. Then future standards like Permit 2 improved this experience with a die stablecoin. And eventually USDC even had an upgrade on top, which is the 3009, which is transfer with authorization, which is a very commonly well known now because it's actually how card payments work. And this is why pull really has won as a category because it really ensures that all checks and balances are done before the payment is actually authorized. Then you actually reduce the merchant risk because you're also don't have this moment where there's an escrow where funds are just sitting there and you

don't know if you are even able to accept those funds. And also it gives you a little bit more an instantaneous feeling because we are able to verify an authorization off-chain and then give you the guarantee that we will complete the settlement after without you having to wait for the finality of depositing into escrow, running the checks, and might even have the refund. So, actually even from a user experience perspective, it's much faster to do a pull payment than a push payment. And this is thanks to a lot of standards that stablecoins have developed like Permit 2 and transfer with authorization.

On top of this, WalletConnect has always been a big proponent that the world is multi-chain. And now we also have to think about a multi-token world. A multi-token world becomes a little bit more important when it comes to payments because while prior WalletConnect always focused on the wallet chain relationship, now we have to think about the wallet chain and token relationship because as we mentioned, we need to focus [snorts] on what does a pull payment experience look like. Because if a pull payment requires us to check the balance, to check the OFAC OFAC sanctions, and actually do these transfer authorizations standards, we also need to support every possible token pattern. And of course, if we need to accept Ethereum tokens, we actually need to use an escrow approach because

you can't do a transfer authorization with a native token. And this is not something that merchants want. Again, the biggest challenge with payments is we're not building for developers. We have to avoid complexity, risk, and user education. They just need to accept funds to pay for products and services. They do not care about how it works. In fact, they wish there was only one currency, one settlement, and one integration. And that's exactly what we're trying to achieve with WalletConnect Pay. We already launched WalletConnect Pay. A few wallets already have upgraded their SDKs to support this new flow. And essentially you could think of WalletConnect Pay as two things. It is both a backwards compatible universal flow that allows existing wallets to

connect their wallet as many years we've done. They can accept a payment. They can approve it and they can proceed. But this takes several steps. With WalletConnect Pay, we actually have the ability to actually have a flow with a point of sale that actually scan a QR code, displays a single prompt in your wallet, and you just pay, and everything happens behind the scenes. And it's also a single integration that can be improved over time. So, merchants don't have to be worried about is this version one, version two, version three. And it leverages the existing wallet network that WalletConnect has built over the years for both in-person and online payments.

Why merchants like this? Because at the end of the day, you get all the benefits of stablecoins, right? We're talking about globally accessible, faster settlement, instant finality, no chargebacks like cards do, nothing like refunds, and all of the disputes that you have. It's substantially cheaper as well. Like, sometimes we forget how much like merchants actually have to consider within their business, the lower profit margins because how much of it goes to card payments, who are now essentially just everywhere, you know, as cash payments have become less and less common.

And it's also actually accessing new customers. There's a lot of customers that do not have cards, and they want to pay with cash, but they either have to exchange for foreign currency, and with stablecoins, they can really travel the world or just have a more convenient experience than carrying cash in their pockets. The users also have a better experience because they can actually choose any wallet. And this is one of the big advantages of WalletConnect Pay is that we're building this as what it's called an open-loop system. In the past, there've been other solutions that tried to essentially give you a crypto payment experience, but they only work with a specific payment solution for the merchant and a specific payment app for the users. WalletConnect has always had been a network of

wallets. Therefore, everything that we build is for our 700 wallet partners. So, you really don't have to switch wallets. You can continue to use the wallet that you have in your pocket. And as wallets upgrade, they will move towards this one-click payment experience, so you don't even need to worry about connections, approvals, and everything that comes with. And of course, lots of people tell me, "But what about card payments that have all of these attractive cashbacks? Am I going to miss out on that just because we will be using stablecoins?" Sure, the merchants benefit by receiving stablecoins directly, but then as a consumer, you're missing out on all of these rewards. Well, I'm happy to tell you that even today, WalletConnect Pay

offers 2% cashback for anyone that uses at launch. And we're talking to other funds and chains and stablecoins to add top-ups on top of that, so we could see up to 4 to 5% cashback with specific blockchains or stablecoins that are participating in our network. And this is really how I think that we can take payments across mainstream, and it's really how I think that crypto will have a direct impact. So much of our experience has been around trading, around speculation, and very high-risk investment. But when you think about the average user, what they really care is a better user experience.

And with payments, we're not just talking about the wallets that we all use, the MetaMask, Trust Wallet, SafePal TokenPocket Coinbase Phantom and so on and so forth, but even the neobanks. All of these neobanks that either exist globally or regionally can actually benefit from this experience because now they don't have the constraints of actually having global accessibility because stablecoins are by design globally accessible. And this crypto-native money being in the hands of merchants also benefits the economy because many times these solutions for payments are actually converting the money from crypto to fiat, and the merchants are actually not benefiting from the stablecoin aspect, and they can't pay their vendors in

stablecoins, neither they can pay their employees in stablecoins. So, we can have a real flywheel effect if consumers pay in stablecoins and merchants accept stablecoins. So, yeah. What is WalletConnect doing today to help with this? As you can imagine, we've been developing infrastructure for many, many years, and lots of our wallets participating have already accepted the criteria that they can be upgraded to the next certified program by supporting payments. And if you are developing a wallet today, you can visit our documentation, you can scan the QR code, and you can see how easy it is that it's just a new QR code.

It's the same WalletConnect experience with a brand new QR code that you will see in stores, coffee shops, and some of them are already available today in Europe. Thank you so much. I have some time for questions. Hi, good morning. Um Great approach. Thank you. Um I'm I've been looking forward to actually doing payments with crypto.

How do you get it to the merchants? How do you get it to the online shop? Um because I checked before the trip here in Cannes, and there was a crypto-friendly Cannes website that said, "Yes, like 20 places you can buy." And most of them are the $1,000 per night hotels or the $500 per plate restaurants. How do you get it into a wide market? I think that's that's I think that building the foundation is part of it, of course, but how do you get it out into the market? Yeah, that's a very good question and a very strong aspect of our strategy of go-to-market, where contrary to prior solutions, not only we are supporting every possible wallet, we're also

supporting every possible payment service provider. Instead of actually going directly to merchants, and this is something that we've done last year, we would actually go to the directory to merchants, we would give them a dedicated point-of-sale machine for this particular payment solution, but every single merchant would say the same thing, which is, "I already have a point-of-sale machine. I want your crypto payments in my point-of-sale machine." And this is why we then initiated conversations with existing payment service providers so that we are not actually distributing it to merchants, they're distributing to our existing consumer bases. And one of the largest POS machines in Europe is actually Ingenico, and they already support WalletConnect Pay. They were one of the first ones to actually

participate in WalletConnect Pay, and now we have a couple more across the world in Singapore, Nigeria, and Argentina who are going to roll out in Q2 as well. So, our strategy essentially is going to the payment service providers that the merchants already use rather than go to the merchants to actually, you know, use our machine. Hey, thank you. Great presentation. I love WalletConnect myself. Installed it in all my apps and my projects, and it works very well. But one thing that I think we are still missing for the adoption is of course privacy.

You mentioned that uh there's many layers. Of course, the distribution of stablecoins is important. It's a chicken of the egg problem, where if people don't have stablecoins, there's nobody to accept them. But even when everybody has stablecoins and wants to spend them, it is important for merchants to protect their privacy and don't basically make their business public to everybody. How are we solving the problem with WalletConnect? That's a great question. And one of the things that I've presented here is what WalletConnect Pay does today. WalletConnect Pay accepts any token in any chain. That means that you can pay with the tokens that you have in your wallet, and the merchant can accept in other tokens. So, we do what do we call just-in-time swaps, and we also do

just-in-time bridging, so we could move from one chain to another, but we do not have a built-in privacy solution. We will always be dependent on the privacy solution that's available on the chain. However, our team is a very dedicated engineering team that's already researching privacy solutions, and we actually have a couple of talks available today at our conference at WalletCon, where we actually go in deep tech about the privacy solutions that we're exploring about that. So, while this is an active research, it will be available about the actual product directly, but it's not available in today's solution.

Awesome. Thank you so much for your questions, and thank you so much for your time. Have a great evening, and enjoy Cannes.