Forums such as Reddit and Quora are buzzing with questions on digital payment network InitiativeQ. Is it free of cost? Is it a pyramid scheme, or just another way to collect data?
Saar Wilf the company's founder and an ex-Paypal employee speaks at length on InitiativeQ in an interview with Moneycontrol.
According to Wilf, if Initiative Q succeeds, it is expected that all its 'Qs' — the unit of currency on the digital payment network, will eventually be granted a value of roughly one US dollar per Q.
The company claims to be the future payment network challenging the mainstream payment systems of the world. One can join the network through invites only.
Here are the excerpts:
Q. How InitiativeQ came into existence?Wilf - Everyone knows you need a payment system and what needs to be done to build it. But how do you get the people to join? And all this Bitcoin and cryptocurrency craze made me think maybe there is a way to make a payment network that coupled with a currency solves both problems.
Basically, people now understand that currencies do not necessarily need to created by governments, and they understand that the currency that is widely adopted can be worth a lot, even trillions of dollars. So if you build a new payment network, a strong one with the technology that everyone knows needs to be built and coupled it with a currency — that currency will be worth a lot.
So let's distribute a currency for free to anyone who registers or does actions that promote the adoption of the network that basically closes the loop. So the distribution of the currency makes people join the payment network, creates critical mass and therefore allows for the deployment of advanced technologies, allows to be successful and widely adopted and then the currency gets high value and people who are early to join enjoys the benefits
Q. How are you going to earn money through InitiativeQ?
Wilf - So basically, this will be a payment network and to transact on a payment network, you take transactional fees from payments made through the network. Those fees will be dramatically lower than what we pay today because the technology will be much more suited for current transactions requirements. So that will be our earning resource.
Q. Why InitiativeQ is compared with a pyramid scheme (on forums)?
Wilf - So there have been probably thousands and thousands of companies in the past that told you that you can make money fast with no risk and this is very common in scams. People are very right to be suspicious when they see an offering that has the potential of being in value without risking anything. If you hear that one-liner, it sounds very suspicious. So that's why people are constantly trying to find what's the catch. What are we trying to do? What is the evil scheme here? But when you go into the details you understand this is a very unique situation where you are creating a new kind of money, a new kind of better money.
For it to succeed, you must have millions of people that own it and want it to succeed and be accepted. So this is a very unique situation were the only way this can work is by distributing this free money. It is not yet money but maybe in the future it will be. So this distribution of free future money is the only way this can work. So yes if you look at it as a one-liner it sounds very suspicious. But if you look at the economics, the theory and the concept behind it, and what payment networks need to succeed, you understand that this actually makes sense and there is really a way that you may gain here something without risking anything.
There is no guarantee this would succeed but the risk is negligible and an up-side is possible.
Q. Are you currently selling it free through invites?
Wilf - Yes.
Q. When was InitiativeQ launched?
Wilf - First, it was launched quietly. Around 5 months ago, we only sent it to a few friends to 150 people we know and they sent it to their friends and so on ago. We did not do any advertising, PR or anything. Today we have over 100,000 people everyday joining.Q. How many people have joined so far?Wilf - Over 3 million. Most of them joined in the last month or two.
Q. Is InitiativeQ based on speculations?
Wilf - Yes. It's a new thing. We don't know if it will succeed. We are going to work hard to make it succeed. We need people to want it to succeed and want people to push it, to adopt it and if they believe in it, it will succeed and if they don't believe in it that it won't succeed. It's all a trust game.
Q. Will InitiativeQ be like Bitcoin which is crypto-to-crypto? How would I withdraw or deposit money through Q?
Wilf - What we do which is different from cryptocurrencies in that it is not a decentralised system that allows you to circle that regulation. The system is completely compliant with all regulations and we are trying to work with governments to have this.
The idea is not to create some anonymous decentralised network that allows illegal transactions or money laundering. That's not the idea. The idea is to make it a mainstream system that can be used by your grandmother, and be fully compliant with all regulations. It is an alternative to a credit card.
Q. What you do with the data you have collected through the invites?
Wilf - So I will be very clear. We cannot use the information other than for promotion of the network. From building the network and communicating to people what they need to do, what's the next step and so on. We will not send spam, or sell the e-mails and if InitiativeQ fails to become a success then we will destroy the information. We have no interest in doing any marketing tricks, that's not our business. We are into payments. I personally have no interest in doing something that betrays the trust of people.
Q. How will you explain the government about Q ?
Wilf - First of all, I don't need to explain to the government. Each government has it rules. In general, there is no rule against creating a new currency. That's fine if you want to create a new currency. That's not illegal. All you need to do is to verify and make sure that your network is not used for illegal activities and laundering money. We will basically comply with these regulations and make sure that we report suspicious transactions as required.
In the long run, I think in a sense we are also helping governments in improving payments because our currency is fully digital, so you can't convert it to paper. It's digital money, which means it's much harder way to transact illegally. The main problem in payments, money laundering, is that you can't check cash transactions. We can track all transactions and we will provide the government a much better way to combat illegal activities. Of course, we do not share the users' information unless the government gives us a court order and so on but in general, it is better for the government to combat illegal activities, money laundering and so on.
Q. After the completion of your target of 30 million users, what is your next step?Wilf - So the information we will need will be of two types. One is the information required by regulations in order to prevent money laundering. So we will need to identify customers. We need to have a better method of identification than e-mail, which is what we have used so far. Before you will able to use Qs, you will probably need to undergo some better identification. Another type of information is it you want to transfer Qs and exchanged it for other currencies. If you want to buy Qs with Rs or exchange it, we will need a bank account in some way to allow you to exchange with other currencies. These are the kind of information that could require in the future.