tmacshaq Hey! Thanks for your excellent questions.
How do you deal with currency fluctuations in 60 minute checkout window. If value of XLM drops 10% the seller takes the loss?
Great question. Thanks. In short, we use a community pool to mitigate price fluctuations. The settlement price for the merchant is guaranteed. I coincidentally answered this in depth on a Reddit thread a few days ago.
From your website it seems like you're operating a centralized business and exchanging currencies? The legal aspect of this is a nightmare especially since you exchange currencies. To operate in AMerica you need a money exchange license and each "exchange" actually involves capital sales. How do you plan on keeping track of all this?
This is a great question and a big topic for us internally. Basically CQ's initial go-to-market strategy is defined/limited by regulatory requirements and Stellar's current and future anchor integrations.
For CQ two questions are at the core/top of decision making: a) can we operate legally in a market and b) is there a good and liquid fiat anchor to make market entry feasible?
Regarding a), there are basically two options: get licenses for each single country/market or find cooperation partners and use their licenses on a license-as-a-service cooperation model.
And for b), we follow the anchor development process which seems to have a focus on Africa, Latin America and Southeast Asia. That also means we don't accept merchants from the US and EU currently. They can register but not fully operate on the platform yet.
We don't actually see it as a "nightmare". It's a process with very clearly defined requirements and there are several options to stay compliant in different jurisdictions.
Last point- until you provide a traditional on ramp (Paypal, credit card etc...) it will run into the same problem as other payment projects like StellarPay and SWPlug- no one will use it because very few people have any Stellar assets to start with. Its not worth the integration effort for a retail shop for something that only does Stellar.
Completely agree and our product is actually fundamentally different from the ones you mentioned. CQ accepts native Bitcoin, Ethereum, Litecoin, and XRP alongside any asset on the Stellar Network. That's actually one of our most exciting features. We work with crypto anchors to convert native BTC into tokens on the Stellar Network during the payment process. Once the funds are captured we use the SDEX to convert them into the merchant's preferred settlement currency.
When a customer selects Bitcoin on the checkout page, he is actually presented with a native Bitcoin deposit address (given by one of our anchor partners) and sends native Bitcoin to that address. In fact, he is probably entirely unaware that Stellar is involved. All he knows is that he sent Bitcoin to some Bitcoin address.
We published a blog post on that topic, which covers the process in more detail. Another blog post here explains it even more.
Our competitors are BitPay, Coinbase Commerce and similar companies. We think that working on Stellar gives us a competitive edge over them because of its anchor system. We can add new crypto payment options as well as fiat off-ramps in a snap, as soon as they are anchored on Stellar by some trusted entity. It takes a whole lot of resources and jumping through hoops for our competitors to add new currencies. For us it's just another interface to SEP-6/24/26 compliant anchors. As the Stellar Network grows, so do we.
On a side note:
We started working with select merchants since our soft launch/POC release a couple of weeks ago and it works really well so far. In our experience, almost all sales are done in native Bitcoin. Disappointingly, we haven't seen a single Stellar payment yet. You already mentioned that this isn't a big surprise. According to this source, Bitcoin has around 0.75 million active addresses a day and Stellar only has 75 thousand active accounts per day. The Stellar ecosystem is still very young but moving super fast - we're excited to contribute.
I think it's worth pointing out that, in a sense, COINQVEST uses the Stellar Network in the very fundamental way it was originally imagined. Our platform is a tool that takes an arbitrary asset from some entity, pulls it onto the network, transforms it, and finally takes it off the network in a different shape, to a different entity.