Navigating the Future of Offline Payments with Crunchfish – Joachim Samuelsson [Episode #15]

Podcast Intro (00:00:00) – Hello. Welcome to P.I.T. Exchange, a podcast by Currency Research. Join us as we discuss the latest in payments, innovation and technology with the industry’s most innovative thought leaders. Today’s payments are changing and moving around the world faster than ever before, and P.I.T. Exchange gives you the knowledge and insights to keep up. Sit back and relax as we join Currency Research, exchanging ideas with today’s special guest.

Shaun Ferrari (00:00:33) – Hey, everybody, welcome to the next episode of The P.I.T. Exchange. We’re live here in Kuala Lumpur. Well, live, reporting live here in Kuala Lumpur. thanks for joining us again, my guest right now is, welcome from, Crunchfish, CEO Crunchfish. Yeah. Thanks for, thanks for joining us and chatting a little bit. It’s been an interesting, day and a half or two, two days that we’ve had. Now, I’m hearing a lot of different things on digital currencies and AI and a bunch of stuff, and maybe helping the audience understand a little bit about Crunchfish, what it is you do.

Shaun Ferrari (00:01:07) – And, we’ll go from there.

Joachim Samuelsson (00:01:10) – Yeah, yeah, thanks. Well, we’ve come up with a new pitch, for, for this show actually, that was quite recently developed. We, we come from the area of offline payments, and that’s a kind of tough one to, how do you solve that? And everything we’ve learned comes from that problem. But we recently realized that what we have done and what we’ve developed to solve offline payments actually has a more general use, because there are there are other use cases that benefits also from essentially what we have is a way to be able to trust the mobile client, the what you what a user hold in their hand in order for an application to trust that that’s what we bring, and we do it in a way which is unique, it’s that it’s device agnostic. Because if you are a bank or if you’re a central bank, or if you’re any application provider, you don’t want to have anything which is device dependent, because then you are all right.

Joachim Samuelsson (00:02:16) – Sorry, you have the wrong phone. We can’t serve you. You really device agnostic is important because you want all your your clients that you currently have is not up to what, what device you’re wearing. But essentially we we bring is, is that we have enough security to even handle money like offline payments on a device, but also doing a device agnostic that, that, that is that that’s the that’s the sense. So the whole tagline now is trusting clients. That’s what we’re talking about. That’s what we do.

Shaun Ferrari (00:02:45) – Okay. No that’s awesome. And you spent quite a bit of time here, you know, talking about in terms of offline payments, whether that’s a a device or a software or a or where, where that kind of, feature resides or functionality resides. Talk a little bit about that. How we should think about whether that’s, you know, offline payment, device centric or kind of software centric?

Joachim Samuelsson (00:03:08) – Well, yeah, I think, I as I said, I think it should be device agnostic in the sense that, then it has to be in software.

Joachim Samuelsson (00:03:17) – But and a lot of people have heard, and I think that’s the common understanding that, a software based solution, well, that’s not safe enough, but there are software based solutions and there are software based solutions. And what we have is actually a, we have a vault. Our application software based application runs within a vault. And that vault, that is what runs in what called the rich execution environment. The vault itself and what makes this unique and strong is that the protection mechanisms for the vault itself resides within the vault. So you always have if you’re going to crack this, it’s a bit of a catch 22 situation. You have to crack the vault. But in order to crack the vault, you have to get to the protection mechanism. And they are inside the vault. So that extra layer of security makes our software based solution superior, because essentially what we are we have is, is something that emulates how sort of a hardware chip works. But we’ve done it in software.

Joachim Samuelsson (00:04:30) – And the reason why you want to have this software is that you you can tie them this, piece of security, you can tie it tightly to an app and that’s what you want. You want security to be as tight to the application itself, because then wherever the app goes, it goes with that increased security. So you can go anywhere device agnostic, meaning you can put it on app store or you can put it on Google Play. And that’s if you’re an application provider. That’s what you want. You don’t want oh, I need to put it on, specific Samsung device or a specific iOS device or specific this or that. Because a hardware based solution, which a lot of people assume is what’s needed. What these people selling these solutions don’t tell is that, in order to distribute the solution, they have to make agreements. And and it’s not enough to make the agreement with the device manufacturer. They have to go even deeper. It’s per model. They have to go to the product manager for a specific phone model to get it in there.

Joachim Samuelsson (00:05:38) – And you can think of if you even think of Europe. How many countries don’t we have? and how many diverse set of devices wouldn’t we have? And it’s very hard even to analyze and to just think that you’re going to do agreements with all these Chinese manufacturers, Korean manufacturers, U.S. manufacturers, Japanese manufacturers, you know, it’s a non-starter. So I personally believe that a hardware based secure element solution for offline payments should be dead on arrival. I it’s provocative to say, but that’s I, that’s that’s my honest belief because you can always try the solution in a test environment. You can test it out and you can see that this is secure and absolutely secure, but it’s not scalable because you can’t get it out to the user base.

Shaun Ferrari (00:06:28) – Why? and is it is it the technology that obviously it’s the technology that you’re providing that makes this possible, but the online or the software solution. But what’s taken? Why now? Like why why was it the hardware approach that kind of was the first approach considered in kind of this CBDC realm and now, like software is like is now?

Joachim Samuelsson (00:06:54) – Well, a lot of the security companies, well, if you look at the payment space, I think that payments is, is an online thing. You you the security is in the back end. When you have security in the background, you can write software based applications.

Shaun Ferrari (00:07:11) – I see what you’re saying quick.

Joachim Samuelsson (00:07:13) – You write them in this rich, world rich execution environment. It’s fine because you’re relying on that. So that’s there. It’s not good enough for it’s not good enough for, offline payments because all of a sudden you need to trust the client. But we are we are bringing in something where you can trust the client, even if it’s sort of device agnostic. So people then said, oh, if it needs to be this secure, well, it has to then be in hardware. But in a way, if if you look at the industry of mobile card payments, that whole industry is already aware that, putting the words on a standalone card to put that on or in a mobile is simply is not scalable.

Joachim Samuelsson (00:07:56) – So what? They’ve abandoned that model, and what they do instead is to put the card credentials in the back end is called host based card emulation. So that’s that’s secure it on the back end. But what is the drawback with that? Well that means that security is in backend, so if you come with your on a mobile phone and you’re going to pay, the terminal needs to be online.

Shaun Ferrari (00:08:23) – Right. You still need the online.

Joachim Samuelsson (00:08:24) – Yeah. So because you have written that SDK in, in rich world and the card industry. No. Yeah I know that that is not safe enough. So they they rely on them basically the backend the security of them. Yeah. On the, on the server side. And this is the interesting thing for us because as I said, we’ve learned everything we know from offline payments. But we’ve realized and I’m going to talk about that tomorrow on the Global Payment Summit. I’m calling it ACE. It stands for App Integrated Card emulation because just like offline payments needs to handle safely on device agnostic.

Joachim Samuelsson (00:09:05) – Same thing for these card credentials, and I make that app integrated just like I do for offline payments. And all of a sudden for 5 billion more my card applications. I have a superior solution for that in terms of security. So now I’m expanding my market space from before it was just offline payments. And quite frankly it’s in India is happening. Yeah ECB has been asking for it. But how long how that will take. But. It’s not really anywhere else in the world right now. Whereas mobile card payments, it’s everywhere. It’s tokenized cards, basically, but that needs a better security in order, because if we bring in that better security on device, all of a sudden what they could do, they can change the rules to say that the terminal can actually be offline allowing that. Because right now, if I come with Google Pay, if the terminal is offline, I can’t pay, I’m not gonna have it. Yeah, exactly. So, so so all of a sudden I think we are moving from just being offline payments to also other use cases.

Joachim Samuelsson (00:10:14) – And one really good example in the payment space would be mobile card payments.

Shaun Ferrari (00:10:19) – That’s a great example because I was thinking as you were talking I was like, well yeah, how is it different than, you know, Apple Pay or whatever when I touch something. But you’re right, the terminal has to actually be communicating for that. Exactly. For that to work.

Joachim Samuelsson (00:10:30) – Yeah yeah yeah.

Shaun Ferrari (00:10:32) – Yeah. No that’s amazing. So I think it’s a really exciting product. And I know you also announced some new something new this morning, right. There was a press release that came out.

Joachim Samuelsson (00:10:41) – Yeah. Well yeah.

Shaun Ferrari (00:10:42) – Say a few words on that.

Joachim Samuelsson (00:10:43) – Yeah sure, sure. the, it’s about, that’s is the word in English program programmability. Programmability.

Shaun Ferrari (00:10:53) – Yeah.

Joachim Samuelsson (00:10:54) – Big money programmable. Yeah. And it’s, programmability or programmable things. There could be programmable money. That means that the that’s typically, I would say for CBDCs that they, they can have social endowments that they want basically that hand out people to the population and say, but you can only use it for buying medicine or you can only use it to buy something, then that is, you have.

Joachim Samuelsson (00:11:17) – So put a purpose on the money so that you program what the money should be. That is one aspect of and I heard that ECB said we’re not going to do that actually. But I know in India they’re quite interested in that because they have a lot of subsidies to the population. In Europe, Said no to that. But there is another type of programmatic program out there.

Shaun Ferrari (00:11:36) – Yeah. Programmability. Yeah.

Joachim Samuelsson (00:11:37) – Thank you. Sure. Thank you. I would never be able to say that word. And that’s, programmable payments. This in the in the crypto world, this would mean this is smart contracts. It’s not about that. You have already pre pre-decided what the money should be used for. Instead you are putting constraints on when it’s settled. So this is rather when you are settling the payment rather than you are creating the payments for a certain purpose so that this is this is that and we the way we do things, which is sort of a unique way of doing things at Crunchfish are having these trusting clients and how we work.

Joachim Samuelsson (00:12:16) – We in combination with how we operate, we have brought in also now the aspect of smart contracts basically, but but we also in our next release of our software, we’re also going to support, programmable money as well. So we’re going to have both programmable money. And this is already now going into our next release. But the, smart contract side, the programmable payments, it’s going to come later, but we all are taking out a patent for that.

Shaun Ferrari (00:12:46) – Nice. That’s what we, I think, as you and I were, were chatting this morning over breakfast. And I know depending on the area of the world and the groups you’re talking about, there’s always a concern about programmability and putting constraints on what folks can do with a particularly if it’s a CBDC or what it is. And I think we were talking about it’s important to recognize that although the functionality might be there in your in your next release and your next software, it’s yeah, it’s you can choose obviously to not have it or to put any constraints on it. Yeah.

Joachim Samuelsson (00:13:16) – Yeah yeah. If we’re on programmable payments. Yeah. You it’s the extreme is that there is no constraints, right. Yeah. Exactly. And and, you on programmable money, the extreme is that you don’t put any constraints on it so that you can use it anywhere, but but it’s just, Yeah, but but we are just a tech platform. and we, we provide that to any payment service. we’re not anything. We’re not a company that where the payment goes via our service or anything. We’re just an enabler right about. So we we just are flexible. And then you configure whatever you want in that spot.

Shaun Ferrari (00:13:50) – Well, and I think the word flexible, as you just said right there is is what’s needed right now. Because the regulations on the designs for a lot of this stuff, as we’ve heard over the past couple of days here, from the regulators. Right. Everything’s still in flux. Yeah. there are people deciding how to design and how it should be designed, what the regulations should look like. So you have to build with that flexibility in mind.

Joachim Samuelsson (00:14:10) – Yeah, I agree I agree, but I, I wish if I had a one wish for, for the industry. Well, well yeah exactly. But my wish for the industry and that’s what I, you know, I was presenting yesterday and I my track session I because I think there are really there mistakes being made in how you design it. You could say we haven’t decided yet but I wish the industry technologically would understand really what would work. It’s no point in experimenting with things that, from a technological point of view, it’s dead on arrival. Right. And one thing which I’m provocative and I’m talky and I is I don’t think I would not believe on device on a, on a mobile device. Don’t think about hardware based solutions because that has I gave six reasons in my tracks session yesterday why it doesn’t work. And I and I really feel strongly about it because I the fact that that’s been so strongly advocated from big companies was made a lot of money on selling the, you know, the chips on, on standalone cards.

Joachim Samuelsson (00:15:08) – This is, this is causing a bit of delay of rolling this out. I think this is one of the biggest hurdles we have, because the solutions that are proposing are simply not, you can provision the solutions and and it’s just so many reasons why it is. It’s not a good idea. What I, what I believe that they’re advocating that, well we know the security on a chip and then they’re thinking of that chip is on the mobile phone as well. But a payment is the system. It’s not about just that myopic view on on the as the chip. And and also the thing that I’m telling also is that the chip would sit on a mobile phone and, and it’s, it’s in a, in an environment of a mobile phone where the payment application is unsecure. Talking to that chip, this is a completely different environment to have it on a standalone card which talks directly to a, to a terminal on the other side. And that’s this is a completely different setup than to have it internally within a device.

Joachim Samuelsson (00:16:10) – And the that’s not being told and needs to be told in order to. Yeah. As I provocatively also said, I think Crunchfish has the only working solution for smartphones that actually is scalable and secure for the payment industry and for CBDCs and the payments industry.

Shaun Ferrari (00:16:31) – Yeah, no, awesome.

Joachim Samuelsson (00:16:31) – When it comes to, you know, offline payments and things like that.

Shaun Ferrari (00:16:35) – Yeah, yeah which is a key aspect of of this.

Joachim Samuelsson (00:16:38) – Yeah. But cash is offline. And I think a lot of I was just in India and they were telling me, what are we working for is that we want our digital currency to sort of have as much, you know, if you work like cash, because if we replace cash going digitally, cash is such a unique way of paying with all its aspects, which is completely unique compared to the digital ones. Yeah, but the central bankers and I like them for that, that they cash is offline. So let’s we have to preserve that, cash is private. So let’s let let’s preserve that within reasons.

Joachim Samuelsson (00:17:13) – Because you can’t you can’t come with, you know, $2 million in a suitcase that, that is that doesn’t fly. And so but, but you can put limits on that. But under a certain amount I think it should the privacy should be there. That why should the states be allowed to spy on your pry on you what you do. I think it, it says human right to be private and and technology is possible to do that. That’s very important. Yeah.

Shaun Ferrari (00:17:37) – You know awesome. Amazing. Cool. Well, what do you think? we you spent a couple days here? Yes. There’s been some some sessions. There’s been breakout sessions. What’s been one of your one of your highlights? over the past couple days. I know there’s days yet to come so far.

Joachim Samuelsson (00:17:52) – Yeah. Yeah. No, I’m gonna say the quality of the networking. I’m, you know, this is the third conference I’ve been in, and, first time was last year. I went to Mexico. I came alone, and I didn’t know much people.

Joachim Samuelsson (00:18:06) – But now, you know, a lot of people come back year after year, and. And it’s good to catch up. What has happened? What have you done? And you. I met this fantastic, the it was called Featurespace. the AI analysis company, Aman, I had a long chat with him, and, we’re going to start, if we can, collaborating because we complement each other really well. The quality of that networking and getting that at the same place, I’m not personally, so much for listening to all the, some of the sessions I’ve been there, but but I for me, the network, the networking. Yeah, I think that’s for me that’s that’s the best thing. Yeah. but, but and then but but as I talked to Jens, your CEO. He said, obviously we need to have both things. Yeah. So so it is a bit dynamic, but we understand that networking is is absolutely important aspect of it.

Shaun Ferrari (00:18:57) – Yeah. And that’s one of the things that as, as Jens said, we have to have both because we are, you know, focused on the topic with the, the right people and the right size and kind of the boutique nature of this environment. Yes.

Joachim Samuelsson (00:19:09) – You’re getting the people here. Yeah. You know, the people. Yeah. So I must say I’ve, I’ve had so many quality and it’s if you’re not at an event like this, then it’s, it’s a lot of traveling and it takes a long time, and now I can, I have had so many this, this amount of meetings I’ve had now just over, what is the two days I’ve been here? Yeah. I wouldn’t have that in two months. Right. You know, and so that’s that that’s extremely efficient time for me. So I’m really glad.

Shaun Ferrari (00:19:36) – Awesome. Yeah. Well, great. Well excuse me. Thanks for taking the time to be here and chatting and and being here. And, we’re thrilled to have you and thanks for supporting.

Joachim Samuelsson (00:19:47) – I look forward to London now.

Shaun Ferrari (00:19:47) – Yes and yes. Look for these DCC. Yes. Thank you for that plug. Yes. Yeah. We’re going to be we, for those listeners out there, we’re going to be in London together again for the Digital Currency Conference and Central Bank AI conference. September and September. Yep. September 23rd. Yeah. so yeah, it’s going to be a great time.

Joachim Samuelsson (00:20:03) – I look forward and that’s closer to us, you know.

Shaun Ferrari (00:20:05) – Yeah. You’re, it’s almost local. Yeah.

Joachim Samuelsson (00:20:08) – We will be five people actually attending that that show because it’s, you know, it’s just up over the North Sea for us.

Shaun Ferrari (00:20:14) – And the topics, I mean, you’re I mean, as you said, I mean, you’re really focused in that digital currency space, which is what we’ve been chatting about. So yeah, cool. Looking forward to see you there. And thanks, everybody for listening. And, we will talk to you again soon. Thank you. Thanks.

Podcast Outro (00:20:28) – Thank you for listening to The P.I.T. Exchange, a podcast by Currency Research. Check out our upcoming events and publications at and join us for our next episode to hear what’s trending in payments, innovation and technology.

Another exciting conversation in Kuala Lumpur, Malaysia this week at Currency Research’s Payments Week.  We had the pleasure of speaking with Joachim Samuelsson, CEO at Crunchfish.   Our discussion centered around the company’s pioneering work in offline payments and their unique approach to device-agnostic security for mobile clients. The conversation provided a wealth of insights into the evolving landscape of payments technology, particularly in the context of digital currencies and artificial intelligence (AI).

The Importance of Offline Payments

Offline payments are transactions that can be completed without an active internet connection. This capability is crucial in scenarios where connectivity is unreliable or unavailable, such as in remote areas or during network outages. Joachim Samuelsson of Crunchfish emphasized the significance of offline payments in ensuring seamless and uninterrupted financial transactions.

Device Agnostic Security

Crunchfish’s approach to security is device agnostic, meaning their solutions are not tied to specific hardware. This flexibility allows their software to be used across various devices, enhancing accessibility and ease of integration.

Digital Currencies and AI

The payments industry is undergoing significant transformation with the advent of digital currencies and AI. These technologies offer new opportunities but also present unique challenges.

Networking and Collaboration

Joachim Samuelsson of Crunchfish highlighted the importance of networking and collaboration in the payments industry. Building strong relationships with other industry players can lead to valuable partnerships and innovation.

Embrace Flexibility and Programmability

With an interest in technology and finance, it’s essential to understand the potential of programmable money and payments. Explore how these concepts can be applied.

Focus on Security and Accessibility

Security and accessibility are paramount in the payments industry. Highlight the importance of device-agnostic solutions and offline payments.

Come and join us this September!

We encourage you to stay engaged and join us at our upcoming event, Payments, Innovation & Technology Week, London – September 23 to 26, 2024.  Exploring the latest trends and research in Digital Currency Use and AI Applications for Central Banks.  One week of cutting edge payments research, policy and technology education and networking.

Digital Currency Conference – September 23-24, 2024

Central Bank AI Conference – September 25-26, 2024


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