Continuing a trend that has seen financial institutions become more electronic, one of the few Black-owned banks in America, LeisurePay, seeks to combine the flexibility of blockchain technology with merchant services, becoming part of a system that could turn the financial world on its head. Interestingly, LeisurePay is targetting high-risk businesses, specifically, those at greater risk of financial loss.
Chargebacks
What singles out LeisurePay from other banks is that it invests in minority-owned businesses as a priority. CNBC notes that these companies tend to struggle with more loan denials than other businesses, as well as higher interest rates on loans. In addition, high-risk businesses are also subjected to a greater risk of fraud, chargebacks, and product returns, due to the nature of what they’re selling.
For these reasons and more, Black businesses are in decline in the United States. The previous source notes that the number of minority-owned banks or financial services companies fell by more than 50% in the near two decades between 2001 and 2018. Similarly, Business Insider claims that companies run by “underrepresented” groups are 14% more likely to report low sales.
A Honeypot
All this makes banking a bit of a honeypot for Black entrepreneurs. While this might seem like a negative thing, as there are only so many businesses and customers to go around, there are still plenty of different niches left unfilled, such as payment processors for people with no bank accounts or to help serve those who’d rather do all their banking anonymously.
Granted, it’s fair to say that Visa, MasterCard, and PayPal are still the self-appointed kings of the payments world but some areas of business have been getting along with other processors too. In video gaming, for instance, the Steam storefront accepts POLi exclusively in Australia. This naturally makes things easier for people living in the country, especially those who don’t have credit cards.
Also in entertainment, the social casino website Pulsz Casino has added Skrill to its catalog of providers. Skrill is a processor much like LeisurePay, in that it allows merchants to provide more options to customers. Pulsz Casino lets players buy coins to play Vegas-style slots and table games. Explaining the process in full is this recent article on BonusFinder. In brief, though, via Skrill, Pulsz can offer more than 100 payment methods.
J.P. Morgan
LeisurePay seeks to take advantage of something known as a stablecoin, which is a type of cryptocurrency that’s “pegged” to a more conventional currency, like the dollar. This means that they’re less likely to fluctuate wildly in value like Bitcoin sometimes does. The company claims to have “counter-culture experts” in its midst, suggesting that its use of blockchain and crypto might not be the last of its experiments in the space.
According to the travel website UpgradedPoints, the number of transactions completed by electronic means like crypto and/or Apple Pay could account for almost all payments by 2024, topping 80%. However, as 57% of payments in 2020 were made with some physical card or another, the previous figure seems a little optimistic. So, for now, the more conventional bank J.P. Morgan remains the highest volume processor in the United States.
Whether LeisurePay can truly break down barriers for minority-owned businesses remains to be seen, especially in a landscape that seems unduly hostile at present. In any case, it’s a fresh step forward.
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