RETHINKING PAYMENTS

Crunchfish is rethinking retail online, offline, and cash payments by enabling resilience and payment service availability on layer-2, regardless of network connectivity issues or server outages. From rural merchants in remote areas to urban customers impacted by network congestion or service disruptions, the ability to pay no matter what is rapidly becoming an essential feature of modern financial ecosystems.

LAYER-2 WALLETS

Wallets are the issuing components in resilient payment systems, allowing users and merchants to make and receive resilient layer-2 payments securely. In wallet-to-wallet scenarios, the payee can pay forward without having to synchronize online. The Crunchfish Digital Cash Layer-2 Wallet is a secure and scalable component that executes within a Virtual Secure Element providing a software-based isolated runtime execution environment.

TERMINALS AND GATEWAYS

Terminals and gateways are the acquiring components in resilient payment systems. As integral components of payment networks enabling any user that can make payments online with the ability to also receive payments offline. The software-based terminals may also be integrated with merchant POS terminals. The software-based gateways may be integrated in the centralized backend of the payment networks and at distributed backend servers at the payment application providers. Collectively they form an interoperable acquiring infrastructure of resilient layer-2 payments ensuring that payees and merchants can seamlessly accept payments regardless of network connectivity or server outages from any layer-2 wallet.

LAYER-2 SOLUTION

The Reserve, Pay, and Settle approach is a layer-2 solution that augments the underlying Layer-1 payment system by adding desireable design objectives, e.g. Security, Scalability, Resilience, Privacy, Interoperability, Universality, Seamlessness, and competitive cost levels. The reservation mitigates credit risks for layer-2 payments with digital IOUs that settle on the layer-1 payment network, leveraging the distributed core banking systems, rather than adjunct centralized systems for reconciliation.

DEEP FINTECH COMPANY

Crunchfish is a deep fintech company providing a patented resilient payment solution designed for payment networks and payment service providers respectively. The company’s Digital Cash solution enables survivability in the face of failure due to fluctuating network connections and server outages. Crunchfish enables seamless, interoperable, and resilient payments by striking the perfect balance between security and scalability.

Rethinking Payments

“They say the shortest path between two points is a straight line. But what happens when the path is blocked? The river never stops flowing. It bends. It finds its way around. It takes a detour – not because it wants to, but because it has to. What looks crooked from above is the most efficient path for water. Nature adapts. It doesn’t give up. So do we.

Some bonds cannot be broken. Some transactions are meant to happen – regardless of time, place or logic. The universe finds a way. When all else seems impossible. When hope is gone. Two points that are meant to meet will. Sooner or later.

By Crunchfish’s way there is survivability in the face of failure. Now also on the application level by deep fintech from Crunchfish.”

– Joachim Samuelsson, Crunchfish CEO

In today’s financial landscape, end users and merchants rely on a variety of payment options—cash, cards, and online methods—to facilitate transactions. Each of these payment methods offers unique advantages, yet they also come with inherent limitations that can hamper the overall transaction experience.

Digital Payments:

Digital payment options, whether through e-wallets or mobile apps, have gained immense popularity. They enhance convenience and speed, but the reliance on a stable internet connection can be a barrier in various contexts. Digital payment systems can also create challenges regarding user privacy and data security, particularly when sensitive information is transmitted without adequate safeguards.

Card Payments:

Card payments offer convenience and security but are not without their drawbacks. There is a credit risk for offline payments, and for mobile card payments it is typically not even allowed without internet connectivity. they rely heavily on third-party processors for authorization and settlement. This dependency can lead to transaction failures or delays—especially during network outages. Furthermore, card transactions incur high card, transaction, and terminal fees, placing a strain on both merchants and consumers.

Cash Payments:

While cash is widely accepted and provides immediate value exchange, it poses significant challenges for merchants. Handling cash involves logistical burdens such as ensuring sufficient change, managing security risks, and dealing with daily cash reconciliations. Additionally, cash transactions are not easily traceable, making them less favorable in an age that demands transparency.

Crunchfish Digital Cash Layer-2 Solution:

A Transformative Approach

Crunchfish’s Layer-2 solution revolutionizes the payments landscape by augmenting traditional cash, card, and online payment methods. By rethinking how we handle online, offline, and cash payments, Crunchfish enables a seamless transaction experience that enhances resilience and adaptability.

With Crunchfish, transactions can be conducted on a layer-2 without sacrificing security or user experience. The solution incorporates layer-2 wallets, terminals, and gateways that allow users to make payments anywhere, anytime—whether connected to the internet or not.

The Crunchfish Layer-2 solution helps merge the convenience of digital payments with the practicality of cash. Digital IOUs are used to facilitate secure transactions, ensuring that both merchants and consumers can trust the integrity of their payment methods. This also extends to interactions with various payment networks, allowing for comprehensive interoperability.

By utilizing an isolated runtime execution environment, Crunchfish ensures that payment data integrity during cryptographic operations, at rest on device, and in transit between clients and to servers. The certified high level of security builds trust in both online and offline environments, empowering users to transact confidently.

Lastly, Crunchfish’s revolutionary layer-2 solution can be implemented incrementally in an evolutionary way, one payment network, payment application, and end user at the time. The competitive business model is attractive for all participants and stakeholders, promoting broader adoption and financial inclusion. As we move forward in an increasingly digital economy, the Crunchfish Layer-2 solution stands as a pivotal tool for rethinking the way retail payments are processed, making the payment experience smarter, safer, and more resilient than ever before.

Rethinking Online Payments:

Survivability in the Face of Failure – A Packet-Switched Approach

Just as the internet transformed digital communications in the 90’s into a much more robust and resilient packet-switched approach introduces Crunchfish’s patent-pending Trusted Application Protocol (TAP) resilience to the application layer of, for instance, digital payments by designing payment traffic with a packet-switched communication architecture inspired by the TCP/IP protocols that built the internet. TAP ensures that payment applications function reliably even during backend server failures or disrupted network conditions. TAP works across proximity protocols (QR code, Bluetooth, NFC) and remote protocols (internet or SS7 signaling), making it transport-layer agnostic, ensuring secure end-to-end communication between clients as well as between clients and servers. With private key in a trusted client in a PKI-based architecture, TAP ensures secure communications in between clients and between clients and servers using software-based isolated runtime execution environments by virtual secure elements in the clients, offering unmatched security and scalability for both offline and online environments.

Rethinking Offline Payments:

Reserve, Pay, and Settle with Digital IOUs

Built on a patented architecture, the Reserve, Pay, and Settle (RPS) model allows payment ecosystems to operate seamlessly offline by issuing Digital IOUs locally in trusted client devices.

Crunchfish’s signature offline payment solution enables digital payments to function even when disconnected from backend systems or the internet. Consecutive offline payments on layer-2 are also supported by Crunchfish Digital Cash Layer-2 solution.

These IOUs are reconciled securely when connectivity is restored, ensuring trust, scalability and interoperability across domestic and international payment networks.

The patented solution is payment network agnostic and even makes diverse payment networks interoperable regardless if it is real-time payment networks (e.g., UPI, Pix), card networks (e.g., Visa, Mastercard), CBDCs, mobile money, stable coins, other cryptocurrencies, or closed-loop payment systems.

Rethinking Cash Payments:

Returning Change Digitally

By providing digital change instead of coins or small banknotes, merchants can solve this pain point while reducing operational inefficiencies and logistical overhead. Leveraging Crunchfish’s offline payment technology, merchants sign Digital IOUs for returning exact change digitally, and customers only need offline terminals to receive the change. This decreases logistical challenges significantly surrounding coins and small denominations. Reduces cash handling costs while simplifying the payment experience, it provides a natural fit for Central Bank Digital Currency (CBDC), allowing physical cash-backed change to be issued as CBDC.

The Groundbreaking Approach:

Crunchfish augments any underlying layer-1 (L1) payment system by enabling multiple desired design objectives with its groundbreaking, modular, packet-switched layer-2 (L2) architecture.

An L2 packet-switched architecture with wallets, terminals and gateways mitigates the inherent vulnerabilities in traditional L1 online payment systems. For online payments it provides resilience as well as load balancing as congestion can be avoided by batch processing during peak load. For offline payments, it brings many new use cases and for cash payments it enables return of change digitally.

The modular approach: The L2 solution respects the roles and responsibilities of payment networks and payment service providers respectively by clearly separating the L2 wallet, terminal and gateway modules. This brings flexibility, scalability, and healthy ecosystem competition.

The layered approach: An L2 solutions built on top of L1 payment systems provides multiple key design objectives, such as resilience, privacy, scalability, and interoperability, by enabling off-chain processing while still achieving reconciliation and settlement on the underlying L1 payment system. Any L1 Payment Networks can be augmented with a L2 solution. Hybrid architectures, e.g. a CBDC, card network or realtime payment system can be augmented by a L2 solution to achieve maximum scalability, security, and resilience.

The packet-switched approach: Integrating a packet-switched architecture for a payment network ensures survivability in the face of failure, which is especially important for high-volume payment networks as it brings load-balancing to overburdening centralized servers. Bringing packet-switching to the higher-level application layer is just as groundbreaking as when the internet delivered packet-switching to the underlying communication layer.

The privacy approach: Privacy should be offered for all payments, not just offline payments, by using banks and intermediaries to reconcile and pay for their end users by proxy. Offline use cases may provide complete anonymity if that is desired by the financial regulator.

The universal and interoperable approach: By augmenting an underlying L1 payment system with an L2 solution it may work across devices, proximity methods, geographies, and demographics as well as cross-systems, cross-networks, and also cross-borders.

The seamless approach: A hybrid payment system merges transactions that has been cleared offline in L2 with a subsequent L1 online settlement. The future of digital payments hinges on balancing cost, resilience, and seamless integration, bridging traditional infrastructure gaps while gearing solutions for next generation financial landscapes.

The superior approach: Crunchfish shows with its Digital Cash L2 solution a viable way forward with its groundbreaking, modular, and packet-switched architecture that augments any L1 payment system with multiple desired design objectives.

Further technical detail may be found under the other menu items or in any of our whitepapers.

Beyond Payments:

Market Potential for Crunchfish’s Innovations

Beyond its innovative contributions to payments, Crunchfish’s patented and patent-pending innovations have the potential to solve critical challenges across a wide spectrum of industries and applications. This was emphasized with Crunchfish previous tagline “Trust in Clients” outlined in a whitepaper released exactly one year ago. While the company remains laser-focused on payments for now, its innovative patented and patent-pending technologies — such as the Trusted Application Protocol (TAP) and layer-2 packet-switched architectures — can be deployed across broader markets, including:

Authentication and Identity Management: Enabling secure, offline authentication for enterprise systems, digital identity programs, and device-to-device communications.

IoT and Decentralized Systems: Enabling secure IoT data transmission or operations in decentralized systems using proximity-based interaction or offline methodologies.

Mission-Critical Communications: Providing resilience for offline communication channels in scenarios such as disaster recovery and defense operations.

Although these applications represent future revenue opportunities, Crunchfish is focused on payments today, given the enormous market opportunity that payments represent as one of the most evolving and innovation-driven sectors globally.

Crunchfish Digital Cash Timeline

Our core values

Curious

An inspired curiosity drives us to explore the world, adapting technology to human needs.

Creative

Our creative minds combined with deep technical know-how originates radical new ideas and innovations.

Caring

We care about the society we live in, customers and colleagues, always developing sustainable relationships.