This proposal would fund the creation of a Dash-integrated payment gateway targeting the legal cannabis industry in the US through partnerships with the 2 largest cannabis POS providers. The gateway package would include a loyalty program, customer offers (e.g., discounts, free samples, customer retention), federal and state tax reporting, supplier/employee/vendor payments using Dash, reconciliation reports, local sales tax calculation and payment submission, and onsite Dash ATM. Link to pre-proposal document: https://www.dropbox.com/s/7j9p4q0v3kshren/Dash Proposal - Alt36 + Dash Payment Platform.pdf?dl=0 If you have questions or concerns that you would like a response to please include @ThirtySix in your comment to help ensure we receive notification. PRODUCT36 (Dash payment project by Alt Thirty Six) Alt Thirty Six is a financial technology company specializing in data intelligence and digital payments. We create transparency into payment ecosystems by providing valuable business intelligence from transactions. Our simplicity and ease-of-use allows business managers and executives to make real-time, critical decisions to lower fees and identify opportunities for increasing revenue. Our main verticals are cash-based, cannabis retailers having difficulty accessing banking and payment services. In 2016, cash-based cannabis sales were approximately $6.7 billion and estimated to hit $11 billion by 2020. Federal regulation has resulted in cash-only transactions between retail merchants, suppliers, and their customers with limited or no access to banking institutions. The negative effects of cash handling include: increased time investment, issues paying suppliers/vendors/employees and excessive fees which reduce their bottom-line. The Situation As of today, there are limited places that consumers can use digital currencies. The delay between payment and confirmation with other digital currencies is too long to facilitate transactions at the point-of-sale, and we feel strongly that Dash is the future of digital currency because of its instant transaction technology which will enable very fast point-of-sale transactions for our merchants. Dash will be the exclusive digital currency in our payments platform, which will also include traditional electronic payment methods for industry verticals that can access them. Regarding traditional payments, we know that merchants are leaving money on the table with transaction and processing fees and see the market opportunity for digital currency options. Our goal is to help merchants save as much money as they can on traditional payment fees, and also give them the option to start using digital currency to save even more on their transaction costs. United States card issuers (Visa/MC) and the issuing banks (BofA/WellsFargo/Chase) generate over $30 billion annually from interchange fees at the increased expense of organizations and merchants. Interchange fees are those fees set by the network, charged to acquirers, and received by issuers as part of a debit or credit card transaction. With traditional payment methods, there are significant costs associated with a transaction. Also, credit cards are not even an option for many businesses and emerging industries. Chargebacks are also very costly. For our cannabis merchants that deal with high volumes of cash transactions, cash-handling costs can represent approximately 10-15% of total revenue generated. Cash handling costs exceed the cost of payment cards - the merchants need trusted personnel to handle the money, and also armored trucks to transport the cash (which include fixed costs per dispatch, plus a percentage of the volume transported). On top of that, business bank deposit fees can be up to 3% of the deposit, and may require multiple bank drops to keep each deposit under a daily threshold (e.g., $10,000 per bank per business day). Paying suppliers is equally costly to withdraw and transport cash. Adding Dash to our payments platform would result in the extreme reduction in the cost of transacting payments and would save millions in industry overhead costs for merchants and their suppliers. Issues with Traditional Payments Today’s enterprise technology and payment processors have created excessive costs and very poor experiences for merchants accepting electronic payments. As a result, many retail executives and business managers lack the understanding and knowledge about electronic payments to make cost reduction strategies that will have a significant impact on their business. Issues such as outdated technology, confusing information, and time-consuming processes can cost companies millions of dollars each year. Digital currencies can address much of the cost issue, but there are many challenges to accepting and holding digital currencies, such as tax accounting and reporting. Another issue we see is the fact that currently, digital currencies have an inability to access traditional financial tools. Merchants that are currently accepting digital currencies have many business issues such as: more bodies to reconcile the traditional payments and digital currency payments, legal issues, and tax issues. Two separate systems will throw off the business’s financial reporting when a merchant wants to print a report on what their total revenue for the day was - and we have a solution for that problem which is discussed below. There are large and valuable markets that we will serve. Our initial channel strategy is to partner with existing industry-specific point-of-sale (POS) software providers to up-sell their existing customers with our payment solutions. We are also evaluating other channel strategies to continuously broaden our customer base. Alt Thirty Six believes that digital currencies are the next phase in the evolution of money, and we want to add Dash as the payment option to the Alt Thirty Six payment platform. Alt Thirty Six strongly believes that this will be a win-win for both Dash and Alt Thirty Six - and that together we will both become stronger. Adding Dash to our payment platform will significantly increase the rate of adoption of Dash as a currency. We have partners and merchants that want to leverage Dash as a payment option immediately. Adding Dash as a payment option will help them save a large sum of money on cash-handling costs, along with payment processing and transaction fees. The Alt Thirty Six payment platform will encourage rapid adoption by making it extremely simple for retailers to transact in the Dash currency. Issues Accepting Digital Currency 1. To process digital currency payments, merchants utilize completely different channels and reconciliation methods than traditional payment methods, which results in two reconciliation processes; 2. Tax reporting is extremely difficult for state and federal compliance; 3. Managing funds and converting to a fiat currency is challenging; 4. Two completely separate point-of-sale (POS) software solutions must run in parallel if a merchant wants to accept digital currencies. This causes additional work, legal issues, tax issues, and throws off the business’s reporting when a merchant wants reconcile daily sales, etc. In short, current solutions are inadequate for enterprise customers. The Solution: PRODUCT36 Ken Ramirez, CoFounder + CEO Lauren Murphy, CoFounder + President Our total solution will be the first to apply a fully-integrated payment gateway for online and merchant purchases that will enable digital currency payments and traditional payments to have a single set of reports, reconciliation processes, tax reporting, loyalty programs, etc. The product development has been segmented into 2 stages to allow for an expedited launch date. Phase 1 includes the development of the Dash exclusive digital currency application and Phase 2 includes the development of the traditional fiat application to support traditional and digital currency. Project Summary - continued on 2nd post.