Paxful folks are the best!

Ingenious problem solvers, honest students, and super patient. We really are thankful to have such an awesome community to serve. Now lets talk about where I, Ray the CEO messed up and why I am so sorry.

Super Long dispute times…

Paxful does over 40 million USD a week in trade volume. Our data is public and despite us have a lower volume than the other crypto p2p platform, we do many more transactions, this is because we serve the underbanked peoples of the world in emerging markets. Nigeria is our 2nd biggest market, Ghana is #3 and India is 4th with the undeveloped world taking the lions share of our growing community. This gives us the privilege of serving those who need financial services most but it also presents us with some huge challenges.

If you have ever had a dispute on Paxful you usually had to wait 20–60 minutes before it is solved, but now it can be days to a week. Right now we have literally thousands of disputes open and this number has been growing daily. Our dispute moderators are drowning in iTunes gift card disputes which make up 90% of our total dispute volume and over 99.99% of the time our moderators spend on disputes.

But.. why go thru all the trouble??

We are the only p2p crypto service that deals with iTunes gift cards, why? All the others stopped supporting them because of the absolutely massive headache and near impossibility of proving proper account balances on iTunes gift cards. We have chosen to keep iTunes gift card support because it is still how the unbanked of Africa get their bitcoins. We refuse to abandon these unbanked users as the whole idea of bitcoin and Paxful is to help them. This comes at a huge pain price but we decided it was worth it. Our mission is to provide financial services to the entire world as a human right and sometimes that means going through tough terrain. We are working to transfer as much of the African traffic from iTunes Gift cards to bank transfer as the prices are often much better ( iTunes Gift Cards carry a 30–60% profit margin while bank transfer is often 5–10% ) and there are far fewer issues but iTunes Gift cards is still how most Africans begin their crypto journey and many don’t have a choice. For example, only 20% of Nigerians have a bank account.

What’s so special about iTunes gift cards?

iTunes gift cards are irreversible, much like bitcoins, however with bitcoin you can easily check the balance of any account on a public ledger, with iTunes you cannot as it is a private system. This means absolute chaos when trying to award disputes. 99% of all iTunes giftcard trades on Paxful go smoothly out of tens of thousands every week yet that 1% is really taxing our human resources.

Our dispute moderators must spend days on each one collecting evidence from both sides. Often it comes down to a coin flip as 99% of the people who get these cards are Nigerians and they get them online through brokering, which is against the Paxful Terms of Service. This is because they have no idea if the codes they bought are good or not thus causing massive confusion and wasting peoples times, hence why we forbid brokering. You cannot check the validity of an iTunes gift card until you redeem it which makes it worthless instantly. These Nigerians buy these cards through online brokering and then sell them on Paxful for bitcoin, usually to Chinese vendors (what they do with 11 million in iTunes gift cards a week is another story). Imagine going into a trade dispute with a Nigerian fellow and Chinese vendor both cursing each other in their respective languages and colorful english. Is the Chinese vendor with 10,000 feedback ripping the Nigerian trader? The Nigerian iTunes gift card trader has no idea if the code he has is valid and while sometimes it is many will swear on their life that it is valid. The Chinese vendors sometimes make mistakes with card balances getting confused from many simultaneous trades but there have been confirmed cases of ripping. Our mods ask the Nigerian iTunes trader to call apple and get recorded proof of who used the card and when. Most Nigerians don’t bother to call the oversea’s number and record the conversation, it is difficult for them, yet the burden of proof is on them to prove the value of the card. The point stands that there is no simple or quick way to get to the bottom of this.

Now what?

We won’t ban iTunes gift cards and cut off the unbanked and we don’t have a solution for fixing the dispute issue so what can we do?

First please accept my humble apologies as the CEO of Paxful. We never saw this coming at this scale… no excuses. We should have been prepared for anything.

Second please know that we are open to ANY and ALL advice about how we can fix this extreme situation.

Third we have opened up a new office in the Philippines and have begun training dispute moderators to quadruple the size of the team. We did this in September and we have already triple the size of our dispute team yet we have much more work to do. It takes time to train people to handle disputes and to recruit trusted people. We vet applicants very carefully with various background checks and monitor them. Only this selected team is allowed to view sensitive financial data in trades and this is why only help@paxful.com can help with disputes. No one else on our social media like Twitter or Facebook has any access to trade data so please be patient.

Fourth, we have begun experimenting with new security features. CodeCheck is a new tracking system that will compare all gift cards submitted and check their validity within Paxful and on their own ledgers, if possible. It is much easier to do this with Amazon but we hope to magically have a way to do this with iTunes as well. We have a HUGE bounty for anyone that can find us a scaleable automated way to check iTunes balances. Several other image detection and hardware finger printing security services are due to go online soon as well.

Fifth, a deal with Apple that would allow us to check these balances thru this system would SOLVE THIS ENTIRE PROBLEM OVERNIGHT. After all Apple definitely has a way to check balances built into their customer service apps. Surely “bitcoin friendly Apple” cough * would be happy to cut down fraud with their gift cards and help the unbanked in Africa, right? We tried speaking to Blackhawk and Incomm, the two companies Apple has handling their iTunes gift card network. They said their is no available API or service that does this. They do not approve or want their gift cards being used for thus after market activity and frown upon the entire process. We spent two months essentially reaching out to everyone we could only to get a flat out “NO!” every single time. Sorry, guys I personally went all out on this myself and no one seems to have a solution. Please have Tim Cook msg me on twitter if you can ;)

Please accept our apologies

We really are trying everything we can to fix this problem and are very sorry for those long dispute times. We choose to stick with our mission and help the unbanked get bitcoin and we are all paying the price. It is a price we will gladly pay yet we wish the end user didn’t have to as well. Please be patient with us as we work towards a solution and forgive our lack of communicate. We are not professional marketers, just coders and we are just now learning the ropes of proper communication with our customers. Thank you for being so awesome guys. We are really trying and won’t ever give up tell everything is awesome!

Thank you

Ray Youssef

Paxful CEO