Meet The Mind Behind Banxa, The Industry Leading PSP: Domenic Carosa

Domenic Carosa

Banxa is one of the first 50 cryptocurrency companies to be listed worldwide, and one of the fastest-growing tech startups in Australia. We handle compliance and payments for millions of people worldwide via our collaborations with what we call “The Banxa Network”—our partners. By providing our partners with a safe, simple, and transparent way to allow their end-users to buy and sell crypto and digital assets, we essentially provide an “on-ramp” (like on a highway) for them to grow their liquidity and to meet local reporting, KYC, and AML requirements.

TLDR: We are a reg-tech (for the compliance, AML/KYC piece) and a payments service provider (PSP) for the digital asset space. Our real strength is in being a global player with local payments integration and an extremely strong compliance process.

How did you come up with the idea for the company?

Banxa was really born out of my nerdish interest in blockchain. In 2013/14 I began by mining bitcoin—I’ve always learned best by doing, and so we started there. From that, we spun up, a site where retail/end users could buy bitcoin. Eventually on the back of that, in the 2017/18’s bull market, we rode the wave and scaled pretty quickly. On the back end of that we went through the contraction, same as many other crypto companies.

But the lessons we learned scaling those retail businesses at a time where banks didn’t want to touch crypto companies served us very well: We understood the frustration that digital asset businesses had in accessing traditional financial markets, and we built Banxa to fill that gap.
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What advice would you give to other aspiring entrepreneurs?

I think it is critical to understand that especially in tech, no one has a crystal ball. You always need to make decisions based on limited information. The market is just moving so fast, find that thing that either simplifies or improves an existing opportunity or creates a new one. Learn all that you can, but then act. Build, or buy, or partner and get moving. Lots of people get “Analysis Paralysis” trying to understand the minutiae, you can’t afford to do that, best guessing and gut feelings need to be enough. I’m sure Andressen Horowitz had all sorts of plans for Clubhouse, and for a while it did boom, but where is it now?

They are some of the sharpest investors in the world. If your friends or colleagues tell you it’s a bad idea, they probably don’t see what you see. Focus, drive, and passion are what’s needed to succeed.

An example, one of the cryptocurrency businesses I’m involved in, that actually works out of the same office as Banxa, Apollo Capital, was recently named the most successful Fund in Australia by returns. It’s taken years of hard work, and people saying a cryptofund won’t work, etc etc. But those guys are finally getting the recognition they deserve.

What can we hope to see from Banxa in the future?

Well, in the life cycle of a startup with the “hockey stick curve” of growth, Banxa is now firmly in the scale-up phase. We understand what works, what the market opportunity is, and the objective. Now we are building what we call “Horizon 2” products—what’s going to get us to where we want to go. One part of that is more licenses, the payment on-ramp business is full of tiny players who do credit cards.

Everyone does credit card. Yet, credit cards are the most expensive channel. So, lots of small players with an identical product—it creates a race to the bottom. At Banxa, we believe that people want local payment methods, like Interac in Canada, SEPA Instant for UK and EU, ACH or wire transfers in the US, all these things provide consumers with greater choice. If companies are serious about this space, it needs to be about consumers.

Now, here is another area we are focused on. The big players in the industry, a lot of whom are our clients, are less and less interested in more and more service providers with identical offerings. What they want is high conversions. For every 100 people who try to buy BTC on Binance, if only 10% convert, Binance sees those 90 who didn’t as a lost opportunity, and rightly so. At Banxa, we are aiming to have the best conversion in the industry. We do this by investing heavily in our Tech and Product teams, UX and UI, and really building out our tech stack.

Finally, another major focus for us at the moment is the regulatory layer of our product. With the current regulatory interest in the space, our compliance-led approach is really resonating with our partners and the market. We are actively pursuing licenses and registrations in a number of markets, at the same time as expanding payment channels, as mentioned above.


How has the pandemic affected Banxa, if at all?

The pandemic has impacted us in obvious ways, same as everybody, and a few specific ones. Our office is closed, the bulk of our staff at our Melbourne HQ have been on lockdown for months, working from home. A few of our new hires are based in Sydney and other places and have yet to meet a work colleague in the flesh. Amsterdam, our European HQ, is open, but travel is still really difficult.

Those are the same as everyone else. Specific to Banxa and our rapid growth are interacting with regulators and our partners. Everyone else is also working from home, and this can slow down hiring, onboarding, and training for new joiners, especially when you are scaling like we are. We’ve gone from 32 employees to 150 in 9 months. I think our People & Culture team have done the most amazing job, but it was challenging for a while. On the regulatory side, we are in advanced conversations in 3 jurisdictions, and the process we’ve noticed is slower than pre-lockdown.