Retail payments and merchants — still a cryptocurrency bridge too far
You may have read headlines in the past years of the number of merchants now accepting Bitcoin or some other cryptocurrency payments. They number hundreds of thousands, even millions, if some reports are to be believed.
But the reality is that the majority of physical and digital retail commerce are still transacted using credit cards, whether via direct credit payments (such as the likes of Visa) or through payment processors (including services like BitPay).
So it’s not entirely accurate to view all crypto-accepting merchants as actually receiving payments in crypto — what happens is that customers pay Bitcoin to the payment processor, which then settles payments to the merchants in fiat. This means that crypto users lose out: paying high commissions or unfavorable conversion rates imposed by the processors. Merchants also lose out on their end, receiving less after conversion settlement.
And now, with the recent decision by Visa to sever ties with debit card issuer WaveCrest Holdings Ltd., thousands of crypto users who were able to use crypto-enabled debit card services suddenly found themselves without a way to spend their crypto. This affected all users of payment processors like BitPay, Bitwala and Cryptopay.
Suddenly, it became clear that merchants never really accepted crypto — they had merely accepted payment methods and processors that effectively intermediated crypto payments for them.
It’s strange to think that the premise of direct, low-cost, quick peer-to-peer (P2P) payments upon which cryptocurrencies are supposedly built on haven’t yet translated these benefits into actual use.In short, they have yet to develop into a widely accepted means of payment. Mass adoption and use are still not achieved.
Solving the genuine problem of utilizing cryptocurrency
Our partner PumaPay is working on a proposal to provide merchants with an accessible solution to process crypto transactions, with its own digital asset PMA as a means of facilitating payment. The PumaPay billing protocol specifically looks at typical payment use in every day lives such as recurring payments, periodic subscriptions and pay per use, ensuring flexibility for any billing needs currently unfeasible over blockchain.
This indefinite flexibility comes from its innovation: ERC223-compliant “PullContracts” (where the merchant retrieves payment from user) that allows any number of real use scenarios of the most common transactions online and offline. Some examples:
– Recurring payments, as in the case where a user needs to pay a monthly utility bill. PullContracts automatically withdraw a varying amount of money at predetermined intervals. The user must accept every PullContract that wants to integrate with the account. Via “Limiters”, the account can never be abused or insecure — the utility company can never take any amount, but is limited by the user-specified maximum that is easily modified.
– Pay per use, such as when a user seeks professional advice, billed by time. Via PumaPay, the expert can commence a session with a user, whereby a predetermined deposit of PMA is captured via a PullContract. The PullContract then tracks the time used in the session, confirming at each prefetermined interval that the session is active and that the customer has enough PMA to continue. Once the session ends, the PullContract transfers PMA as payment from the captured amount, releasing the unused balance to the customer.
The PumaPay Protocol is open source, encouraging external input and further development from the community to its built-in modules. Up to 10% of PMA will be distributed to early adopters.
The PumaPay Presale is currently live and will run until March 22nd, 2018. Interested to join as an early contributor? Contact the PumaPay team on the website at https://pumapay.io or join the discussions on Telegram.
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