As digital currency advances towards worldwide adoption, its potential as a point-of-sale payment option is slowly being realized. Fueling this movement is an innovative company working on a breakthrough for how business-to-consumer (B2C) financial transactions take place.
Plutus is a London-based startup engaged in the creation of a new payment infrastructure which they hope will disrupt the prevailing model of merchant point-of-sale transactions. Its signature product, Plutus Tap and Play, enables consumers to spend Bitcoin at any brick and mortar store worldwide. Users will be able to make contactless bitcoin and ethereum payments at any merchant location with a checkout terminal that employs Near Field Communication (NFC). In short, all businesses that accepts contactless, debit card payments would, therefore, be able to accept cryptocurrency through a soon-to- be released Android-only mobile app used by consumers.
So what’s the driving force behind Plutus and what sort of value proposition does it hope to bring to merchants and consumers alike?
According to Plutus, it is to provide an incentive for bitcoin’s everyday use and mass-consumer participation. Fully realized, it could remove what is commonly seen as the largest barrier between cryptocurrency and commerce: merchant adoption.
Plutus CEO Danial Daychopan is no newcomer to the cryptocurrency space. After co-founding the UK’s first licensed bitcoin exchange and merchant processor in 2013, he began to see the larger need for blockchain-based payment systems that could reach the general public. The idea for Plutus, he says, was first developed in 2014 when mobile payments, in general, reached the mainstream, and the technology required to build a blockchain based payment system became available.
“Using what I had learned previously from my first crypto-based merchant processing company, we set out to design Plutus in a way that avoids the limitations of a traditional, centralized exchange,” said Daychopan during an interview with CoinCap.
Addressing the Point-of-Sale Gap
To date, bitcoin merchant adoption has been a challenging endeavor as few point-of-sale infrastructure tools currently exist to facilitate payment acceptance. Therefore, many business owners have steered clear, perceiving cryptocurrency payments as rife with complexity and a high learning curve. Further, the few businesses that emerged as early adopters often became frustrated with technical difficulties over time thereby mitigating expansion and adoption progress.
Shawn Owen, Chief Operating Officer of Southern Concepts (the parent company of the Southern Hospitality brand of restaurants located in New York and Colorado) is an ardent proponent of Bitcoin and its value in the business-to-consumer world. He helped spearhead the acceptance of Bitcoin as a customer payment option at its downtown Denver location.
When informed of the news about Plutus’ ambitious quest, Owen remarked, “I have been looking forward to contactless bitcoin payments for a very long time, and can’t wait to see this service hit the market.”
On the consumer side of the equation, the benefits are obvious, particularly for miners, entrepreneurs, freelancers and others who now receive a fair amount of their earnings in Bitcoin. Plutus will allow these individuals to immediately tap into both local and global opportunities for spending their digital currency.
Further, one of Plutus’ advantages in the booming mobile payments industry is its ability to capitalize on the rapidly expanding Ethereum network. Ethereum is set to propel Plutus’ deployment of smart contracts to facilitate peer-to-peer (P2P) transactions of fiat currency and bitcoin, all with the added benefit of automatic escrow.
Revving Up The Engine
PlutusDEX, a zero fee, peer-to-peer exchange, providing native liquidity for the Tap & Pay app is the next feature to come online.
On a practical level here is how PlutusDEX works:
- a user who wants to make a point-of-sale purchase sends their bitcoins directly to an online trader.
- The trader verifies the account and then transfers the fiat (national currency) to a secure escrow account, enabling the creation of an order on the DEX.
- The network of traders then convert Bitcoin deposits into a cash equivalent that is loaded onto the user’s virtual debit card balance in their mobile app.
- Once finished, the user can initiate purchases by scanning their phone over the merchant’s point-of-sale NFC reader.
Steering the funds through escrow allows traders to ensure that Plutus app deposits are rapid, with the entire process taking less than 20-seconds.
All of this allows PlutusDEX to deliver a more efficient and transparent process than that provided by a centralized exchange. The network is accessible via both the web and high-speed API and is also mobile compatible.
It should be noted that, as a means of fostering loyalty and usage within the Plutus network, consumers earn a tokenized digital asset known as Plutons for every purchase involving the use of the digital app. Akin to frequent flier miles or cash back points, they can be used to pay for goods and services in the same manner as bitcoins. Plutons are issued on the Ethereum blockchain and can be transacted using the Plutus Mobile App. They have zero transaction fees and allow for near instant transaction confirmations.
In July of 2016, Plutus embarked on an ambitious crowdfunding initiative. Thousands participated in the nine-day round that raised over a $1 million. Crowd sale members received a balance of Plutons for future use.
Looking toward the future, Plutus CEO Daychopan highlights their strategy: “We believe that if an option to pay with Bitcoin and Ethereum using a smartphone can exist regardless of merchant involvement, we are likely to see growth in payments right away. We have not been in talks with merchants for one very simple reason – it is not required for Plutus at all. Using Plutus Tap & Pay, merchants are paid in their usual currency and will not notice any difference whatsoever.”
He notes that the long-term goal is to provide users with the choice of depositing USD, EUR, and other fiat currencies in addition to Bitcoin and Ethereum, expanding the feature-set of Plutons, making Plutus usable for online purchases, adding more natively supported currencies and languages, and optimizing cost-effectiveness in general.
Says Daychopan: “In the end, our philosophy is to stay realistic, and create an app that has a well-defined practical use-case for a wide range of consumers.”