Bitcoin payments app Plutus provides tap and pay at contactless payment terminals, including Transport for London, using Ethereum smart contracts and a decentralised rewards system.
Danial Daychopan, CEO, Plutus.it told IBTimes: "Anywhere you find an NFC-enabled terminal, you will be able to pay using bitcoin. We are primarily targeting contactless payments for convenient daily purchases. Our main innovation is that we are able to do this without running or connecting to a centralized exchange ourselves, as our platform is fuelled by peer-to-peer trading and decentralized smart contracts running on the Ethereum blockchain."
All bitcoin deposits are made prior to the point of sale to avoid the waiting time required for confirmations. A deposit is converted to a virtual debit card on the app, registered on the exchange platform (PlutusDEX). Making deposits prior to the point of sale is a necessary tradeoff, said Daychopan, who is looking for ways drive users to digital currencies, including syncing up charitable donations using the app.
The app's tokens, Plutons, are awarded as a rebate for bitcoin conversions, which can go towards the next purchase like cash back or air miles on an old fashioned credit card.
"A user receives a rebate in Plutons for every bitcoin conversion they make on the app. This starts at 3% and reduces as the network grows to the minimum set at 1%. These digital tokens are issued on the Ethereum blockchain with the balance transparently tied to the token smart contract - completely independent from Plutus.
"The app will provide a user an option to send earned tokens to a friend's account, which can also be a charity account set up on the Plutus app. This way multiple organisations can simply create an account and ask users and their supporters to donate their rebate tokens to the foundation account.
"The major advantage of a blockchain based rebate system is that it gives users freedom and transparency, which creates multiple use cases for a reward system instead of just payments."
Plutus does not hold any user's digital currency; the deposit it sent directly to a user on the DEX network with all the trading process recorded transparently on the Ethereum blockchain,
"So for a example, you can make a small bitcoin deposit in the morning and by the time you get to the local underground station, your deposit would be ready for you to tap and pay at any of the Transport for London's services and at any of the other stores. This can be repeated daily in small denominations for those who earn, or prefer to hold bitcoin.
He said converting your digital assets to Plutons further reduces friction. "The app will let you view your pluton balance, send to a friend or instantly convert only what you need to spend in store at the point of sale."
Smart contracts in general will allow shoppers to escrow payments, for example when shopping online until the merchant has shipped an order. A user could run a contract that looks at DHL tracking data of an order to determine its status before releasing the payment to the merchant.
Daychopan stated that merchant adoption and consumer usage regarding digital currencies are relatively gridlocked at the moment and "stepping stones" which plug into existing infrastructure are needed to drive usage at this stage of bitcoin adoption.