Wearables plus digital currency: A winning pair or too much tech?
Large outdoor events were among the earliest proving grounds for mobile point of sale technology. Will this environment be as welcoming of digital currency?
Many in the payments industry have already treated closed events like concerts and sporting competitions as ideal for new payments technology, ranging from mobile wallets to payment-enabled sunglasses. Such venues are less common as a testbed for digital currency.
Bitcart isn't straying too far from the examples that went before it. It combines the Dash virtual currency — which is similar to bitcoin and allows instant and private peer-to-peer transactions — with Festy, a QR code and NFC powered wristband. Festy is linked to a user's Dash account, and merchants can execute payments in near-real time, cashing out to a desired fiat currency later.
"Virtual currency is not useful unless you can provide a way for people to spend it on something," said Graham de Barra, CEO of Bitcart, a Dublin-based discount gift card platform.
Festy is getting an early test this week at a bar in Dublin and a rooftop bar at a local technology incubator. Attendees will receive a band they can top up via a Dash account.
There are a lot of companies developing ways to place payment capabilities inside wearable devices. But consumer adoption of wearable payments is still at the early stage, if not still experimental. The clearest successes are in places where the environment is built entirely around the wearable, such as in Disney World theme parks and hotels.
In that regard, Bitcart has an uphill climb. Not only must it convince consumers and merchants to use a wearable device instead of cash, cards or mobile wallets; it must also convince them to use the Dash currency as part of the process. Neither are new innovations, but neither is widely used at this point.
"This seems to be a mashup of two concepts that have yet to gain traction," said Thad Peterson, a senior analyst at Aite Group. "And the bracelet can only be used at merchants that have chosen to incorporate the offering in their point of sale platform. It makes the challenge of achieving critical mass twice as difficult."
Bitcart is betting a couple of problems that plague large events will make its offering an appealing alternative. For example, it expects Dash payment processing will cost merchants about half what they pay to accept card payments. And festivals often suffer from cash flow issues, and lines at ATMs win converts, de Barra said.
"It's easy to explain to people," de Barra said. "We tell them they can save fees…they're paying up to 4% for card payments."
There's also a security benefit, according to de Barra. Since Festy is linked to the consumer's Dash account, the funds are not stored on Festy's platform, and the virtual currency removes card numbers or keys when making purchases, which de Barra argues is safer.