Bitcoin and Apple are both communities with a zealot-like following. To the dismay of both communities recent attempts by each at catalyzing mobile point of sale have resulted in lackluster levels of adoption from both consumers and merchants. This is a shared problem from opposing groups that I believe will also have a shared solution.
The Common Problem: Lack of Adoption
For Apple Pay, announced by Tim Cook at their September 2014 keynote, it was the promise to “transform mobile payments with an easy, secure, & private way to pay”. The numbers show that these features may not be enough to swell the tide of adoption. Despite a promising initial list of accepting merchants, as of June 2015 only 13.1% of eligible users had even attempted to use Apple Pay. It could be argued that from the perspective of the average consumer Apple Pay appears to be nothing more than a high-tech gimmick.
For Bitcoin challenges abound with respect to both user and merchant adoption. Despite the incentive of reduced transaction fees merchant adoption is fledgling at best. Having trooped through San Francisco (Bitcoin Mecca), New York, Denver, Boston, and more in search of accepting merchants… I can attest that the struggle is real. Look no further than Bitcoin Maps or similar services offered by Blockchain or Airbitz and you will note the lack of establishments accepting Bitcoin. A “chicken or the egg” problem is ever present and these transactions only appear to occur when merchants and users share ideology rather than see real benefit in the form of payment.
For mobile point of sale payments the value add (for both Apple Pay and Bitcoin) simply isn’t enough to catalyze significant waves of adoption by either merchants or consumers. The key to solving this problem and catalyzing mobile point of sale payments is to add more significant value.
Understanding the Problem: Give them Value and They Will Come
When I check out at the Whole Foods down the street Apple Pay is always available. Despite my enthusiasm for technology I never feel inclined to use it — it’s easier to just swipe my credit card like I always do. I’ve also considered using bitcoin (via Gyft) to make a mobile payment but again this requires added steps with little benefit to me the consumer.
Despite my unwillingness to engage with the available mobile payment options – I’m always sure to swipe my rewards cards with similar merchants at the point of sale. Why? Because it means I’ll likely get a discount on my purchase and possibly earn credit towards future purchases. This is actually of value; enough so that I even keep a tiny bar code on my keychain. As consumers we are willing to go the extra mile as long as there’s value in it for us.
The Common Solution: Blockchain Enabled Digital Tokens & Assets
The solution to this problem is the transformation of loyalty rewards, coupons, and discounts into digital assets (tokens) that are stored on a blockchain. What the digitization of assets allows is the seamless flow of value between suppliers, merchants, and consumers. In a world where my purchase of a Coca-Cola at McDonalds earns me not only micro-rewards at McDonalds but also universal micro-credit towards Coca-Cola I could now apply this micro-credit to my next purchase of Coca-Cola products at the supermarket.
In a world where I am accumulating loyalty rewards and credit for every product I purchase at every merchant I shop with I would be quick to adopt mobile payments. In the same way that I always swipe my rewards card at the supermarket, whether I know of the discount or not, I am always sure to do so for no other reason than I know that I “might” get a discount. Similarly, in a world where I am amassing digital token rewards for all the products I purchase, I will always be sure to use my digital wallet at mobile point of sale terminals … who knows what I might save or earn!?! There’s real value in that.
There are currently a number of startups in the blockchain and bitcoin space building this future. It will be exciting to watch startups such as Chain and Tokenly as they move forward … Apple fans and Bitcoin zealots alike may all have to thank them in the near future.