А company is building a Blockchain-based protocol to reform how everyday financial transactions are completed – with a warning that credit and debit cards are unfit for purpose in today’s “fast-paced, global economy.”
PumaPay claims its system has what it takes to propel cryptocurrencies into mainstream use and rethink how payments are processed. It is developing an open-source “PullPayment Protocol” which enables merchants to pull funds out of a customer’s account with their consent. This would replace old-fashioned methods where a shopper pushes money to a retailer, with the cash going through a long line of intermediaries in a costly process that can take days to complete.
According to PumaPay, its invention is “far more credible, efficient, cost-effective and scalable” than current solutions – and offers much-needed flexibility to make cryptocurrencies viable as a source of payment both online and offline.
Serving merchants, not exploiting them
According to PumaPay, it is merchants who lose out most through the economy’s “anachronistic” reliance on card payments which dominate online shopping sites.
The project says retailers and small businesses face multiple fees, ranging anywhere from 2 percent to 8 percent in some cases. Not only do these charges take a serious toll on a merchant’s profit margins, but PumaPay says long transaction reconciliation times have a detrimental impact on cash flow. Chargebacks are also becoming more common because of fraud and buyer’s remorse, resulting in fines and insecurity – with merchants continually uncertain over whether the money from a sale will reach their bank account.
“As flexible as payment cards”
According to PumaPay, the flexible nature of PullContracts means merchants can mold them in ways to best suit their business – allowing them to conduct offline transactions and receive recurring payments.
Examples of potential uses for PullContracts given in its white paper include purchasing a magazine subscription, monthly payments of electricity bills and paying for dinner at a restaurant. PumaPay also believes its system could become an ideal way to make children financially independent, with young people given their own wallets and their parents allowed to veto purchases if the item they want falls outside the parameters of what the pocket money is for. The same scenario of ‘restricted payments’ can be applied to corporate expenses with employees’ wallets provided by an employer.