June 21, 2016
By Jim Daly
MintChip, a digital cash replacement, went live Tuesday with a handful of retailers and restaurants in a trendy Toronto neighborhood. Canadians anywhere also can use MintChip for peer-to-peer payments.
A loyalty and payment-services startup called nanoPay Corp. bought MintChip, which was developed by the Royal Canadian Mint, early this year. Since then, Toronto-based nanoPay has been working on commercial applications for the payment system, the first of which was announced Tuesday with 13 establishments in Liberty Village southwest of downtown Toronto. NanoPay also will enable software developers to integrate MintChip into other applications through application programming interfaces.
“With the launch of MintChip in Canada, we demonstrate that it is feasible to replace physical cash with digital cash, while showing the viability of the platform to banks, merchants and developers worldwide,” Laurence Cooke, nanoPay’s founder and chief executive, said in a news release. “Open APIs enable developers to easily integrate digital cash into new service offerings that will expand the utility and acceptance of MintChip.”
Consumers can access MintChip by downloading its app to Apple iOS or Android mobile devices and funding their accounts with a credit card. Bank-account funding will be added soon, Simon Keogh, chief marketing officer at nanoPay, tells Digital Transactions News via email.
MintChip has some similarities to Bitcoin, the best known of the digital currencies, but also important differences. Like Bitcoin merchants, MintChip acceptors will not be liable for chargebacks because MintChip is a cash replacement that settles transactions in real time. But unlike the volatile Bitcoin, which must be exchanged with fiat currencies, MintChip is a digital representation of a country’s official currency. Thus, one MintChip equals C$1.
Merchants do not need to do point-of-sale integration work to accept MintChip, but currently they must have an iOS compatible device, according to Keogh. More POS options will be available when France-based terminal maker Ingenico Group, a terminal deployer in Canada, completes integration of MintChip into its Telium line of devices. The integration will enable MintChip acceptance at existing terminals.
During a purchase, the merchant’s system generates a Quick Response bar code that the customer scans with her MintChip app. The system confirms that the consumer's account has sufficient funds and sends an instant notification to the merchant. The transaction is declined in cases of insufficent funds.
Consumers can send money to another person through MintChip by simply using the recipient’s email address. If a would-be recipient does not have a MintChip account, the sender can use the app to invite the person to open one. All MintChip transactions are free to consumers.
NanoPay is limiting single transactions to C$100 (U.S. $78.19 at current exchange rates). Daily and weekly limits are C$250 and C$1,500, respectively.
The system encrypts transaction data and stores monetary value in what nanoPay calls a digital vault. It also works without the need for third-party processing or settlement, the company says.
NanoPay is sponsoring a promotion that runs through Canada’s Labour Day (Sept. 5), during which merchants pay no acceptance fees. Customers will receive 20% cash back during the promotional period, up to $50 and funded by nanoPay, and be eligible for prizes.
Keogh says nanoPay plans to expand MintChip’s presence first in Canada and eventually take the system to other countries. “In Canada, we are planning to roll out to many more merchants and are in several conversations with large retailers,” he says. “We anticipate that the retail payment will pick up with the availability of MintChip support in Ingenico POS terminals, which was announced last week.”
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