Fifty shops in Hannover have signed up to Pey's beacon powered merchant and customer Bitcoin system. The app and hardware system is fighting to make Bitcoin payments easier for both parties to process, but faces strong competition from NFC developments from Circle.
Pey aims to simplify over the counter Bitcoin transactions by using beacon technology at the cash register to suggest payment in bitcoins and to launch the user-preferred wallet service if desired. By eliminating the search for the correct app on your phone (the digital currency equivalent of rummaging through your pockets for change), Pey could be making a step forward in the struggle to make Bitcoin a more accessible and commonplace in-person payment method.
The Hannover based start-up is facing stiff competition though, with rival wallet and merchant services backing alternative technologies to compete in this field. Internet finance platform Circle recently announced the integration of NFC payments into the mobile app.
When this is combined with BitPay's merchant app across the counter, it can offer shoppers a slick and fast Bitcoin payment closely resembling the more familiar experience of paying with contactless payment card, without the use of beacons. When either of these approaches is compared to the very early days of multiple QR codes and slow transaction times, it's clear that this in-store market is moving at a very fast pace.
One advantage of Pey's use of beacon integration is that it will offer an alternative to the current issue of NFC use on Apple devices. With the launch of ApplePay, the technology giant has restricted the use of the NFC chips in modern Apple devices to only their proprietary payment app. Beacons, however, operate on Bluetooth Low Energy, a technology accessible to both iOS and Android phones, although it is currently equally inaccessible to phones running Windows 8.1. For iPhone users, the notification of Bitcoin acceptance in-store and prompt to open their default wallet, could make a QR code based transaction convenient enough to become a regular option for them even without access to an iOS wallet service with NFC.
On the other side of the transaction, Pey is offering shops and traders dedicated hardware to run BitPay's merchant app. Pey founder Ricardo Ferrer has identified confusion and apprehension among traditional brick-and-mortar business owners when it comes to buying tablets and putting together their own Bitcoin payment terminal with their phone.
With a background in UX design, Ferrer 3D printed the first Pey enclosures, containing a Nexus smartphone and an NFC antenna. The responsive nature of Pey's approach to merchant needs seems to have helped win over the 50 businesses now signed up to the program.
Cointelegraph spoke to Pey's founder Ricardo Ferrer about the high number of merchants now accepting Bitcoin on Hannover's “Bitcoin Boulevard.”
Cointelegraph: What inspired you to make Pey?
Ricardo Ferrer: Bitcoin caught my interest over a year ago and in March 2013 we started accepting Bitcoin at our co-working space. We took part in a trade fair where we had several guests from companies like Bitpay, Lamassu and bitcoin.de. Since then not much had happened in Hannover and we remained the only location in the city that accepted Bitcoin. We wanted to change that. Mainly so that we can spend our bitcoins and “play” with the technology in a real life scenario as often as possible.
While trying to convince merchants to be a part of the project we noticed that there were two factors that hindered adoption: Volatility risks and the need for the merchant to use their own smartphone to process the payment. We decided to solve both of those problems while a additionally focusing on the user experience. For this reason we integrated iBeacons into the project, to reduce the time it takes to trigger a payment, bringing bitcoin mobile payments closer to the user experience provided by systems like Apple Pay.
CT: What’s making merchants in Hannover so keen to use Pey?
RF: I believe so many merchants jumped in in such a short time because we are offering them an all-in-one solution. By Partnering with Bitpay they don't have any volatility risks and through our cheap hardware they can have a device that is always ready to take payments even if they have employees changing shifts all the time.
It’s a way for them to offer an added service, experiment with new technology and generate a couple of new customers with very little effort and risk. I also believe the personal contact with us is important. They know that they can call us if any problem arises and they feel that their suggestions are heard and implemented quickly.
CT: What do you plan to bring to the next version of Pey?
RF: We are almost ready with the second prototype. This new version is based on a Raspberry Pi instead of a Nexus S smartphone. This will allow us to work on our custom terminal software that will improve the user experience and the onboarding process for new merchants. We also plan to make improvements to the NFC antenna and iBeacon implementation.
The industrial design for the terminal will be further polished by our co-founders from Studio Dreimann and our iOS App will get several improvements like a better flow with integration to Yallet (our partner Wallet). The planning sessions for the third version of the terminal start next week and we expect to start promoting it more broadly in April 2015.