At a recent EOS meetup in Denver, I got in a discussion with a businessman who sells POS systems to retail merchants. He was very interested in crypto in general, and had attended ETH and other crypto meetups in the past. He was trying to wrap his head around why the fees are so high on most of the major cryptos, and didn't understand why people think this stuff is going to be adopted by merchants with these high transaction costs and unstable valuations on the currencies. I completely agree with his sentiments, this is why I have high hopes for EOS.
He was intrigued by EOS because it has 0 transaction cost to the users. This would be the only way he could get a merchant to adopt a system which has the ability to cut their merchant transaction costs from approximately 3.5% to practically 0. Now this is where I really see a platform like EOS shining. There is finally a system that can handle volume, as well as 0 transaction costs. This is what we need for crypto to go mainstream.
After the meetup I stumbled on OnePay, a POS system built on EOS!
This was exactly what this man had been looking for. I had his contact info, and sent over a link right away.
Lets dive into OnePay and see if this can be a solution to this massive issue.
What is OnePay: (excerpt from whitepaper)
"ONEPAY's goal is to equip today's merchants with the means to accept cryptocurrency payments. As cryptocurrencies continue to pave their way into the landscape of the financial system, it remains that the majority of businesses lack the necessary knowledge and resources required to enable cryptocurrency-based payments. ONEPAY bridges this gap by providing brick and mortar merchants with an inexpensive point of sale (POS) solution. Once a business has configured their ONEPAY POS terminal, they can immediately begin receiving cryptocurrency payments via customers using the ONEPAY mobile application. Using near-field communications (NFC) and QR-code technologies, consumers can wirelessly transmit payments to a vendor's ONEPAY POS terminal to pay for their transaction. The ONEPAY mobile application is an intuitive, secure gateway for individuals to connect their existing cryptocurrency funds in order to seamlessly transact. ONEPAY is built atop of the EOS blockchain; an industry leading cryptocurrency that has demonstrated the ability for ultra-low transaction processing times and fees. By leveraging industry leading cryptocurrency networks, the ONEPAY suite is the fastest and most seamless way to pay for goods and services using cryptocurrency. As with traditional credit-based POS solutions, payments are funded by merchants, meaning consumers are not paying a premium for their goods and services."
As well OnePay offers an e-commerce integration, for “one click” payment, much like paypal, which processes payments in real-time on the blockchain, something that is impossible to do on ethereum currently due to slow transaction speeds and high cost per transaction.
The phone app will work just like venmo, or you’r banks quick-pay option, to quickly facilitate p2p transactions.
What is the Tokens purpose: (from white paper)
“Token holders will be rewarded by receiving a "regular" dividend payment that is funded by a percentage of the transactional revenue received throughout the ONEPAY POS Suite. The token dividend is 0.5% of gross transactions. The formula would equate to (Gross Transactions In Dollars) * (Tokens Owned / Total Token Supply) * (Token Dividend Rate). So for example, if ONEPAY processes $1,000,000,000 in payments for the year, a person who owns 10,000,000 tokens would earn $1,000,000,000 * (10,000,000/500,000,000) * 0.005 = $100,000 for that year. As the total revenue goes up, the cash value of the dividend goes up. The regularity of these payments will be determined further down our roadmap. The total supply of the 1Pay token will be 500 million.”
Merchant costs: (from white paper)
What currency do merchants receive?
For maximum flexibility, merchants can decide how they are paid. Merchants effectively have two options:
No Conversion - Receive payment in the currency used during the transaction. For example, if a consumer pays for goods using 10 EOS, the merchant's wallet will be credited 10 EOS (minus the ONEPAY transaction fee).
Currency Conversion - ONEPAY can issue a fiat currency payment to the merchant on a monthly basis based on the spot rate for the respective currency. Currency conversion rates may apply.
What is the merchant's fee for processing a transaction with ONEPAY? The fee for processing a business-to-consumer transaction using our enterprise POS solution is 1% of the total funds being transferred.
How do ONEPAY token dividends work? What incentive is there to hold the tokens?
As mentioned before, ONEPAY charges merchants a nominal 1% transaction fee. ONEPAY uses 50% of the transaction fee (i.e. .05% of total funds transferred) to fund dividend payments to token holders. These dividend payments grow as the volume of transactions on the ONEPAY network increases, creating a mutual incentive for ONEPAY and it's token holders / investors.
My opinion on OnePay:
Positives:
- Solving an important problem, and accelerating mainstream adoption.
- Offer retail merchants much lower transaction fees (1%) by using a crypto payment network.
- Offering crypto users somewhere to actually spend crypto!
- Using EOS to facilitate crypto transactions, adding value to EOS network.
Negatives:
- Still a gray area for retail merchants when it comes to taxes, or crypto conversion to fiat. Until we get some clear SEC and IRS regulation and guidelines, it’s going to be hard to roll out a system like this.
- There is still a fee for merchants (1%), it is less than the average (3.5%), however I think there would be a way to structure a system like this with practically 0 fees.
- No airdrop for EOS token holders.
The team (USA based) has chosen to stay “anonymous” due to regulatory concerns in the united States. Here is a quote from the team.
-- “ONEPAY is being developed by a team of Software Engineer contractors in the United States. The ONEPAY team has chosen to remain anonymous until our legal counsel advises us to do otherwise.”
I am going to be cautious about this project, as there are a number of red flags. As well they have only raised 200ETH out of their 1000 goal, and ICO has been live fore a few months.
Will be keeping an eye on this one, but will not be investing in it, until I see a real team and working product.