Cash dominates payments across Europe. In most of the EU, consumers pull out bills and coins at checkout, and store owners welcome the practice because banks charge them steep fees to process cards. A
Cash dominates payments across Europe. In most of the EU, consumers pull out bills and coins at checkout, and store owners welcome the practice because banks charge them steep fees to process cards. A startup in Hanover, Germany, is betting it can upend that pattern by putting Bitcoin terminals in merchants' hands.
Ricardo Ferrer and a group of collaborators built the device from off-the-shelf parts: an Android tablet (Google Nexus 7), modified software, and 3-D printed housing. Merchants enter a price, and customers swipe or pass their phone across the terminal. An iBeacon triggers a push notification. The customer taps to confirm, the app opens, and the transaction completes.
Ferrer's team tried to integrate the terminal with existing wallets like Bitcoin Core, Blockchain, Coinbase, and Armory. The process dragged on, so they hired another developer and built their own app. The company Pey was the result.
The inspiration came from watching Apple roll out its NFC-based point-of-sale system. "We wanted to reach that standard of usability," Ferrer said. "But I noticed it wasn't going to be possible through the normal channels."
Pey is giving away terminals to merchants at no cost. In its first weeks, twelve units landed in Hanover shops. BitPay handles payment processing without charging a fee, so merchants absorb zero costs to accept Bitcoin. Cash-only shops get the security benefit of digital payments without upfront investment.
"We currently charge no fee, basically because we see ourselves as a hardware company," Ferrer explained. "So we're giving it to people and trying to learn from it."
The economics shift down the road. Pey plans to start charging for terminals once the market understands the product. The company hasn't settled whether it will sell outright or lease them. For now, Pey is targeting towns similar to Hanover, places where small merchants run almost entirely on cash.
