Startup OneBit is developing a Bitcoin wallet app that lets users pay at any store with contactless mobile payments via the MasterCard PayPass payment network.
OneBit securely converts bitcoin on the fly at market rate into any major local currency using BitPay, and pays the merchant via their NFC payment terminals. OneBit will permit users to pay at any MasterCard PayPass-accepting merchant worldwide, with zero fees.
“The magic that happens underneath” is done by BitPay, which converts the OneBit user’s bitcoin to the local currency of the merchant, and MasterCard, which actually sends the money to the merchant.
OneBit was developed by entrepreneur Toby Hoenisch at a Mastercard Hackathon and, according to Hoenisch, got very positive feedback from MasterCard.
MasterCard is helping OneBit get a partnership with a card issuer, and OneBit is trying to secure funding for industrialization. OneBit is available on an invitation-only basis to selected early-access testers.
“We don’t want to launch a half-assed Bitcoin wallet that gets us in trouble for violating KYC laws,” says Hoenisch on Reddit. “And yes, legal is the main reason we can’t just ship it.”
Anyone can apply for early access on the OneBit website.
Hoenisch has a background in AI, IT-security and cryptography, and his co-founders have backgrounds in user interface design and security.
“I have been fascinated by Bitcoin for the last three years, but never quite found the right idea to form a company around until now,” says Hoenisch. “We managed to get MasterCard and DBS bank interested in OneBit and with their help, I am confident that we can build OneBit without getting burned like Charlie Shrem did.”
OneBit has been invited to the selection days of the startup bootcamp fintech accelearator in Singapore. If Hoenisch and his team get into the startup bootcamp accelerator program, which will also give them access to DBS bank and their network, they plan to launch OneBit at the end of their three-month program on July 28th.
If Hoenisch and his team manage to get funding and launch the project, OneBit promises to be nothing short of revolutionary: Bitcoin holders will be able to pay merchants directly from the Bitcoin wallet on their phones without requiring merchants to take direct steps to accept bitcoin.
NFC-enabled PayPass payment terminals are very common in Europe and Singapore, and increasingly common in Canada and Australia. Therefore, it seems likely that OneBit will make the life of daily bitcoin users much simpler and reduce their dependency on exchanges.
The direct involvement as a partner of MasterCard, whose APIs and SDKs are used together with those of BitPay to power the OneBit platform, may seem surprising to those who remember recent statements by MasterCard that indicated hostility to Bitcoin.
In a December 2014 submission to an Australian Senate inquiry, MasterCard urged regulators to move against the pseudonymity of digital currencies such as bitcoin.
“Contrary to transactions made with a MasterCard product, the anonymity of digital currency transactions enables any party to facilitate the purchase of illegal goods or services; to launder money or finance terrorism; and to pursue other activity that introduces consumer and social harm without detection by regulatory or police authority,” said the MasterCard statement.
It’s interesting to note that the Reserve Bank of Australia (RBA) recently replied to the same Senate inquiry by stating that it is unlikely that any benefits of Bitcoin regulation would outweigh the potential costs. RBA’s head of payments policy Tony Richards also said that, while digital currencies are not legal tender, there is nothing to prevent two parties agreeing to settle a payment using a digital currency.
Perhaps, after many similarly open-minded positions on Bitcoin taken by governments worldwide, MasterCard realizes that Bitcoin is here to stay and moving toward more integration with mainstream fintech.
Image via OneBit.
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