PROTOTYPE: Terminal is based on a Nexus S smartphone embedded in a 3D-printed case

Fifty merchants in the German city of Hannover have signed up to accept Bitcoin payments using a terminal supplied by startup Pey, that uses a combination of iBeacon, QR code and NFC technology.

The current version of the terminal is based on a Nexus S smartphone embedded into a 3D-printed case that features a Bluetooth Low Energy (BLE) beacon provided by Estimote as well as a modified NFC antenna.

“Inspired in part by the usability that Apple established with Apple Pay, we went ahead to see how we could replicate something similar but using Bitcoin and existing technologies,” Pey founder Ricardo Ferrer Rivero explained to NFC World+. “We started experimenting with iBeacon on one side and that’s how we came to a solution for iOS devices. On the Android side, we integrated an antenna into the payments terminal.

“We had a very tight deadline to stick to and we had some time constraints so we decided not to develop an Android app at first so that meant we couldn’t use the iBeacon solution on Android. We’re supporting NFC for Android and iBeacon for iOS in order to get the transaction as quickly as possible. The iBeacon solution for iOS is a mixture of iBeacon and QR code while the Android solution only uses NFC.”

“Users can basically use any wallet available,” Ferrer Rivero continued. “On the Android side, it’s much easier because there are already several apps that support NFC. Because of NFC, it’s much quicker, much better; the merchant just has the terminal, which is always on, and they enter the amount that they want to receive. The Android phone opens automatically all the apps that support that Bitcoin URI.

“What we did for iOS was develop what we call a Bitcoin Wallet Launcher and its only function is to recognise iBeacon and launch, immediately, the camera so the user can scan the QR code quickly without having to unlock the phone, without having to look for the app, open the app and then open the camera in the app.

“We’re actually working very closely with a company from France called Yallet which, in our opinion, offers the best user experience on iOS in terms of wallet. We do plan to integrate a wallet into our app at some point, but it was not possible because of the time constraints; we developed the whole project in about two to three weeks.”

Pey’s Nexus S-based payment terminal is already working in 12 stores across the German city and the company expects that all 50 of its partner merchants will be up and running by the end of this month.

“We expect to keep developing it,” Ferrer Rivero added. “We’re actually almost done with the second prototype. Right now, it’s a very alpha version and we’re using an old Nexus phone. That was the goal in the first step, to see if we could with such a solution convince merchants and it worked pretty well, so we started developing parallel to that a solution based on the Raspberry Pi.

“At the moment, it is a modified smartphone with a case around it that makes it look a little bit more like a normal payment terminal. Instead of having keys, it has a touchscreen but it’s going to be developed to be more like a payment terminal. In the third prototype, which we haven’t started yet, it’s going to be focused on mass production. Right now, we are offering the terminal for free.

“For us, it’s an opportunity to learn for subsequent versions of the terminal. I think what works in this scenario is the mixture of no fees and an innovative solution for people to pay. Most of the shops that I’m approaching are shops that don’t offer any other kind of electronic payment so it’s something that is attractive to them. They have nothing against electronic payments, they just don’t want to pay the high fees.

“So, if you offer a similar solution that’s even more innovative than magnetic stripe or chip card and mix that up with having no to very low fees, then it becomes a very attractive alternative for them. They’re willing to experiment; I think it’s very hard for the merchants to say no because they have nothing to lose. For them, it’s been a little bit of a marketing boost here locally.

“It has driven a lot of Bitcoin enthusiasts to Hannover to try the solution and to pay, and those are customers that wouldn’t have normally been coming to these cafés or to this part of the city. They see a lot of advantages and very few disadvantages.”