Paper, plastic or crypto plastic? Get ready to pay for those stylish jeans at your local retailer, in person, using cryptocurrency.

How? TillBilly, an Australian startup, unveiled this month its new blockchain-based “tap and go” terminal as well as an initial coin offering of its cryptocurrency, called BILL. The point-of-sale (POS) terminal uses blockchain to create a “secure, auditable ledger for transactions,” Sarthak Moghe, founder of TillBilly, tells ThirtyK.

According to TillBilly’s website, the company plans to roll out 5,000 terminals in Australia in the second quarter of 2019 and 10,000 terminals in North America in the third quarter.

TillBilly isn’t the only company developing a blockchain POS system. Camelgram has a POS terminal and concluded its ICO last November. TD Bank, the ninth largest bank in the U.S., filed a patent for blockchain “virtual draft system and method” in September 2016. Blockchain startup Pundi X introduced its cryptocurrency POS devices in Indonesia despite anti-cryptocurrency regulations.

Shopping is an experience, and the technology that blockchain POS systems offer can enhance that experience.

“We see ourselves as not competing with the bank cards, but as an alternative mobile/digital technology payment service which provides both its shoppers and merchants many benefits beyond conventional card payment,” Moghe says. Those benefits include lower transaction fees for merchants, sharing a portion of the transaction fee with shoppers, automatic digital receipts and automatic loyalty points.

Here’s How It Works
Consumers will be able to purchase credits on physical TillBilly cards available in stores. Think of them as akin to using a gift card, iTunes card or prepaid debit card. Consumers can add value to the cards online, in person or through an app. They can also use a smartphone app to make payments at the terminals.

TillBilly is offering actual plastic cards, in part, because Apple’s iPhones lock out other near-field-communication (or NFC) payment methods in order to promote its own Apple Pay, although that may change. Another reason: Older consumers may not be comfortable using their phones to make purchases. A physical card allows us to co-brand a TillBilly card with retail chains that want to offer extra value for their customers,” Moghe says.

TillBilly plans to show consumers their account balances in their traditional currencies, although this depends on what regulators in various countries determine. Consumer credits will be converted into BILLs during a transaction, and merchant settlements will be done in traditional currencies unless the merchants ask to receive BILLs. Crypto-savvy shoppers will be able to pay with other cryptocurrencies, which will be converted into BILL tokens the same way traditional currencies are.

In theory, consumers would be able to use any NFC-enabled card in a TillBilly point of sale terminal, but the card wouldn’t be processed the way it is at traditional POS terminals. “Instead, the NFC ID and the PIN are used to retrieve the user’s private key to ‘sign’ a transaction,” Moghe says. Users can also use NFC-enabled mobile wallet devices.
High-End Retail Acceptance

Suketu Gandhi, partner in the digital transformation practice at consulting firm A.T. Kearney, tells ThirtyK that high-end retail outlets are the most likely first adopters of such technology. “Those guys have fewer stores with much higher revenue per square feet,” he says, citing retailers including Apple, Tiffany and Cartier. Shopping at those stores is an experience, and the technology that blockchain point of sales systems offer can enhance that experience. “The value of point of sale is not on the transactional side but much more on the product service side,” he says.

Moghe recognizes that adoption won’t be instant. “It’s always the same chicken-and-egg problem with any platform,” he says. We need merchants to install the terminals on their checkouts so that there is user awareness, while the merchants would want every shopper to be on the platform to see it worthy of their counter space.

Gandhi at A.T. Kearney says that blockchain-based POS companies will also need to fight for retailer attention, which is often focused on just staying out of the red. “Retailers have a much bigger set of issues like survival than replacing the point of sale,” he says.

Jen A. Miller
Jen Miller's writing has appeared in The New York Times, Washington Post, CIO and Buzzfeed.