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Use Bitcoin at MasterCard terminals with OneBit

Upcoming Android application OneBit offers smartphone users 'tap and pay anywhere' functionality with bitcoin, using the MasterCard network - even without a MasterCard account.

An upcoming Android Bitcoin wallet application, OneBit, that premiered at the MasterCard Masters of Code Hackathon in March may be the first real contender to claim that you can use your bitcoins to pay any merchants that accept MasterCard.

Ever since the very first merchants started accepting bitcoin, the bitcoin community has been striving to create a system that enables all credit card-accepting merchants to also accept bitcoin as a form of payment, regardless of their knowledge regarding digital currency.

Some companies such as Xapo have introduced debit cards that come close to delivering  a bitcoin-funded bank account, so that bitcoin can be used whenever the merchants accept debit cards. However, these debit cards are restricted to small networks, and are not as widely accepted as Visa or MasterCard. The merchants need to be in their network for such solutions to be used. This restriction makes bitcoin debit cards fall short of being the ideal solution for integrating bitcoin with all credit card accepting merchants.

By partnering with MasterCard, OneBit is the first company to enable bitcoin to be used on a large scale by tapping into the MasterCard network.

“Imagine a simple bitcoin wallet. When you want to pay in a restaurant, you just take your phone and tap it on the NFC enabled payment terminal (very common in Europe and Singapore)."
— -Toby Hoenisch, OneBit Founder

Using OneBit is simple. You neither need an account nor a physical card. Anyone with an Android smartphone can use this free Bitcoin wallet application to pay at one of MasterCard’s NFC (Near-Field Communication) terminals.

The phone app utilizes your smartphone’s NFC chip to emulate the chip inside a MasterCard PayPass contactless card, in combination with your bitcoin wallet. The PayPass platform provides contactless mobile payment functionality, which allows MasterCard holders to pay without swiping their cards. Merchants will not see any differences between a OneBit transaction and a regular PayPass transaction, since BitPay handles the currency conversion in real time.

“The magic that happens underneath is done by BitPay who converts your bitcoin and MasterCard, who sends the money to the restaurant”
— – Hoenisch

Through an affiliate partnership with MasterCard, OneBit will receive a tiny cut of the access fee from each PayPass payment it facilitates through MasterCard. This revenue stream allows OneBit to make their service completely free, “We don’t charge fees to the end-user” Said Hoenish.

“Our profit comes from MasterCard in the form of a kickback for each transaction.”
— – Hoenish

While currently available in 30 countries, not all merchants have upgraded their payment terminals to accept PayPass. In Europe and Singapore the terminals are already very common, and they are rapidly gaining popularity in Australia, Canada, and New Zealand. However, according to Hoenisch, “In the US, only 15% of the payment terminals have NFC.”

Nevertheless, MasterCard’s PayPass locator map) shows that a large number of merchants in the USA have PayPass integrated into their payment terminals.  Any stores where speed of payment is key are likely have PayPass, including; most Gas stations, McDonalds, convenience stores, drug stores, and even grocery stores.

“Our initial goal is to release OneBit with MasterCard PayPass support. But eventually we want to integrate it with every payment system out there until eventually Bitcoin is accepted everywhere”
— –  Hoenisch

There are other contactless competitors on the market today such as Visa’s payWave and American Express’ ExpressPay. These systems, if combined with OneBit, would raise bitcoin’s usefulness significantly. For now Hoenisch has his eyes set firmly on integrating with Samsung’s hardware platform LoopPay, and he has since the very beginning. Hoenisch explains,  “I had the idea of OneBit when I saw the presentation of Samsung Pay and Loop Pay”

“That’s the ultimate end goal: to integrate with LoopPay (new Samung Devices) which will allow you to pay at any credit-card terminal directly with Bitcoin.”
— – Hoenisch

Before launching, OneBit must undergo a rigorous set of security tests that MasterCard administers. The application must pass them all before it can be integrated into the PayPass platform. Once launched, bitcoin users will be able to use any PayPass enabled terminals to pay using bitcoin. Anyone without a bank account, but with a smartphone, will have access to modern banking services.

“The most exciting part about bitcoin for me, is that it can give bank accounts to people that couldn’t otherwise. And yes, if there is any (legal) way I can help those people spend and use their money freely, then I will do that.”
— – Hoenisch


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