Droplet - disruptive mobile payment

[wormbog]

http://techcrunch.com/2012/12/03/droplet-plans-to-disrupt-mobile-cash-with-no-charges-payment-app-for-iphone/

From the article:

"It’s so simple and disruptive I wonder why others haven’t really tried it. Droplet is a mobile money app on iOS that lets you load cash onto your phone and send payments to anyone – including participating retailers – for free, via email. Unlike mobile payment companies like Square, iZettle and apps from the banks who own Visa and Mastercard, Droplet is about digitising cash, not putting credit cards on your phone or carrying around a plastic card reader. But crucially there are no charges to the individual or the merchant. The idea behind droplet is utterly simple, but very powerful."

I wish someone would create a system like this with bitcoin as the backing currency. Initially people would load up their accounts with their country's currency, but eventually folks would realize that they can both send and receive money without ever converting to fiat.

[chriswilmer]

So, what is the difference between this (Droplet) and bitcoin?

[Jan]

Centralization.

[Spekulatius]

Its not a currency, just a transaction system.

[Spekulatius]

Its closed source

[Spekulatius]

Its not as anonymous as bitcoin (you need to download the app onto your device, it uses location data, browses your transaction history and probably maintains a file on you. You also need to prived your email.)
Once it catches on, AML and KYC requirements will need to be satisfied with certainty.

[Deafboy]

What’s more, we don’t store any sensitive information on people’s phone; it’s all on our secure servers, which use SSL/TLS encryption.

And this suppose to be an advantage?  

[bitcoinbear]

What’s more, we don’t store any sensitive information on people’s phone; it’s all on our secure servers, which use SSL/TLS encryption.

And this suppose to be an advantage?  

I guess if you are worried somebody is going to steal your phone and get all your personal info off it, then this would be an advantage. But I would suspect identity theives are more likely to hack the server database (or the government will demand the data from the server host). It just depends on who you are trying to guard your information from.

[2_Thumbs_Up]

It's possible to do something really similar using bitcoins in a decentralized manner.

https://bitcointalk.org/index.php?topic=55934.0

I kind of forgot about that, but the "containers" as described in that thread could make bitcoin transactions possible for both email and sms (for sms it would require the containers being in clear text rather than a file).

[Stephen Gornick]

I wish someone would create a system like this with bitcoin as the backing currency. Initially people would load up their accounts with their country's currency, but eventually folks would realize that they can both send and receive money without ever converting to fiat.

Or if exchanges were to be able to use it.  From another thread:

This is a little different from PayPal for payments transfer because (presumably) the app requires location tracking (geofencing), and thus a lesser chance of claiming it was not an authorized payment.

I'ld be curious if this would be a tool used for either low-cost bitcoin cash-out (payment send via Droplet, from a trusted party) or for face-to-face transactions where there is less risk of carrying physical cash.

Of course, this has the same level of being traceable as bank transactions do, so there's that.

But since Droplet accepts credit card, this is not the same as a Dwolla though.

[wormbog]

Email and SMS are interesting, but a mobile app like Droplet would have much broader appeal. Here's the workflow:

1. customer opens app while waiting in line, then places order for coffee
2. merchant indicates printout of the store's QR code on the counter
3. customer scan code w/ app, then types in order amount and their payment password
4. app sends amount from phone wallet to address scanned from QR code
5. merchant sees transaction appear immediately (via info from blockchain.info)
6. customer takes order, done!

Users would load money into the system via a system like bitpay or coinbase that allows them to add btc to their account via credit card.

The app would show your account balance in your local currency and bitcoin, so people understand that bitcoin is the intermediary currency.

App also allows btc to be send back and forth between regular users so you can loan money to your friends.

As an emergency measure, if someone steals your phone and enters the wrong password 3 times in a row, the app automatically sends the remaining balance back to a previously identified safe wallet with private key stored elsewhere.

People would pay a fee to convert fiat, which pays for the system. But users can send bitcoins back and forth securely with no fee, which encourages more btc-to-btc transactions. As exchange rates slowly rise, people observe their buying power slowly increasing just by holding btc in their app wallet.