You've just convinced a major retailer to accept your favorite cryptocurrency. Give yourself a pat on the back because it's not easy to convince a high volume retailer to ring up their sales twice, train employees and reconcile all sales at the end of the day between two point of sale systems.
Ring up sales twice? Yep. They need to track their inventory and your Cryptocurrency wallet and/or point of sale system knows nothing of such tasks. When the retailer rings up the transaction on their existing system before presenting the consumer with a balance, how do they process the sale? As cash, check or credit? Either choice will create accounting issues.
Most retailers will not tolerate a separate point of system for these reasons and countless others.
In an ideal world a high volume retailer will scan or key in your items, tender the sale as credit, you tap to pay or swipe a card and you are out the door as quickly as possible. As much as it sucks to pay 2%-5% fees to a credit card processor, it's probably a better option than a customer holding up the line as they fumble around with cash and counting change. Side note: most retailers are not a fan of credit cards for many reasons but understand delaying a customer will likely result in losing long term business.
The Solution: Auxiliary Networks.
First you'll need a basic understanding of what happens when you use your credit card at a high volume retailer. You throw your donuts and super glue on the counter, merchant scans or keys items, merchant totals the sale which prompts the price on the pin pad, you can either hand over cash or insert/swipe/tap to pay. You use your credit card, pin pad sends your card data to the point of sale, the point of sale then determines what to do next based upon some predefined variables. The point of sale needs to know where to send the data next which is dependant upon an additional string of numbers encoded to the card. These numbers will determine whether the card is visa, mastercard, the financial institution associated with the card, country of origin, etc. If the point of sale determines the data to be valid the transaction is sent to the merchants credit card processor IP address specified in the network and merchant set up of the system. The transaction is then validated or declined by the credit card processor.
MOST systems will have the option of setting up an additional network, or several.
This is probably more common than you think. Large hardware stores like Home Depot and Lowes allow contractors a line of credit in the form of a proprietary in house card system. This is also common with fleet fueling systems at gas stations and large truck stops. The merchant creates their own card with a unique card string and configures the point of sale to divert the payments to a different location to record and validate the transaction. The validation may even occur locally on what is essentially a simple payment server. The validation of these transaction are made possible by using the manufacturers auxiliary network API, simply put it's a series of commands that tells the cash register whether or not the transaction is valid. Large businesses may write their own code, smaller businesses usually buy an off the shelf option to manage "in house" transactions.
Off the shelf solutions come with a lot of options such as allowing a customer to choose the types of items allowed to be purchased, perhaps allowing fuel but not food, additional prompts for the customer to enter purchase order numbers, or odometer readings etc. Here's a popular one, but there are many:
https://www.e3tek.com/onetouch-suite-of-products/pioneer/
Mass Adoption / A Glimpse Into the Future
With a bit of effort we can already do the following:
Customer taps to pay using NFC protocol transmitted from their cryptocurrency wallet. The point of sale is configured to divert the transaction to an auxiliary network for this predefined card string and the transaction is validated or declined. The data is recorded as an auxiliary network transaction and will appear on the same reports the merchant is already familiar with.
The beauty of this is all hardware is already in place, including the ability to tap to pay outside for fuel at a gas pump. For smaller merchants likely the transactions will be validated locally on a small payment server, and I do mean small, like, even raspberry pi small. Most likely the consumer will send funds to the merchant prior to making the sale, or even holding a small amount of funds on this local server. Think of the merchants payment server as a very simple exchange with the ability to hold funds and withdraw, probably in the form of a stable coin.
Ideally we are able to create an image for a universal piece of hardware like a raspberry pi allowing a merchant to set this up on their own with as little friction as possible.
Merchants are now happy because they are able to process sales quickly without the heavy processing fees and potential charge backs of credit cards. They are also only dealing with one point of sale system that requires no additional training for their employees. The sales data is recorded like any other transaction and sales are reconciled seamlessly. The consumer is happy because most in house card systems come with the incentive of additional discounts that the merchant passes on to the customer in the form of money saved on credit card fees.
I work closely with many high volume merchants and currently have a basic form of this functioning now. I am willing to help and work with anyone who is wanting to see this become a reality. I do believe this is the path forward and the key to mass adoption. This is not rocket surgery or a pie in the sky dream. It's available now through off the shelf solutions and will be better defined when we finish creating a proprietary image. Sorry for my ramblings, I will post updates as we progress.
If you want more info or have any questions please leave a comment or email wixprints@gmail.com
-Wix
I hope this would help the newbie here like me. Thanks for the information