By Karoliina Liimatainen on Wednesday 30 May 2018
British startup Plutus tries to bypass the problem of convincing merchants to accept cryptocurrencies. It’s testing an app which could make it possible to use cryptocurrencies almost anywhere.
Named after the god of wealth in ancient Greece, Plutus has grand ambitions. It aims to start what its CEO and founder Danial Daychopan calls a “cryptocurrency revolution” by enabling the use of cryptocurrencies in online stores and anywhere with an NFC payment terminal.
“For the first time ever, crypto investors can use their digital currency online and in shops across the world. From the beginning, our philosophy has been to make crypto as easy and ubiquitous as cash,” he said.
The key to this is Plutus Tap & Pay app, for which the company is currently doing an open beta test. Anyone can sign up to try out the app on Plutus’s website. Daychopan says the testing has gone well but he won’t yet say when the app will be officially released to the public.
“We have had several thousands of applications, and hundreds of active testers. The official release is still on the horizon."
The spread of cryptocurrencies has so far been hampered by having limited uses in everyday life. Retailers accepting bitcoin or other volatile cryptocurrencies are still a novelty and, despite the efforts of crypto enthusiasts, digital assets have remained mainly a speculative investment that has so far posed no real challenge to the reigning monetary system.
According to Plutus, less than 0.1 per cent of the world’s stores accept cryptocurrencies, and even then usually for large fees. Merchants don’t want to deal with unstable digital assets and the trouble of exchanging them into ordinary fiat currencies like euros.
Plutus tries to fix that with a quick and automated solution. Instead of waiting patiently for the cryptocurrencies to become more palatable to the merchants, Plutus uses its own crypto exchange PlutusDEX to convert the cryptocurrencies into fiat currencies.
PlutusDEX is a decentralised exchange where users buy cryptocurrencies from other users for no fees.
"Whenever you top up your balance in the Plutus Tap & Pay mobile app using Pluton, Bitcoin, or Ethereum you are actually creating a sell order on the PlutusDEX,” explained Daychopan.
The order is then matched with the buy order of another user, and the equivalent amount in euros or pounds is credited to the seller’s virtual debit balance.
“In the end, your Plutus Tap & Pay balance is the same as the one on your regular debit or credit card, and it is readily accepted by over 40 million points of sale in the world. And unless you tell them, or introduce them to Plutus, merchants won’t even know you are using crypto!" he added.
While the actual transactions have no fees, Plutus charges 3 per cent on every cryptocurrency deposit that is made on the Tap & Pay app. Daychopan said that Plutus may add other features in the future, which will make money for the company.
In addition to the two most popular cryptocurrencies Bitcoin and Ethereum, people can use Plutus’s own cryptocurrency Pluton and earn rewards in pluton when they shop using the app.
“We plan to add more currencies to our app. We will also be introducing unique new features like being able to upload your pre-existing bank card to the application. We also plan in the future to be able to offer the consumer a variety of financial products,” Daychopan described Plutus’s plans.
The rewards in the loyalty program can be up to three per cent of the customer’s purchase, and the rewarded Pluton can be instantly used to do other purchases. If Plutus’s payment services become popular, Pluton itself could become another big cryptocurrency.
London-based Plutus was founded in 2015 by Daychopan and Jasper Tay. The company raised one million US dollars worth of bitcoins and ether in an ICO, an initial coin offering, in June 2016.
Daychopan said that Plutus’s goal is “practical” and “laser-focused”. But if Plutus wants its payment system to work effortlessly, they need a large user base.
“We want you to be able to buy, spend and use crypto anywhere. And with our coverage, we want to reach every country that we possibly can. Because we are offering a wide and expanding range of services to bring cryptocurrencies into the real world, we hope to pass the 1 million user mark by 2019."