The end goal for consumer use of crypto is to be able to walk into a store, buy a cup of coffee and pay for it using crypto. This idea, laid out in the original Bitcoin whitepaper, has persisted since in the ethos of many projects. If ultimately instituted, retailers would disintermediate payment processors and gateways, lowering costs and speeding up escrow and settlement.
In its current state though, crypto is not widely used amongst retailers or demanded by consumers to be offered as a payment type. Use of fiat is just too simple, easy and not subject to any deflationary price increases that would prevent hodlers from actually ever selling. More so, governments typically insure that in case of fraud, they will insure loses up to a certain point. For all of our beliefs about future use and adoption of crypto, cash is king and will be for the foreseeable future.
What can be done on the retail side though is to digitize value previously kept in the form of paper coupons or other discounting methods. For example, the value on a gift card can be tokenized, preventing theft or loss or tokenized coupons can be sent to consumers if they visit a store or make certain purchases. Carry Protocol will offer these types of services and more in their upcoming ICO and POS integration.
Carry Protocol is a sister business to Spoqa, a Korean retail POS company and distributor. So far, their enabled iPad devices are located in more than 10,000 stores across Korea. By next year, Carry will be integrated into their app for every business. Spoqa claims include 2bn transactions a year and more than 16mil customers using their systems yearly.
The structure of Carry Protocol can be broken up into three different modules.
The first is providing crypto currency POS transaction capability across all of their devices. This simple method involves displaying a QR code, which the user would scan and then send crypto to. The store would have the choice to sell it at market rates immediately or to have it transferred to their own wallet. Users will initially be able to pay with BTC, ETH, and CRE, the token issued for Carry Protocol’s ICO.
The second involves issuing CRE or branded tokens to users as a cash back or loyalty retention method. A business would be able to decide how much value it wants to give back to their user for the purchase. For example, a coffee company could give 1 coffee token to a user for each purchase, then after the user collects 7 tokens, they redeem them for a free coffee. Pre-blockchain this would all be done with paper or self developed apps. Now, using the Spoqa system businesses would shift to issuing tokens.
Lastly, all of the data collected by the Spoqa terminals will be aggregated and sold off to third party advertisers and analytics companies, who obviously would have to pay for the data using CRE. Based on the data, they could tailor custom coupons or discounts to offer to their customers.
It’s a nice well rounded ecosystem, however, I do have some issues.
First, the team has not made it clear if Carry Protocol can be easily adapted to be used by other POS systems. In its first few years, it may just be offered for Spoqa using customers, which would severely limit its growth. 10,000 systems may sound like a big number, but it’s not. There are hundreds of millions of these devices around the world and most are not iPads. More so, Spoqa is Korean/Asia based and does not have any footprint in Europe. Thus, I’m very worried about the long-term growth and use of Carry Protocol. This market is saturated and controlled by a few very large players. I would be suspect if I thought they could make a big enough dent to drive major adoption.
Second, while I love the idea of branded tokens, it’s not a widely used method of client retention.. yet. A grandmother is not going to get rid of her paper coupons to start using a crypto wallet. Coupons also don’t need to be on a blockchain, they can be kept in a company database, without the need for expensive decentralization. I don’t even really care if Starbucks controls my free coffee; and if for some reason my coupon disappeared, I’m pretty sure they would issue me a new coupon without too much fuss.
Third, I’m not sure how necessary it is for the CRE token. All of their POS system data can be stored on a regular database, why does it need to be stored in a decentralized manner and why must companies go out of their way to purchase CRE tokens to acquire sales and transaction data.
All in all, while the project sounds cool, I think it’s growth is quite limited and there is no necessary blockchain use case for their idea. The team has proven itself to be able to create a product, but I don’t think this product will have too much of an influence, yet.