Mint sells off dig­i­tal pay­ments plat­form

Bit­coin-like Min­tChip to go com­mer­cial

National Post - (Latest Edition) - - FINANCIAL POST - Bar­bara Shecter

• Min­tChip, a dig­i­tal cash plat­form cre­ated by the Royal Cana­dian Mint, has been sold to a pri­vate loy­alty and pay­ments com­pany, nanoPay Inc., which plans to roll it out com­mer­cially this year.

Terms of the trans­ac­tion to be an­nounced Tues­day were not dis­closed, but sources said the Royal Cana­dian Mint will re­cover the in­vest­ment made in de­vel­op­ing the tech­nol­ogy.

The Mint hatched the idea of cre­at­ing a dig­i­tal cash plat­form in 2012, the same year it phased out the penny, at a time dig­i­tal cur­ren­cies such as Bit­coin were tak­ing off.

The tech­nol­ogy, dubbed Min­tChip, was de­signed by Bri­tish cryp­tog­ra­pher David Everett and tested as a means to trans­fer cash dig­i­tally be­tween two par­ties with no in­ter­me­di­ary.

De­spite the ini­tial fan­fare around the Cana­dian Mint’s dig­i­tal cur­rency, it emerged in 2014 that the Crown cor­po­ra­tion and the fed­eral Depart­ment of Fi­nance were ex­plor­ing sell­ing the Min­tChip as­sets rather than seek­ing to de­velop them be­yond ini­tial small-scale test­ing.

In a state­ment, Bob Zin­tel, se­nior di­rec­tor of Fi­nance at the Royal Cana­dian Mint, said this week’s sale to Toronto- based nanoPay will move the tech­nol­ogy, along with its five pa­tents, “to its nat­u­ral next step of com­mer­cial­iza­tion in the pri­vate sec­tor.”

The buyer i s an earlystage fin­tech com­pany that has de­vel­oped sin­gle- use trans­ac­tion to­kens that com­bine pay­ments and loy­alty re­wards, with mer­chants able to col­lect and use anony­mous cus­tomer data.

Lau­rence Cooke, t he founder and chief ex­ec­u­tive of nanoPay, said the ex­ist­ing busi­ness will be com­ple­men­tary with the de­vel­op­ment of Min­tChip, which uses “se­cure as­set stores” in the cloud to move funds be­tween par­ties with­out a cen­tral au­thor­ity.

Un­like Bit coin, a plat­form that hosts a cre­ated cur­rency that is not backed by any na­tion or govern­ment, Min­tChip is de­signed for gov­ern­ment­backed, or fiat, cur­ren­cies. How­ever, Cooke said it could be adapted to han­dle loy­alty re­wards as well.

He said nanoPay plans to ini­tially in­tro­duce Min­tChip com­mer­cially us­ing Cana­dian cur­rency, which has al­ready been tested on a small scale for six months by t he Royal Cana­dian Mint. If all goes well, U.S. and Bri­tish cur­rency could be added.

In an ef­fort to in­crease ac­cep­tance and bro­ker wider use of Min­tChip, nanoPay has ini­ti­ated talks with banks, re­tail­ers, tele­com com­pa­nies, and firms that pro­vide pay­ment- pro­cess­ing ser­vices to mer­chants, Cooke said.

The fin tech firm aims to make money by tak­ing a small, fixed fee for each trans­ac­tion that uses Min­tChip.

“Our fo­cus is try­ing to re­place cash, and cash is quite ex­pen­sive for re­tail­ers,” Cooke said, adding that Min­tChip would sig­nif­i­cantly re­duce the costs as­so­ci­ated with pro­tect­ing, count­ing, and mov­ing cash.

Cur­rent clients of nanoPay are mainly con­ve­nience store oper­a­tors, and Cooke said the ac­qui­si­tion of Min­tChip has prompted the firm to seek a fi­nanc­ing part­ner.

He hopes to be able to an­nounce that part­ner­ship by Fe­bru­ary.

When Min­tChip was rolled out, it was billed as an i nstant, pri­vate, and se­cure dig­i­tal c ur­rency, with the reg­u­la­tor- friendly back­ing of a govern­ment. But the con­cept drew some de­trac­tors, who said a key ben­e­fit of a crypto- cur­rency such as Bit­coin was lost in a cen­trally con­trolled dig­i­tal cur­rency that is sub­ject to a coun­try’s mon­e­tary pol­icy.



Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.