A new network designed to manage payment credentials could provide a useful backdoor to bitcoin adoption in the future. Lemon Network promises to make mobile payments easier, without tying users to a particular payment processor.
The system emerged from Lemon Wallet, a popular mobile app for the Android and iOS platforms. It was a simple but powerful concept: instead of carrying your various credit, debit, and loyalty cards in your wallet, scan them, and put them on your phone. You can then use your credit cards easily (as long as you don't try to swipe them). It also featured premium services, such as the ability to monitor payment card accounts for fraud, and cancel cards with a single tap.
The app garnered millions of users – a million signed up within the first four months of its October 2011 launch, and it now has over three million. It added receipt scanning, and an update that helped to categorize and filter spending.
Now, company CEO Wences Casares is turning the app into the front end for a payment network that can work with different payment processors – and he wants to enable bitcoin as part of it.
Lemon Network is designed to take the friction out of payments, by eliminating the need to enter information manually. Because Lemon Wallet now holds so much payment card information, the company is courting merchants to connect them with customers. When a merchant enables the Lemon Network, this site will connect with the Wallet app, and enable the user to select whichever payment method they wish, from those stored in the Wallet.
“A merchant that participates in the network, via our SDK, has access to a simple checkout drop-in that simplifies the consumer mobile buying experience, and facilitates a one-tap payment,” says Casares.
He isn't the only person to try and make online payments less painful. Venmo, purchased earlier this year for $26.2 million by Braintree, supplies payment services to clients like AirBnB. That service, along with Stripe, offers one-time data entry, followed by easy, one-tap payments – but they are still payment processors, he says, whereas Lemon is payment processor agnostic.
But what does all this have to do with bitcoin? The Lemon Wallet – and therefore the Lemon Network – doesn’t support bitcoin right now, but Casares says that he wants to support it soon. Bitcoin will be a world-changing technology, he predicts.
“Just like there only one billion fixed-telephone lines worldwide, mostly in the developed world, and the emerging world leapfrogged that technology and went straight to mobile phones, reaching almost six billion now, the same may happen with banking services,” he says.
“There are about one billion people with bank accounts in the world. The rest may leapfrog that old technology and go directly to something like bitcoin, which is much better suited to their need.”
Casares has a history of disrupting financial services markets. The Argentinian-born entrepreneur founded Banco Lemon, a Brazilian bank that directly targeted low-income populations. It used an emerging model known as correspondent banking, which used simple point-of-sale equipment located in 6500 partner organisations, such as business centres, drugstores, and other retail outlets (read an analysis of correspondent banking here). Most of the outlets were located in the suburbs, or in poor downtown neighbourhoods. In short, it used technology to circumvent the barriers involved in creating a financial services network. Sound familiar?
He took this venture, founded in 2002, to a successful exit. It was purchased by Banco do Brasil, the largest bank in Brazil, in 2009, as part of quest to continue moving into untapped low income markets.
“I think Bitcoin is going to do for money what TCP/IP did to information,” Casares told CoinDesk. “[It is] probably the most revolutionary technology since the Internet itself.”
There will be challenges to overcome, of course. Bitcoin's highly centralized development team appears to be less accountable than ever to the broader user base. Its block chain continues to grow, with the potential of crippling the client infrastructure. And the uncertain regulatory landscape is creating a speed bump for the currency’s development: it will be difficult to persuade mainstream merchants and customers to adopt bitcoin until an intuitive infrastructure exists, with easy-to-use services that complement the basic currency system.
No doubt such speed bumps will be overcome. The momentum behind the currency is too great for it to simply flounder and die. But if Casares can bring an easy mobile payment system into the mainstream, grabbing his base of 3 million users, and acquiring a healthy community of merchants, it could be a good opportunity to introduce bitcoin to many people who wouldn't yet have heard of it.
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