Canadians will soon be able to make digital transactions in their country’s fiat currency. If the owners of the digital currency platform, MintChip, have their way, other fiat currencies will soon follow. Toronto-based Loyalty Pays Holdings corp., a subsidiary nanoPay, a loyalty and payments platform provider, has acquired the assets of MintChip, a digital currency developed by the Royal Canadian Mint.
MintChip uses secure asset stores to move funds that any national currency can recognize, nanoPay noted. Funds can be exchanged without an intermediary, both online and offline. The process reduces the cost of transactions by enabling real-time settlement.
“Canadians can now look forward to the evolution of MintChip as nanoPay explores the full potential of this digital payment technology in the global marketplace,” said Bob Zintel, senior director of finance at the Royal Canadian Mint in a prepared statement. “This transaction, which was conducted through an open, transparent divestiture process, allows MintChip to move to its natural next step of commercialization in the private sector.”
Laurence Cooke, nanoPay founder and CEO, said digital cash will ease the transition from cash to cashless payments globally. nanoPay is seeking to partner with commercial banks, central banks, retailers, acquirers, telcos, developers and point-of-sale providers.
The Royal Canadian Mint developed MintChip in 2012 as a fiat alternative to bitcoin, according to Forbes. The Mint even ran a competition offering coins and gold bars worth $50,000 for tech enthusiasts to create applications using the MintChip.
The divestiture process, overseen by Origin Merchant Partners, an investment bank, included three rounds of bidding among 10 companies. nanoPay won to the final round where they had a period of exclusivity to negotiate the terms.
Cooke said the MintChip transactions are faster and lighter than bitcoin, according to the International Business Times. The biggest difference, however, is that MintChip is “regulator-friendly.”
MintChip can support an unlimited number of currencies. It is launching in Canada (CAD), to be followed by the U.S. dollar and the U.K. pound. Cooke said he hopes to be eventually in all currencies.
nanoPay could use the technology to represent loyalty reward points like air miles.
Cooke said the company views its loyalty reward program and MintChip as complementary, but the products will be offered as stand-alone services. Both services eliminate the overhead involved with cash, such as services fees and transporting it to banks. Digital currency also reduces the risk of theft.
A major benefit is transaction cost will be fixed and at a rate much lower than that of cash.
MintChip formed a partnership in 2012 with Ingenico S.A., a France-based payment solutions provider, to develop a wireless point-of-sale terminal for merchants to accept MintChip purchases. Ingenico remains a partner, Cooke said. Ingenico is the market leader for POS terminals in Canada.
Cooke said a MintChip app will be available on Android and iOS, followed by Windows Phone and BlackBerry.
nanoPay will also release the MintChip code for open development and will publish APIs to encourage third-party developers to make apps.
Images from Shutterstock and nanoPay.