There's always been a lot of hype around Bakkt, starting from the announcement that the company behind the New York Stock Exchange was teaming up with Starbucks and Microsoft to form a company completely revolving around crypto.

Since their launch they even managed to exceed expectations, but they also have a lot in the works being built away from the spotlight.

A source who would know (that's as descriptive as they're allowing me be) was able to give an update on some of what Bakkt has been working on behind closed doors.

They're attempting to tackle some of crypto's top issues - adoption, and real world use. 

They'll be doing it with products intended for both sides of a transaction, my source explained:

"For the everyday person there's going to be an app for iOS and Android, with this you can buy select cryptocurrencies, or use it as wallet and simply deposit cryptocurrency obtained elsewhere. But this wallet isn't going to be marketed as 'storage' like others - this wallet is where you put the crypto you want to spend."

So with the wallet for the customer, next comes the merchant...

"The other half of will be the merchant services. The goal here is for any business to be able to implement this without any learning curve.  Any business that currently takes Apple Pay or Samsung Pay - their employees already know everything they need to know." 

Others have attempted similar - so what's different about Bakkt's solution?

There's dozens of companies currently trying to be the one to bring crypto to the real world, but Bakkt believes they're the first who actually can.

That's because funds available in the app will be guaranteed by Bakkt, and they believe their promises carry clout that other startups simply do not.

As we've all experienced, sometimes transactions can take longer than we want, and WAY longer than you'd want to stand at the counter of a business awkwardly waiting for it to clear.

But any funds sent via the app will clear instantly, at least as far as the merchant and customer is concerned - even if the actual transaction on the blockchain lags behind.

"Bakkt basically pays for it, then gets reimbursed a couple minutes later when the crypto transfer is complete" my source explained.

Merchants will have the option to have the transaction deposited to them as USD, or keep it in crypto.  Which is another huge point as crypto's volatility can scare some businesses away from using it, but the ones using Bakkt's merchant solution can rest easy knowing they'll receive the exact amount they charged, in USD, even if the customer paid in crypto.

Launching With A Retail Powerhouse -  Starbucks!

Possibly Bakkt's biggest advantage - Starbucks will be giving these products a massive jump start as the first business you'll be able to pay with crypto at using the Bakkt wallet.

This isn't just a way to get a lot of people to download the wallet, it's a selling point that will convince a lot of merchants, as my source explained:

"Any merchant on the fence will be convinced when they hear Starbucks trusts this tech at their thousands of locations.  There's always one nearby, so we can encourage them to simply try it themselves. Once they try it themselves they will see, there's no good reason not to implement it."

Bakkt aims to have everything ready to go in the first half of 2020, followed by plans to roll out additional features like rewards that encourage continued usage and growth.

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Author: Ross Davis
E-Mail: Ross@GlobalCryptoPress.com Twitter:@RossFM
San Francisco News Desk

Am I dreaming?  This can't be true.

If major retailers were REALLY accepting cryptocurrencies - there wouldn't be a crypto message board, subreddit, or telegram channel where you could avoid hearing about it, even if you wanted to. 
It would be the biggest story of the week! Probably of the month... actually, maybe so far this year.

I bet it's just another Visa or Mastercard debit card that just converts your crypto into USD.

...This is the mental roller coaster I took a ride on, until taking a closer look and arriving at the conclusion i'm still in shock over.

IT'S REAL!

And I just bought my dinner from Whole Foods, in all crypto.

Let's rewind a bit -  technically, I first heard of this last week when a member of the team I sent to cover Consensus (for those unfamiliar, it's a big annual conference centered around blockchain/crypto in NYC) met someone from the company behind this, and going over the team notes afterwards, we all brushed it off.

For good reason - several times now, we've been contacted by marketing people from companies using verbiage like 'Now you can buy that coffee with crypto!' to grab attention, then it turns out to be a debit/credit card that automatically sells crypto to cover any transactions you use it for.

Not only would another one not be newsworthy, but these crypto-funded Visa/Mastercards are kind of awful. The big advantage of accepting and using crypto is freeing both customers and retailers of the hefty fees that feel small at the time, but seriously add up.

Let's use Starbucks, and the fees of a popular credit/debit card processor for example.  The Starbucks store could do 1000 transactions throughout the day, paying about 15 cents each time - that's $150 in fees in a day for 1 store - now imagine having 28,000+ stores just in the US.

Lowering those costs is an appealing idea, but these crypto debit cards typically double the fees, first the exchange of your crypto to USD, then the usual credit card processing fees, and that's why we've come to ignore someone telling us about using crypto in stores.

BUT... IT'S NOT A CRYPTO DEBIT CARD!

The stores involved actually oped-in, and the solution requires access to some of their internal resources.  That's worth noting - these retail giants are actively seeking, and are involved in finding a way to take crypto payments.

The company behind it is called Flexa, and how they're doing it is one of those 'I can't believe someone didn't think of this earlier' simple solutions.  Stores do not pay a processing fee when you purchase something using one of their own gift cards - and Flexa taps into this system.

No, you don't actually purchase a gift card - you're just piggybacking on the payment processing network that handles all of those transactions!

I'm guessing behind the scenes it works like this:  I first sent some Ether to my wallet address in the app, when it came time to pay I held up my phone where a QR code was on-screen, the store scanned it, the bill was a little over $20.

This must be where the QR code the app generated indicated that this is a transaction paying with crypto via Flexa, and the app already verified I have the funds - so the store then instantly generated a $20 gift card,  charged it, and that's it - transaction complete!

The user will have that amount worth of crypto deducted from their wallet, and at the end of the week (or month?) Flexa sends the funds in USD to the retailer in one lump sum. Before, there would have been thousands of those small fees for each transaction, now they're all just... well, gone.

An instant revenue boost for the retailers using it - a big one too!

Starbucks serves 8 million cups per day, if just half of those are on credit/debit card, and those cost them $0.15 per transaction - that represents a $600,000 per day or $18,000,000 per month loss that any company would love to lower.

A BIG ANNOUNCEMENT LIKELY COMING SOON - BUT WHY SO QUIET NOW?

Officially, all this is in beta testing. 

But from what I can see - it's built, it works, and the ability to handle the transactions is live and functional - the App is even in the Apple App Store. (Note: Flexa is the company behind it, but the App is called Spedn)

Unfortunately, while it'sin this beta testing phase you won't be able to get past the home screen without an invite code.

But I was able to get my hands on an invite, no one said I couldn't share these - so here's some screen shots!


Suspiciously missing from the list is Starbucks, but it is confirmed to be working at their stores.  This could either be because the announcement is being saved for marketing purposes, but others have speculated that they may be pursuing another solution through their own crypto venture Bakkt.

Current coins supported are Bitcoin, Bitcoin Cash, Ethereum, and Gemini's stable coin

So what's next?

I honestly have no idea, this seems ready to go - and that's why i'm predicting an official public launch is coming literally any day now! 

Looking a bit further into the future, i'm also predicting Square will be providing this same ability to smaller independent retailers, of which they have millions. They can update their point of sale hardware remotely, no new equipment needed.  Their mobile app 'Square Cash' already has the ability to buy and hold Bitcoin, and convert it between BTC and USD - it's practically ready to go already.

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Author: Ross Davis
E-Mail: Ross@GlobalCryptoPress.com Twitter:@RossFM
San Francisco News Desk


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