EFFICIENT, DECENTRALIZED, SCALABLE PAYMENT FRAMEWORK
“Ethereum Cheques” is the payment framework for use by banks and credit unions. The legal backbone of the system is Checks 21 or the analogical corresponding regulation for substitute “paperless” checks, if not in the US. Technically, transfers of checks’ “replicas” take place in the form of tokens travelling over Ethereum blockchain. To use Ethereum checks, consumers and merchants operate the mobile application that incorporates no critical data transfers. This hybrid structure allows users to combine advantages of both legacy and cryptocurrency worlds and assists banks to apply blockchain innovation at minimum costs and efforts.
ETHEREUM CHECKS ARE PAPERLESS, MOBILE, SECURE, AND FAST
Each check that is run over Ethereum checks framework can be imagined as a normal paper check but traveling for free with a free wireless microchip embedded. That chip is connected — in an imaginary sense, of course — to the Internet, also free of charge, in a 100% secure mode. Monitoring status of checks along the way — from signing to endorsement and further on — certainly is a valuable addition to the issuing bank’s business toolset. The legit juggling of fees can now be adjusted on-the-fly. Ethereum checks create an alternative informational layer, while processing framework stays incumbent.
ETHEREUM CHEQUES REDUCES BANK'S DEPENDENCE ON OLIGOPOLY OF CENTRALIZED PAYMENT NETWORKS SUCH AS VISA
The straight-forward benefit for banks to implement Ethereum checks is the potential to increase revenues and cut costs. More than one factor can account for that. First of all, the revival of currently deprioritized check payments—this time in a smart blockchain incarnation and convenient mobile application form—allows reducing the share of payment business where large royalties have to be paid to middlemen such as VISA. Secondly, checks become truly paperless and more convenient which potentially increases the size of payments business itself. And last but not least, blockchain technology comes with significant costs reductions across many business segments and along most stages of a check life-cycle.
ETHEREUM CHEQUES IS BALANCED AND TIMELY HYBRID
OF GREAT TRADITION AND LATEST TECHNOLOGY
Artwork by Alejandro Burdisio
Besides immediate benefits, there are also long-term strategic advantages. Reduced dependence on centralized payment networks will allow banks to regain full control of all payment related processes. With no middlemen, direct relations with clients flourish, building a solid loyalty foundation. The absence of controversially high interchange fees and non-involvement in anti-monopoly cases help to maintain a stronger bank brand. Mobile technology allows merchants to save a lot of money on point-of-sale infrastructure. All factors mentioned add up to perfect secluded relations with merchants and consumers which give a bank the great strategic advantage.
FOUNDATION AND MANAGEMENT TEAM
This project aims to develop the minimal viable product by the end of 2017 (partly based on existing products by Everex). The software will be an open source to large extent and free to use during the first several months. We plan to charge a minimal fee in a range of USD0.01 per check once the product is well tested and accepted by the pilot market.