171130 Conditional Payments

ezpassOne area to which cryptocurrency will undoubtedly be the frontrunner is conditional payments.  In a conditional payment, the amount owed varies based upon conditions that are part of the sales agreement.  There is a system in the Northeastern United States called EZPASS to pay for toll roads on highways.  For example, EZPASS allows the highway authority to charge a varying amount based on the distance traveled.  In downtown congested areas, EZPASS could be set to charge more based on the amount of traffic or time of day.

When the automobile passes through the tollbooth, the highway authority scanner registers the EZPASS account.  When that same automobile passes through the tollbooth again, the amount of the transaction is computed and the account is charged.  That is a conditional payment.  The reason we can’t use credit cards directly for these transactions is credit cards were not designed to accommodate those two-step transactions, log-in to check-out.  A cryptocurrency could be designed to do just that.

For the same reasons, the New York City subway system cannot accept credit cards as payment directly.  Passengers must purchase a Metrocard with a credit card or cash and then swipe that card when they go through the turnstile.  Different passengers make different kinds of subway purchases, e.g. monthly passes, single rides.  The credit card would not know that the charge was anything other than a single fare.  A cryptocurrency could be designed to understand that the passenger purchases might be more beneficial when purchases as a monthly pass and charge the difference under certain circumstances.

Ohio Governor Turnpike

171102 Dear Governors Andrew Cuomo (NY) and Chris Christie (NJ)

Ohio Governor TurnpikeDear Governors Andrew Cuomo and Chris Christie,

Drivers from New York and New Jersey pay four billion dollars a year in tunnel, bridge and highway tolls.  That costs our states about $100,000,000 in credit card processing fees when EZ PASS replenishes consumer’s accounts.  Stop our money from being wasted.

New York and New Jersey should create design specifications for a Bitcoin payment system throughout the two-state network of highways.  That should consist of converting EZ PASS to use Bitcoin on the backend, replenished by consumer Bitcoin wallets setup to work automatically as credit card payments do now. Along with that create the specifications for iOS and Android apps that would let consumers monitor their Bitcoin wallet payments.  Those could be distributed freely.  Then, whatever amount is appropriate, say $10,000,000 for argument sake, would be awarded to the technology or finance company that submitted the winning proposal for them to do the work. If no hardware change was necessary, if the current EZ PASS system works with a Bitcoin backend, the entire project might not cost very much at all.

Consumers would take care of the rest.  The costs to pay the $1.50 to $15.00 tolls via Bitcoin would be next to nothing; there are no fees for Bitcoin transactions.  As old EZ PASS’s are swapped out for the new ones, consumer accounts would be tied to Bitcoin exchanges instead of banks.

There should be an early 15% conversion rate amongst consumers, more if they were given even a nominal discount for using Bitcoin.  Besides, it would just be cool.  The minimal credit card charge per transaction at present is $0.35 plus a percentage of the cost of the transaction.  Eliminating that fee from the toll would be incentive enough.  Stop the wasteful payments.