The value of bitcoin may have slumped, but one US start-up is betting on the digital currency after developing an app for Hong Kong’s coffee drinkers that will allow them to pay at Starbucks with it.
The app, called Fold, is offering a 20 per cent discount to customers paying in bitcoin at the coffee chain. Starbucks is the first major global retailer where bitcoin can be used in-store.
The app works through stored-value payment cards such as Octopus, which can be synced with the user’s account on the app.
Matt Luongo, founder and chief executive of the firm that built the app, said he hoped it would provide a turning point after bitcoin’s troubled past.
“I hope [Starbucks use] helps raise awareness. Bitcoin needs to erase its past," Luongo said. “People see it as a scam and speculation, but I’m looking forward to showing them how to get cheaper groceries."
Luongo said the Starbucks discount was a bid to “drive more usage" because “bitcoin is difficult to use" without an incentive.
Michael Chau Chiu-lung, an associate professor at the University of Hong Kong’s faculty of business and economics, said any move to allow bitcoin to be spent was “helpful".
“This app is more of a help for the merchants in my view, but giving a discount is certainly a good way to attract more people to use bitcoin," he said. “Such incentives may encourage customers to overcome the hurdle of using bitcoin."
He said the jury was out on “whether consumers are willing to adopt it".
Hundreds of delegates are expected to attend Hong Kong’s second bitcoin conference today and tomorrow in Wan Chai, despite the value of the currency slumping to US$242 a piece, down from US$1,242 at its height.
Since bitcoin emerged, it has allegedly been used for illegal drug purchases and money laundering.
In Hong Kong, some 150 people reported they had been defrauded by local trading platform MyCoin, saying they had lost of total of HK$100 million.
Fold is able to offer the Starbucks discount by buying US dollars from unwanted Starbuck Cards – the coffee chain’s own stored-value payment card – at a low price and passing on the savings to bitcoin users.
Leonhard Weese, president of the Bitcoin Association Hong Kong, said: “The Fold app is a great demonstration of how smooth it is to pay with bitcoin. I’m sure other retailers are watching closely, and we will see more of this soon."
“Starbucks has always been a leader in mobile payments and will continue to drive innovations that will enhance customers’ digital experience,” a Starbucks spokesman said.
Correction: A quote was corrected to clarify that Starbucks is not currently working with Fold.
Source from SCMP