Cyphermint, Inc.
http://www.cyphermint.com
241 Boston Post Road West
Marlborough, MA 01752
Phone 508-481-6400

I've been keeping my eye on the Cyphermint (www.cyphermint.com) and related PayCash system for the last couple of years. I think it is about to go big time in the US and certain kinds of merchants should take notice. Cyphermint has developed a partnership with 7-Eleven which involves placing kiosks in 7-Eleven convenience stores that accept cash rather than credit cards for Internet payments. Right now it's being rolled out in the US, with about 900 kiosks in place so far.

This is the first time that people who don't have access to credit cards can pay cash for Internet transactions in the US, and is quite significant for merchants for four reasons:

• Young people who don't have access to parents' credit cards can now pay cash at the local 7-Eleven to set up a Cyphermint account for purchases of CDs, clothing, video games, hobbies, etc. It opens up a big youth market to online sales.
• Adults without credit cards can now order by computer -- at the 7-Eleven kiosk, at their library computer, or on a home computer, if they have one. This opens a market to the cash-only segment of our culture.
• Russians and Eastern Europeans who are using the PayCash system can now purchase goods and services from merchants who have Cyphermint and PayCash payment systems, opening up a potentially large new market to merchants.
• Micropayments for viewing content may now become possible via PayCash/Cyphermint, since service fees are not charged on transactions, but when money is withdrawn from the system.

Remember the various cyberwallet schemes in the 90s? With the momentum that the 7-Eleven deal is giving to Cyphermint, they may finally capture a big enough marketshare to become the de facto e-wallet standard -- perhaps.

How the System Works

I'm over simplifying, here, but here's how the system works:

1. Customer opens PayCash account which installs as a wallet on his or her PC. There is no account set-up or maintenance fee.
2. Customer adds funds to the PayCash account. In the US, funds can be added to a US dollar account using the following methods: bank funds transfer, personal checks, e-checks, money orders, cashiers checks, Western Union, scratch cards, and PayPal. Money could also be added at a Seven-11 kiosk. In other countries, funds can be added by wire transfer, Western Union, personal or cashier's check. 
3. Customer makes purchase through PayCash equipped merchant.
4. Merchant receives funds, typically by ACH deposit (in the US), bank transfer, wire transfer, or Western Union.

How fees are paid varies from one country to another. US Dollar transactions (handled by Cyphermint in the US) charges 2% only upon withdrawal from the system, having reduced their rates from 3% when they found that chargebacks, common with credit cards, are not a problem.

Soon PayCash customers, in the US at least, will have access to the PayCash Total Access card, what amounts to a prepaid debit card that can be used in stores, online, and at ATMs. It will be able to draw on funds deposited into a PayCash account.

Merchant Systems

The Seven-11 Kiosks are getting started with some high profile businesses who can sell by cash deposited in the kiosks: eBags, BestBuy, 1-800-Flowers, BareWalls.com, CarFax, JewelrySprite.com, Infopia, Corporate Sports Incentives, USA Bouquet, eFast Advance, and QuickGifts. So far, much of Cyphermint's programming team has concentrated on getting these sites equipped.

Small business applications are coming more slowly. Currently, the merchant-hosted Cash Register solution is available, with ASP and ColdFusion script examples and some Perl scripts (in Beta). Java is expected soon. Another option is a Cyphermint-hosted solution. With the latter, the merchant receives an encrypted purchase confirmation via PGP encrypted e-mail. US merchants would receive funds via ACH bank deposit.

Bottom Line

I see Cyphermint/PayCash as an important system for small merchants, especially as it gains recognition and use via its connection with Seven-11. In a few years it may open up markets with young teenagers as well as the possibility for micropayments. Currently, it could open up a market with PayCash users in Russia, the Ukraine, and Latvia. Stay tuned.

Related sites:

PayCashEuro http://www.paycasheuro.com  Outlines the PayCash system in English for european users.

FxSpeed http://www.fxspeed.com  Allows exchanges from one form of electronic funds to another -- US dollars can be exchanged in e-gold, Cyphermint, and PayPal. In addition they exchange to PayCashEuro, PayCash Ukraine, Yandex Money (Russian Rubles), and PayCash Latvia. WebMoney (e-WMZ and e-WMR) is currently under development.