Bitcoin payment gaining in popularity

Bitcoin usage is starting to gain interest in the electricity sector, writes Sasha Bermann, EU Advisor, Danish Agency for Technology.
Published: Thu 23 Jun 2016

Early into 2014 the Dutch energy supply company BAS Nederland started accepting direct Bitcoin payments from residential energy customers. BAS is, according to various reports, the first energy company in Europe to accept this payment solution directly.

BAS’s unique offering, called the ‘Path to Zero’, is driven by a philosophy of enabling consumers to achieve complete energy independence.

The company’s mission statement reads: “BAS’s mission is to help energy users on their path to energy independence, and thus empower a society to make use of 100% renewable resources. They enable their clients to implement reduced energy consumption and clean energy production without the need for upfront investments. BAS’s Path to Zero product promises a 30% saving in fossil energy use in the first 4 years. By now accepting Bitcoin, BAS offers its customers an innovative, exciting and alternative investing option in the normally conservative energy industry.”

The thinking behind the mission is that BAS customers will gradually receive less and less energy, because they will be working with BAS to provide energy for their own homes. In an interview with Cryptocoinsnew, BAS founder, Arash Aazami said: “Just like BAS, Bitcoin has the purpose to increase people’s independence. It tries to give them the possibility to create their own values. It appeals worldwide to people that want to detach themselves from the deteriorating systems that define the ‘old world’.”

Nearly a year later, Italian energy supply company, Nordovest Energie, started offering a similar service for both commercial and residential customers. Catia Rossi, CEO at NordOvest Energie, said in a press release: “Being the first utility company in Italy and the second in Europe to offer this feature to our customers is a great source of pride for us.”

Around the same time as Nordovest Energie launched their new service, a Belgium counterpart announced the same initiative. The Belgium-based green energy supply company Elegant likewise started to accept direct Bitcoin payments in 2015. Elegant announced that they launched the service after receiving requests from their customers to do so.

In other words – this is a service being created and deployed due to actual customer demand.

Bitcoin usage for bill payments is increasingly popular in other parts of the world too, with places such as Australia offering these options, along with other countries such as Indonesia. The service has been fairly widely used in other parts of the world such as the United States and Canada since 2014.

The Bitcoin opportunity for utilities

What does this mean for those customers and utilities making use of the Bitcoin payment opportunity?

The need for traditional banks and their services is reduced. The ‘new’ payment technology/platform holds the potential to disrupt the financial establishment – thus mirroring the situation in the energy markets, where new technology is indeed also stirring things up.

How does it work paying a bill with Bitcoins?

In terms of paying your utility bills with Bitcoins, there are two main ways of doing so: If your utility accepts Bitcoin payments (direct Bitcoin payment), you may pay your bill via their billing and payment system. This can be set up in a number of ways – at this stage, because this service for utilities is in ‘development’ stages, there is no standardised set up.

Chances are that you will need a Bitcoin payment processing company as your ‘middleman’ (since most utilities still don’t accept direct Bitcoin payments) and go about the payment in the following way (non-direct Bitcoin payment):

Firstly, you create a Bitcoin wallet for yourself; this can simply be done by going to the app store on your smartphone and downloading it, so it shouldn’t take more than a moment. You can also have the ‘wallet’ on other smart devices.

Secondly, you get yourself some Bitcoins; they can be mined, purchased online on one of the many trading platforms or depending on where you live you may also be able to go to a local Bitcoin ATM and exchange your local currency for Bitcoins.

Thirdly, you choose a Bitcoin payment processing company; this company will facilitate your payments, more or less like a bank. You would need to register with the payment processing company, enter the payment section and fill in the relevant information. The usual information includes whom you would like to pay, your billing reference and the amount to be paid. Hit ‘pay’ or ‘enter’ – that’s it. This should be processed within a minute or so.

That’s it. It’s a fairly easy process that shouldn’t take up much time. Go ahead, try it!

Bitcoin for meter top-up in South Africa

In South Africa, Bankymoon, a startup that produces digital payment solutions, has launched an application for meter top-up using the digital currency Bitcoin.

Bankymoon’s integration of Bitcoin payments into smart metering systems allows users to ‘send’ electricity, water and gas to any recipient anywhere in the world to top up their utility meters, reports Bitcoin magazine.

Founded in 2015, the company gives smart meters their own Bitcoin addresses. When a smart meter receives a Bitcoin payment, Bankymoon then calculates the tariff and loads the meter.

Lorien Gamaroff, founder and CEO of Bankymoon, said at a recent conference in Cape Town: “The power of Bitcoin lies in the ability to program functionality to automatically respond to payment transactions.

“Unlike bank accounts, Bitcoin addresses can be monitored by predefined processes which can trigger automated actions. These actions can form part of a workflow, which will only proceed once Bitcoin transaction has been detected.

Gamaroff continued: “Imagine a student abroad who needs to have their meter topped up. They’d phone their parent and ask them to send money. The parent now doesn’t have to remit anything. They can just go and top up the meter using Bitcoin.”

The same model permits donating to needy institutions, for example schools and hospitals, by directly contributing to their utility bills.

Payment solution for world’s unbanked population

Gamaroff said the application represents a payment solution for the large unbanked populations in the developing world by bypassing banks and credit cards.

He said: “You’d think that with all the smartness happening in our grid, that the problems are solved. But in fact this brings us to the most difficult and biggest problem of all, which is payments.

“Your grid could be as smart as you like but if all customers aren’t paying, it’s worthless and it becomes unsustainable and will collapse.”

The Johannesburg-based company is also implementing features that would enable people to pay in alternative currencies such as Lightcoin and Dogecoin.

This article first appeared in Metering & Smart Energy International, Issue 1 2016.

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