–Copyright The Associated Press, 2016
By Lisa Thompson, Washington D.C.
For the past couple decades, retailers and suppliers have relied on a very predictable model of selling goods. A customer enters the store (or in recent history, accesses an online store), spends an unknown amount of time deliberating a purchase, and then either purchases the product or exits (or logs out from) the store. Secondary activities such as advertising and post-purchase follow-up sometimes occur, but the entire routine is very predictable.
Massive amounts of time and money are spent facilitating each step of these purchases. What if steps in the chain could be removed, thereby decreasing expenses for retailers and enhancing the customer experience?
This is at the core of what the NuBits “Merchant Support” team has been trying to accomplish the past six months. NuBits is a stable digital currency that has maintained a $1.00 US value since its release a year and a half ago, and has quickly become a competitor with Bitcoin in the digital currency payments space.
The NuBits “Merchant Support” team has partnered with Subway restaurants to create an app that allows customers to order sandwiches in advance of arriving at a restaurant. I met up with local Nu developer Ben Rossi to try the app out.
“The first step is download Subway’s “NuBites” NuBits app.” says Ben. “It’s free, and works well on the Galaxy S8 mobile phone I’m using right now”. He hands me the phone and I’m greeted with a Subway logo and pleasant music. After clicking on the logo, some green text appears that says “Step 1: Find Your Location”. I click the nearest Subway restaurant logo on the Google maps layout. The app zooms in, and an identical screen pops up again, but this time with a “Step 2: Place Your Order” button displayed.
I click it, and the screen is divided up into 6 categories: sandwiches, soups, salads, cookies, drinks, and other. In the rush to fight through D.C. traffic I had neglected to eat lunch, so I clicked “sandwiches”.
Six sandwiches popped up on the screen, with arrows at the bottom indicating there were a couple other pages to choose from. Hunger was not my friend, so I decided on a hearty steak and cheese sandwich. The next screen asked for me to choose my bread (whole wheat), and the next screen asked whether I wanted it toasted or not. After that, I was presented with 8 potential things to add to my sandwich (I chose cucumbers, spinach, and avocado). The last screen asked if I wanted to make it a combo, to which I declined.
The whole process took me less than two minutes to navigate through. So what happens next?
“That’s the best part!” exclaimed Ben. “You can see on the map that we’re a three-minute walk from Subway. Let’s go there, and I’ll show you something amazing.”
Just prior to entering the Subway store, Ben clicked on the “Make Payment – 9.85 NBT” button on the NuBites app. A QR code popped up. Ben walked up to the counter, scanned his QR code at a small terminal by the cash register, and was handed my sandwich. The amazing thing? He didn’t stop walking. He literally walked in and out of the store with the sandwich I ordered.
After demolishing the sandwich in less time than I care to admit, I reflected with Ben on what had just happened. From my perspective I had ordered my sandwich in a quicker, more convenient way and avoided wasting time standing in line creating my sandwich and paying. From Subway’s perspective, they had less traffic in the store, didn’t have to handle money, and created a happier customer.
My brow furrowed. This seemed too easy. What’s the catch?
“Well”, said Ben, “you paid a 5-cent transaction fee on that purchase. That’s about a 0.5% transaction fee. It’s how the Nu network remains profitable and manages the supply of NuBits. The great thing is that it’s far less than the 2-3% fees credit card companies charge. Stores will likely happily subsidize this transaction fee by giving you a 5 cent (or 0.05 NBT) discount on your purchase because it speeds up their operations."
And there you have it. Digital currencies are not without their drawbacks, namely that there is no protection against theft, but then again neither does cash. NuBits are a quicker, more mobile form of cash that can be sent for pennies to anyone worldwide who has a free NuBits wallet on their phone. I thanked Ben for his time, and made a mental note that I might be making use of NuBites more often when I’m in a rush.
OPPORTUNITIES/TRENDS: Mobile payments, quick-release merchant purchasing, purchase freedom (location, convenience), transaction fees