The startup Opago will soon release a terminal that brings Lightning payments to retail, restaurants and hotels. The technology requires no fiduciary custody and even allows one of the parties to be offline.
In Ainring, a town in the extreme south of Bavaria, almost in Austria, the founders of Opago are currently experiencing exciting days: They are about to bring a payment terminal onto the market that will allow Bitcoin to be traded via Lightning.
Perhaps Opago Pay has designed the first terminal ever to focus entirely on Lightning. “The technology is now mature enough to reliably process payments for retail. We will make it as cheap and easy as possible for retailers to accept Bitcoin as a means of payment,” promises Michael Theo Dülk.
Michael founded Opago together with Bitcoin expert Michael Anton Fischer, tax advisor Frank Hilmes and Bitcoin data center operator Fabian Cotic. With Stefan Finkenzeller, who once held a leading position at BayernLB, they have recently also had a business angel and consultant on board who has a lot of experience in the world of the Fiat system.
sales are already starting
The terminal is small, handy and easy to use. It looks a little like an old smartphone for sausage fingers. It will cost 99 euros, after which a fee of one percent will be charged for each payment; there is no basic fee. From next year there will also be the option to automatically translate Bitcoins into euros and have them transferred to your bank account.
Payments are also possible offline
The technology is pretty interesting. “We never hold the customer’s money, but we still help to get the payment to its destination,” explains Michael.
That sounds magical, even by the standards of the crypto world. This is made possible by the special characteristics of the Lightning network.
Basically, the payment flows from the buyer’s wallet to the merchant’s wallet. To do this, the merchant connects his Lightning wallet to the terminal so that it can deliver a payment request with a QR code or near field communication (NFC), the destination of which is the merchant wallet.
But the payment request contains even more: it also contains the preferred route through the Lightning Network. This goes via the Opago node, with which the dealer has an account. In this way, he can use its liquidity, through which the payment is reliably forwarded. In this way, the terminal is also informed that the payment has been received.
In addition, with Opago it is possible for one of the two parties to be offline. If only the buyer has internet reception, he can inform the terminal of a successful payment using a PIN. If, on the other hand, only the terminal has reception, it can receive and send the customer’s transaction via NFC. In the future, both parties should be able to be offline, but this requires an update to the Lightning protocol.
Receiving or sending payments offline can be a crucial advantage in many places. For example, in some rural regions, where there are only a few providers with usable reception, at market stalls, at vending machines and so on.
No custody, no regulation – yet!
The terminal has recently been completed and sales are already beginning. Several dealers from Germany and companies from other countries have already expressed interest. Invitations to professional events have already been accepted, although Opago has not even started promoting their creation yet.
Despite the good conditions, Michael is clear that it won’t be easy. Technical development is often the easiest hurdle. After all, he and his co-founders were able to get around the biggest problem for German Bitcoin startups in an elegant and consumer-friendly way – regulation. They had their business model examined by BaFin, which confirmed, as hoped, that it does not require a license.
Because Opago does not keep money for others. This makes so many things so much easier. Anyone who does not hold cryptocurrencies is not a crypto custodian and is not regulated as such. There is no formal KYC requirement, even if the dealers identify themselves using the VAT ID, and there is also no travel rule.
However, this could change in the future, so the team is already preparing for this. “We don’t want our business model to collapse if regulation changes.”
Is the time already ripe?
The market could be more problematic. In order to be profitable, Opago needs a high payment volume with the current fee model – which sounds like quite a challenge in the current market environment.
There are quite a few payment providers for cryptocurrencies, both for online checkout and for in-store checkouts. For example, Salamantex from nearby Austria. For almost everyone, interest remains far below expectations, both from retailers and, above all, from customers.
Why does Michael hope that things will be different for Opago? “We have the advantage of only offering Bitcoin,” he explains. “Therefore, we have less effort and can offer our device at an unbeatable price.” In addition, Lightning is now far enough to transport payments reliably, quickly and cheaply. “The time is ripe and we are well positioned with our service. We want to make it as easy, safe and cheap as possible for merchants to accept Bitcoin as a payment method. Even a cash register to accept cash is more expensive and you then have to take the money to the bank. Not to mention the credit card fees.”
But isn’t acceptance much more likely to fail because customers aren’t interested? Because most people leave their Bitcoins on exchanges and don’t want to pay with them at all?
Michael is convinced that many people are like him: He would love to pay with Bitcoin more often – but there are no options to do so. “I think it’s a chicken and egg problem: you have to start with a lot of acceptance points so that people can spend Bitcoins instead of changing them back.” He is betting “that the future works for us. Just like basically every Bitcoin startup. I think we’re still at a relatively early stage.”