Less than every tenth purchase transaction in Sweden is made in cash. Sweden’s well-functioning IT infrastructure drives the marginalization of physical currency, which makes the Swedish payment market very sensitive to disruptions and downtime. On the other hand, there are countries with poorer IT infrastructure where too many digital transactions fail. The innovative IT company Crunchfish has developed a solution for offline payments which means that the payment always works seamlessly.
The development towards a cashless society has its advantages, but today Sweden is facing a future where it may completely lack a means of payment that works offline. Downtime and longer online disruptions will then risk paralyzing the whole of Sweden. The Swedish Riksbank is considering meeting this challenge through a digital e-krona that has been discussed in three webinars moderated by Crunchfish. For the e-krona to work offline, radical new thinking and new technology is required. Crunchfish’s patent-pending offline solution complements all types of digital payment services, as it works seamlessly even if both the payer and payment recipient lack an online connection.
– The offline transactions are digitally signed by the payer and are earmarked for the recipient. Debiting takes place against a balance in the mobile and is therefore guaranteed when the recipient verifies the payment offline. The transactions – which are saved by both parties – are settled when one of the parties goes online, explains Crunchfish’s CEO Joachim Samuelsson, who is a serial entrepreneur and technology pioneer with over twenty patent applications and grants within digital payments and proximity-based interaction.
Integration directly with the payment rail provides enormous scalability
The offline solution is a ground-breaking idea and the need for such a solution is extensive, especially in countries with poorer IT infrastructure. Joachim exemplifies with India; on the UPI rail for immediate payments, more than 2 billion payments were transferred in October alone. However, at some leading banks more than 5 percent of the transactions failed, prompting the Reserve Bank of India to actively urge the market to facilitate offline payments.
– The interest in Crunchfish’s offline solution is great as it is a turnkey solution that eliminates the overload on bank servers as well as risks of disruptions and downtime. It can be integrated both with individual mobile wallets but also directly with the rail for immediate payments, the card infrastructure and used in Central Bank Digital Currency solutions, e g the Swedish e-krona. It creates enormous scalability because we reach all mobile wallets that use the rail with an integration. We are already in partner discussions with several international companies about offline payments on their rails.
Secure and seamless solution makes the payment market robust
Offline payments are a welcome addition as it makes digital payments more robust. When it comes to security, the same proven technology is used as for tokenized card payments where the offline transactions are signed digitally from a secure element in the payment app. The transaction is transferred to the recipient with any type of proximity-based interaction, for example QR or BLE, to be verified in an offline-mode with an application running either on a mobile phone or a PC.
– Crunchfish’s vision is that we will pay offline by default, just as it has always been with cash. If you need access to more money than what is available in the mobile wallet then you connect online. In offline mode, the transaction is instant and always frictionless because it is independent of anything that can get messed up online. All in all, our offline payment is an exceptionally scalable and flexible solution that we believe will become standard in all mobile wallets in the future, Joachim concludes.
Crunchfish is an IT company from Malmö, Sweden that has developed a patent-pending solution for digital offline payments which can be integrated directly with the payment rail or in a mobile wallet. The offline solution is globally scalable and makes digital payments more robust as the risks of disruptions and downtime are eliminated. Crunchfish operates internationally and has been listed on Nasdaq First North since 2016.