Links to submission: website/app: Lintium.com about the challenge: https://lintium.com/sbc-challenge/ How to use the app: https://lintium.com/how-to-use-the-app-2/ Overview of Wallet: Users request payment over stellar using IOUs/encrypted hash . the stellar accounts are connected via API with fiat to settle transactions. Features Implemented: Stellar Account -Stellar account plus federation addresses for email and bank account number -Auto load of funds into stellar account for activation Payment request/IOU -User can request payment from another user. The request is registered on the stellar blockchain Bank API connect: -User connects their bank account via API directly with the stellar account. -The Bank API retrieves bank transaction history into wallet, bank details. Allows for pushing payments Encryption Hash: -The IOU information and payments instructions is stored on multichain (private blockchain) -This information is encrypted and created into a hash string -Encrypted hash is recorded into memo field of stellar transactions. -Encrypted hash is also included in the bank or fiat transfers in the description field -The hash is tracked by the wallet in order to audit, verify, match and complete the transaction/IOU. -It helps create a full accountable flow. -Hash can be forwarded to pass on debt. -Encrypted hash also keeps payments details private. TrustLines: -Trustlines created between the two wallets for exchange of assets -when request is created an IOU asset is issued, -on payment receipt IOU asset is reset. Analytics: App analysis encrypted hash, stellar and bank transactions to update status of payments and reset IOUs *********** Original post ****** Problem Paying in any currency apart from XLM requires the need to use an anchor. Though this system works well this is not ideal in many situations such as: In many instances B2B transactions need to be settled directly between two businesses due to country regulation. Lack of anchors in certain markets means that either there is no way to settle using an anchor or the costs are two high due to competition Solution: We want to allow two wallets to settle in Fiat currency without the need for an anchor. The concept is to connect stellar accounts directly with the users fiat accounts. This allows for stellar network to act as a messaging, trust system or escrow between two wallets while the value exchange takes place P2P. Use cases: - Two merchants using the stellar network to agree terms and agree smart contract using stellar but want to settle in fiat. - Freelance developers getting paid in XLM or fiat. - Marketplaces which use stellar but need their merchants to settle in Fiat. - Purchases made using crypto markets or using stellar as a settlement mechanism. Under the Bonnet: We use stellar & Open Banking API protocols to first connect a stellar accounts to bank accounts and then allow two wallets to exchange xlm or fiat currencies without the need for an anchor. The payments process allows for full reconciliation of payments and confirmations between the wallet. For the build challenge we will allow users - To create a wallet that will include a stellar account - Connect the wallet holders bank account to the stellar account (limited to a few european countries) - Make payments requests over stellar. Attach an hash which contains payment request details. - The hash triggers Euro payments directly from the connected bank account. - The hash is also coded into the stellar and euro transactions allowing for a full loop confirmation and reconciliation process. Payment process: 1.A request payment from B: 1.1 A payment request which contain amount, bank account details, description is created. 1.2 This payment detailed is hashed. 1.3 A stellar transaction is made to B containing hash in memo field. 2.1 Hash triggers a pop-up “request for payment” 2.2 B can now confirm the payment. 2.3 Payment confirmation triggers bank transfer via open banking API 3.1 Bank sends payment from B to A containing the Hash. 4.1 On receiving payment. A’s wallet detects the hash and confirms receipt with B. 4.2 This completed full loop of confirmation and payments reconciliation ************** Help from Community' ************* Whether to use xlm transactions or Trustlines to trigger payments and create IOUs? 1) Using XLM transaction The easiest way to send an IOU to another wallet is to simple send an xlm transaction with an attached Hash with the details. This hash can easily retrieve the relevant details and trigger the payments. Theoretically the Hash can also be passed on to another user in order for the other user to execute payment. Using transaction history we can track the hash to see where the payment request currently resides. 2) Using trust line and assets A more complicated approach but something more inline with the SBC challenge is to create trustlines and “assets” which are exchanged between two account holders to represent IOUs before the transaction is settled in fiat. The only we can achieve this as per our knowledge of stellar is: When a user sign-up for the wallet we create two stellar accounts in order to issue an asset such as “EURIOU” User A then creates a trustline with User B. User A then sends an request for payment (example €50) to user B. When User B accepts the payment request, the wallet automatically creates a trustline with A allowing now for A to send their EURIOU to B to create a “real” representation of the debt owed. Once A triggers the payment to A, and A receives the payment, The Stellar network will provide the payment instructions, reconciliation, payment triggers between the wallets. The settlement in euros will be done directly between the two users. Trustline to other wallet SWA1 -----> SWA2 -------------------------------------------------------------SWB2 ←-- SWB2 Token Token holder Issue IOU tokens issuing account SWA - Stellar wallet for user A SWB - Stellar wallet for user A The tokens by itself apart from representing a value do not provide any security. This can only we solved by: Creating legally enforceable IOUs Locking in XLM (which requires maintain large balances Also one concern I have is in relation to passing on debt between users. if debts get passed on to third parties who do the actual settlement in Fiat, this could create Anti-money laundering issues for the final payer as he technically does not know the origin of the funds but is effectively acting as a "mule". Long Term Vision Similar to Patchfinder, when we start connecting different payment options to a stellar account , we effectively turn those wallets into mini-Anchors. The more payment type we connect and more users from different countries we get on board we can effectively create a peer to peer network for payment flows without the need for anchors. A simple blockchain based registry which stores the various payment options available for each user will allow for the creating of user payment graphs and the flow of payments anywhere in the world. Compliance: As the payments are triggered by the account holder no additional compliance process is required.

Lintium: P2P wallet allowing fiat settlement without the need for an anchor

SergeKiema

Hello, great job will your project be open source ?

NeilAmbikar

Parts of it will be opensource. we are using some of the components from our current application. but the code we write around reconciliation and accounting processes should be opensource in the long run. still developing ?

mikeyrf

Answering on 2)

When an account issues an asset, they can restrict who is authorized to hold the asset (so it can’t be passed on to 3rd parties).

See: https://www.stellar.org/developers/guides/concepts/assets.html#controlling-asset-holders

RickGroothuizen

From my understanding you are using Stellar in your use case as underlying mechanism to create trust (through a payment request) between two FIAT accounts when doing a payment and to make payments more audit-able . Why did you choose Stellar for this?

NeilAmbikar

Hi Rick.

When we looked at the bigger picture on how payments will work for individuals and businesses. We had a big check list of things that are requires and what we need to build. apart from cost and speed, things like compliance and regulation, support for invoices, creating of assets, attaching emails, phone numbers to accounts. Stellar already does a lot of the these. The low cost and speed also means that it can be used a a trust layer for what i believe will be a lot of transactions for B2B and B2C which will use blockchain for trust and verification of transactions but the actual settlement will take place in fiat or some other method.

RickGroothuizen

What I understand you are doing now is add an extra trust layer to a FIAT payment through Stellar. Even if a FIAT payment is verified by Stellar through a transaction acting as an extra trust layer (in case a bank is also considered as a layer of trust), a FIAT settlement between two FIAT accounts still goes through the normally settlement process. It looks to me that within your project the need of an anchor for bridging two currencies / assets still exists.

NeilAmbikar

RickGroothuizen Hi Rick. if you use fiat currency there is always either A ) a bank account involved where the money is held, or b) if you use physical cash its effectively an IOU by the central bank. in a a way you cant have fiat currency without one of these two involved. The way we have interpreted the challenge is to not use intermediaries or anchors on the stellar network but allow two users to exchange value at the base level. in the case of our use case the base level is bank accounts. obviously in the future we want to add more "base levels" like other crypto, mobile credits (e.g. mpesa). etc.

syntaxval

Just my 0.02¢. As far as I know (did some research already), what you're trying to do would make you a Money Transmitter in most of the jurisdictions. This means you would have to either get a Banking or Money Transmitter licenses. Perhaps in some countries even both. The moment you accept FIAT deposits from your users and enable transmission of those funds via your platform without government's permission, you're in big trouble. If anyone knows for a fact that I am wrong, please correct me here.

NeilAmbikar

syntaxval Hi syntaxval, We dont actually take deposits or ever touch the users money. what we are doing is connecting the users bank account directly to the stellar account. the fiat payments happens directly between the users. the way we are doing this is under the new PSD2 regulations for open banking APIs (https://www.wired.co.uk/article/open-banking-cma-psd2-explained) . We are also partnering with a firm which is licensed to access this data and use these facilities.

Regulation is a big headache , I know i have run 2 payments startups and worked with several regulators! we are taking this approach in order remove the need for heavy compliance which is required if you take deposits and act as money transmitter. P2P transfers directly at the user level is something that banks or regulators cannot stop and we believe that is the best way to get crypto and also lot of the benefits to a wider community.

to start with we are connecting only bank accounts, but i guess the next step will be to connect crypto exchanges, paypal, and other payment systems.

syntaxval

NeilAmbikar Interesting idea, indeed. I presume, the regulation described in the article applies to the banks in the UK/Ireland at the moment, plus the actual entity accessing the API's has to be FSA approved.

NeilAmbikar

syntaxval . currently we can access UK, Germany and Austria. but by Jan 2019 all EU countries will be online so that will be a total of 27 countries in total. globally also mexico and a few other countries are implementing similar legislation.

the access to API legislation is still a grey area, most companies are getting regulated anyway. and to be safe we are working with the API aggregates which are regulated.

NeilAmbikar

NeilAmbikar but are long term goal is to get regulated so that we can provide access for whole crypto community and provide the licensing cover for crypto projects.

NeilAmbikar

Made the submission for SBC 7. wish us luck. need some sleep and i will update the documents here tomorrow.

NeilAmbikar

check out our submission:
website/app: Lintium.com
about the challenge: https://lintium.com/sbc-challenge/
How to use the app: https://lintium.com/how-to-use-the-app-2/