As I posted in the original announcement in "offtopic" here
https://bitcointalksearch.org/topic/btc-payments-coming-soon-to-a-store-near-you-88073I've been asked by a client (Who makes POS software) to find a way to enable BTC transactions at the POS.
At present I'm working on getting the documents for the proposal into a publish ready state, which is itself a fairly big job.
The system will require some momentum to become adopted and I would like to ask the assistance of the community in spreading the word as it comes to life. That's why I'm going to give the readers digest version of it here.
The crux of the concept I'm tentatively calling OpenPay (because it sounded like a good name), is to form a bridge from the online world of the bitcoin ecosystem, to the offline world of daily transactions.
When complete, you'll be able to spend your bitcoins directly (no intermediary organization is necessary) at any merchant, POS, ATM, gas station etc that takes Visa or Mastercard.
It's a card based system that will utilize an EMV compatible payment card (you probably already have one of these, it's sitting in your wallet or purse right now).
For OpenPay purposes the card will contain an encrypted private key (crafted in such a way that it matches track 2 requirements)
A 4 to 10 digit PIN would be set by you and would be the decryption key. A standard wallet id would also be stored on the card for loading & refunding purposes. For daily spends you would be able to handle the loading of the card through standard bitcoin means, or buy coins from your friendly neighborhood merchant.
Due to economies of scale, It's unlikely that people would want to purchase their own cards and all the bits and pieces to get it into a "ready to spend" state. But cost issues aside, there is no real reason why you couldn't. The cards themselves (any EMV compatible card) are between $15-$20 on the open market and the readers are about $100, but after that you really are your own bank.
It makes sense that card issuers would crop up around this, my planning anticipates that the primary issuers would be existing exchanges and banks that deal in BTC.
I will explain in more depth in another posting about the intermediate steps that occur, but in a nutshell the private key & wallet file are read by the acquiring software (same process as an import), which will then determine the balance, string together a standard bitcoin transaction, sign it and send it off to the network for completion. (either the merchant will be running their own node, or their payment processor will be running one).
The plan also makes provisions for the merchant who desires to allow their customers to spend BTC, but who themselves needs to receive payment in local currency. This will be a software setting of the reference implementation of the acquiring server, but would require the merchant to have an account with a company that provides exchange services, so they could run a daily settlement. Again I'll go into greater depth on this in a few days.
That's the jist of it. I'll be providing more details in later postings on the subject and will be posting all future developments in this thread, so please feel free to bookmark it.