MTO: A DeFi Payment Protocol designed to enable POS terminals on blockchains & bring consumer protection to crypto payments

Merchant Token by the HIPs Payment Group Introduces Consumer Protection Concepts to Crypto Payments

By Nixel | icomagus | 12 Apr 2021

As the Federal Reserve continues to print fiat by the truck-load with little to no concern about devaluing the purchasing power of the US dollars held by everyday Americans, it's no wonder more and more people are diving into cryptocurrencies, decentralized finance, and altcoin launchpads. As one of these intrepid individuals, it is my pleasure to provide crypto enthusiasts with a quick rundown of an ICO that recently made its way onto my radar.

Ladies and gentlemen of the Cryptoverse, as the specter of inflation haunts the grocery stores, gas stations, and retailers of America, I present for your consideration: the Merchant Token (MTO)


*****Mandatory disclaimer before we get started
: I do hold MTO, but I am not an employee of nor do I represent the MTO Launchpad or the Hips Payment Group. The opinions expressed here are my own—I am not being paid to write this content. Additionally, I am not a financial advisor, and nothing in this article should be thought of as financial advice—this article is for educational purposes only. 


Merchant Token Strives to Bring Consumer Protection to Crypto Payments

The HIPS Merchant Protocol (HMP), along with the Hips Merchant Protocol Gateway (HMP-gateway) and its governance token, Merchant Token (MTO), have been designed as a payment ecosystem with consumer protection features from the traditional card payment industry, such as chargebacks on disputed purchases, built into the HIPS Merchant Blockchain via smart contracts for consumers who use cryptocurrency as a payment method.

Merchant Token Crypto Payment Ecosystem

HMP seeks to provide consumer protection if merchants fail to deliver the goods or services paid for by the cardholder. This is accomplished by escrowing payment tokens in the Automatic Dispute Management (ADM) system, a key feature of HMP-Gateway, and by assigning trusted merchants with a reputation level calculated by decentralized oracles and based on the following variables: successful “non-disputed” escrows over variable time, age of the address, and the total processed amount on the address (MTO whitepaper, pg. 12).

When a payer account approves a token transfer to a merchant account, the transaction passes through the HMP-Gateway, which routes it to a smart contract based on the delivery time of the order. The tokens are then transferred to an escrow contract held by HMP-Gateway, where they can be withdrawn by merchants with a high reputation level after the escrow time has passed without any dispute signals from the payer account. 

Payment Escrowing with Automatic Dispute Management (ADM):

CDM Token Flow


Tokens transferred by the HMP-Gateway to merchants with a very high reputation level will bypass the escrow contract altogether, however, should the payer account issue a dispute signal, and if the merchant's reputation level is low, the escrow contract will issue a "chargeback" event and reroute the funds back to the sender. 

HMP also has a Community Dispute Management (CDM) system in place that allows token holders to increase their token holdings by getting paid in MTO to actively participate in resolving dispute cases.

When a dispute signal on a transaction is issued, the tokens will be transferred to a dispute contract, where they will remain until a random dispute agent (MTO token holder) decides to begin investigating the dispute case using data provided by the payer account on the dispute platform. The MTO whitepaper states that dispute platforms will be required by the protocol association to be GDPR-safe, and dispute agents will only have access to data for the case being investigated (MTO Whitepaper, pg. 18). 

Completed dispute cases will be transferred to another dispute agent for a second opinion before a consensus test is performed. If consensus is achieved, dispute agents' "reputation" level will be increased, and the dispute fee (paid by the account holder/payer) will be released. However, if consensus is not achieved, the agents' score will be negatively affected, the case will go back to the dispute contract, and the agents will not be paid. 

Payment Escrowing with Community Dispute Management (CDM):

CDM Token Flow
This ecosystem incentivizes dispute agents to thoroughly investigate a case, and also leverages a small fee for taking on a dispute case to prevent agents from abusing the protocol. After a consensus is achieved on the CDM, tokens will be transferred out of the escrow contract and back to the merchant or to the payer as a "chargeback."



MTO: A Stable and Scalable Solution for Slow Blockchain Transactions

Among the most exciting things about the Merchant Token project is how it aims to solve one of the primary issues that currently prevents mass adaptation of crypto as a practical payment option for merchants, whether online or at the store-front: slow blockchain transaction speeds compared to the likes of traditional card payments.  

Merchant Token (MTO) is an ERC20 token native to the HIPS Merchant Blockchain, which has been engineered to accommodate real-time merchant transactions. HMP enables crypto payments for Payment Service Providers (PSP) and on EFTPOS devices. Additionally, HMP has been built to facilitate backward compatibility with financial protocols like the ISO 8583 international transaction message exchange standard.

All this effectively means that through HMP and MTO a tangible route for crypto payments to begin penetrating the markets and gaining acceptance among mainstream consumers is one step closer to becoming a reality. 

HMP and its related assets are designed to run on any blockchain with support for smart contracts, like Ethereum or Cardano (ADA), but its most promising pairing is with Solana, a lighting quick public blockchain capable of 50,000 transactions per second.

Solana Blockchain

Solana also has block times of 400 milliseconds and transaction costs as low as $0.00001, which, according to the MTO whitepaper, could theoretically "scale with Moore's Law via parallelism, with a foreseeable roadmap to 1 million transactions per second and 150ms block times" (pg. 21).

With these transaction speeds and low transaction costs, HMP and the Solana blockchain have the potential to support the "activity on Visa, Mastercard, and all the US-based exchanges combined" within the emerging Web 3.0 paradigm (MTO White Paper, pg. 21).  

HMP will eventually integrate with Ethereum 2.0, but the pairing of Ethereum 1.0 and Solana as starting blockchains provide a solid and scalable foundation for the protocol to successfully accomplish its proposed functions within the payment industry.

When you consider how the HIPs Merchant Blockchain ecosystem provides practical solutions for real-world problems faced by both merchants and consumers, it's fair to speculate that the project's trajectory could position Merchant Token as an absolute juggernaut within the rapidly growing DeFi and fintech sectors. 


Hips Payment Group Ltd., the team behind Merchant Token


The Hips Payment Group Ltd., the team behind MTO, was incorporated in 2018 and is based in Dublin, Ireland—it operates within the financial services/fintech sectors, and bills itself as "a provider of innovative and cost-effective e-commerce and mobile payment solutions." Hips offers merchants an omnichannel payment gateway through its digital payment platform, services, and products—which are seemingly ubiquitous.

HIPs Payment Terminal
If you've ever swiped your card on one of those little grey boxes with red, yellow, and green buttons, chances are it was a payment terminal put out by Hips. As the HIPS Merchant Protocol gains traction, Hips has stated that the Hips Merchant Blockchain will be integrated into existing terminals and card scheme infrastructures already in place for traditional transactions. 

Hips' presence can be found on 6 continents and the payment group provides its services to thousands of merchants, among which include household names like Lyft, UPS, and USBank. Hips' systems offer merchants a variety of payment methods through major players including Google Pay, Apple Pay, PayPal, Visa, Mastercard, and American Express.

John Cavebring is the CEO of both the Hips Payment Group and the HIPS Merchant Protocol. Cavebring brings over 20 years of experience in the card payment industry to the table and serves as the driving force behind the project. In a recent interview with Fintech Finance, Cavebring stated:

We are focusing a lot on new payment technology [...] we're also innovating a lot into blockchains, and looking into payments on the blockchain. We're seeing how we can [add] consumer protection as part of the blockchain, which is really not available with crypto payments today. So, that is something we're looking into with the Merchant Token and that is also a big project that we have. We are working on different fields here, and a lot is happening in the payment industry right now, so there's a lot to do. 


In a press release unironically dated April 1st, 2021, Cavenbring expressed enthusiasm on behalf of the HIPS team for MTO's potential market presence: "We believe that the consumer-oriented features of the MTO are the missing piece for crypto payments to have a market penetration and mass-adoption among mainstream consumers." This amounts to excellent timing as Mastercard recently announced that it plans to enable crypto payments for customers:

Our crypto partners convert the digital assets on their end to traditional currencies, then transmit them through to the Mastercard network. Our change to supporting digital assets directly will allow many more merchants to accept crypto — an ability that’s currently limited by proprietary methods unique to each digital asset. This change will also cut out inefficiencies, letting both consumers and merchants avoid having to convert back and forth between crypto and traditional to make purchases.

Corporate behemoths like Tesla, PayPal, and Amazon, have already begun embracing crypto with open arms, and many more are to follow, such as Caruso Properties, a real estate firm headed by California Billionaire, Rick Caruso. Caruso recently announced that his firm will begin accepting payments in Bitcoin from both residential and retail tenants, the first of whom might include Elon Musk.

As more companies begin making the shift to crypto the demand for a secure crypto payment infrastructure will increase, and it appears that Cavenbring has positioned the HIPs Merchant Protocol and Merchant Token as a truly feasible, rapidly adaptable solution for the problems currently plaguing mass adoption of crypto payments. 


Concluding Thoughts on Merchant Token ICO and Hips Payment Group

Overall the group behind the Merchant Token launchpad is a well-established, global player in the financial services industry. The Hips Payment Group is already partnered with over 200,000 merchants and as the widespread adaptation of digital payment systems continues to infiltrate every aspect of our consumerist society, I think it's fair to say that the possibilities for the Hips Merchant Protocol and the MTO governance token within the payment services industry and fintech sectors are seemingly endless, and the use case is rock-solid.

As always, you should do your own research and understand that any investment in crypto carries substantial risk, and investing in an ICO is not a guarantee of profits. Please bear with me as I reiterate that I am not a financial advisor and this content should not be considered financial advice. My goal is to share exciting news about a new ICO that could bring crypto payments into the mainstream, and this content is intended to help educate the readers to that end.

However, if you think I've provided you with valuable content and are considering joining the Merchant Token ICO launchpad, I would appreciate it if you use my MTO Launchpad Referral Link when signing up. MTO is currently rated Gold on and you can find its whitepaper, which has informed the content on this article at length, here.

The MTO Launchpad is scheduled to end on June 30th, 2021, but at the time of publishing this article, the MTO Launchpad is already on Phase 45. These phases are moving very fast, and each phase brings with it a 0.01 cent increase in the price of the MTO, which currently stands at .65 USD per coin. Anyone who's dabbled in altcoins can attest that getting in early on the right altcoin project can help set you up for success—regardless of whether the project is a dud, or ends up mooning. I believe the future is bright for MTO, and hope that you've found value in the content I've provided.  


Please do keep an eye out for my next installment where I'll go into further detail about MTO Tokenomics, explain how to purchase MTO using your Coinbase (yes, this is my referral link) wallet, and how to avoid a major newbie mistake when doing so! 

As my people say: ¡A tú salud, amor, y prosperidad!

Satoshi be with you,
—Nixel Mago



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