Blockchain | Caso de aplicación: Apolo Money | Coffee Law SC

Payment Intermediation System Using Blockchain

Overview of the Payment System

• The system is an automated payment intermediation contract utilizing blockchain technology, eliminating the need for human intermediaries.

• It targets users purchasing from marketplaces, providing a smart contract framework that requires two out of three digital signatures to authorize payments.

Smart Contract Functionality

• The smart contract operates on a distributed network, ensuring that its code cannot be tampered with, thus guaranteeing consistent functionality.

• Unlike traditional platforms like PayPal, both buyers and sellers maintain control over transactions without being subject to external policies.

Cost Efficiency and User Incentives

• Apolo Money charges a minimal fee of 1% compared to higher fees from competitors like PayPal (up to 4.8%) and MercadoLibre (around 3.5%). This cost efficiency stems from direct user engagement in reaching agreements through technology.

• Users are incentivized to resolve disputes directly among themselves before involving a third-party authority within the platform's structure.

Dispute Resolution Process

• In cases where users cannot reach an agreement, they must submit evidence through a form for review by Apolo Money’s authorized personnel who will make decisions regarding refunds or payments.

• The partnership with Intercam Bank marks a significant step as it is one of the first banks in Mexico adopting this type of smart contract technology for mass-market products.

Integration with Traditional Banking Systems

• The smart contracts do not rely on cryptocurrencies but are integrated into the formal financial system via bank accounts created specifically for each contract within the banking infrastructure.

• Each smart contract has its own unique bank account managed under a mandate agreement, facilitating seamless transactions between buyers and sellers while adhering to legal frameworks without involving cryptocurrencies directly.

User Experience Design

• The application features simple functionalities such as sending or requesting money and provides users with progress tracking throughout their transaction processes, enhancing usability especially for those at the base of the economic pyramid.

• Users can view stages of their payments clearly within the app interface, promoting transparency and ease of use during transactions.

Understanding Blockchain Transactions

Key Concepts of Blockchain and Payment Processing

• The payment ID is a unique sequence of numbers that identifies transactions within the blockchain, serving as a mathematical reference for tracking.

• The hash function plays a crucial role in identifying transactions on the blockchain, ensuring secure and accurate processing of payments.

• Initially, transactions exist as drafts allowing modifications before finalization; this flexibility is essential in private blockchains where confidentiality is maintained.

• A distinction is made between public-private blockchains: while many participants can access the network, transaction details remain confidential to involved parties only.

• The ability to manage private information without public exposure allows for legal identity verification, enhancing compliance with anti-money laundering regulations through linked identities and transactions.

Transaction Execution and Confirmation Process

• By linking verified identities to multiple transactions, it simplifies the process of generating reports related to money laundering activities.

• Metadata associated with contracts provides necessary context for smart contracts to execute rules effectively once operations are initiated on the blockchain.

• Upon creating an operation, a unique bank account is generated specifically for that agreement, facilitating direct monetary transfers between parties involved.

• Automatic calculations include transaction fees (e.g., 1% commission), which are integrated into the transfer process seamlessly during execution.

• Once payment validation occurs, both parties must confirm participation in the agreement before proceeding with fund release; this ensures mutual consent throughout the transaction lifecycle.

Finalizing Transactions and Record Keeping

• After confirmation from both sides, cancellation becomes complex; any reversal must be recorded on the blockchain itself through smart contract triggers.

• The propagation of confirmations across the blockchain may take time but ensures all nodes reflect accurate transaction statuses consistently.

• Users can track their actions via digital signatures embedded within each transaction record; these signatures provide authenticity and accountability for all parties involved.

• Unlike traditional explorers like Etherscan, this system aims to simplify user experience by minimizing cryptographic complexities while still maintaining robust security measures.

• Timestamping features document when contracts were created or modified, adding another layer of transparency and traceability within blockchain operations.

Transaction Verification Process

Overview of Transaction Documentation

• The transaction includes a creator's signature and timestamp, confirming acceptance by the receiving party.

• The document serves as a proof that aligns with current fiat money institutions, offering enhanced security through unique identification keys.

Biometric Verification Steps

• To initiate payment release, a biometric verification process is required, which matches the user's identity document (INE).

• A selfie is requested to ensure it matches the INE document for identity confirmation before signing.

Finalizing the Signature Event

• An SMS message is sent for double verification to confirm user identity with their device during the signing event.

• Once verified, the signature event is recorded as definitive, and all documentation—including signatures—is compiled into a final certificate.