Ecu is tomorrow’s payment network

Let’s make it happen

Ecu is the transfer of the task from a technical to a managerial category. We don’t think a team of technical geniuses is enough to solve blockchain’s problems. We need a collective mind

Today’s payment systems (payment cards, cash, wire transfers) are old and outdated, which means we’re all bearing unnecessary costs.

In the long run, the one who accumulates the strength of the community will win. Therefore, we have created all conditions using a model of deliberative democracy

The ECU Payment Network

ECU Foundation is creating a modern payment network that will aggregate the best ideas, innovations, and technologies developed in recent years. The ECU payment network will allow safe, fast, and low-cost transactions, using a global currency.

Many of the ideas that Initiative ECU will include already exist in some form, but thus far they have gained only limited acceptance, and there is no universal system that integrates them all. This is due to a classic chicken and egg barrier: No buyer wants to join a new network with no sellers, and no seller will offer a payment option that no buyer uses. ECU Foundation will overcome this barrier by distributing its currency— ECU, creating incentive for its adoption and use.

This paper gives a taste of the innovations and improvements that the ECU payment network will offer.

Ease of use

The cards and cash in our wallets are antiquated ways to identify us and keep a count of our funds. These functions can be easily integrated into a smartphone. You can just walk into a store without your wallet, and your payment account is quickly identified using digital methods such as a QR code or an audible code. An RFID sticker on the phone can be used as backup when the battery is dead.

Checking out can be even further simplified. With the ECU app, you can enter a store, scan the barcode of the items you want with the phone camera, and simply walk out. At restaurants you can just leave when you’re done, as your phone settles the bill directly with the restaurant’s server. No flagging down the waiter, no delays.

There’s also no need to fill out forms each time you visit a new online store. Once you authorize your device, you are automatically identified, and you can confirm payment with 1-click.

Companies like Apple, Google and Amazon have developed such features, but they are still used in a small fraction of transactions. ECU payment system make them standard.

Fraud prevention

Sellers spend 8% of their revenue on fraud-related costs. Every instance of fraud takes money from the system, and forces sellers to take costly precautions—costs eventually borne by the buyers through higher prices. However, there is a wealth of information and technology that can dramatically reduce fraud once integrated into the payment network.

We already have access to some amazing technology. Our smartphones include fingerprint sensors, GPS, a camera and microphone that can recognize our face and voice, as well as the most advanced encryption capabilities. These can be used to implement highly secure multi-factor authentication methods, which would make it far more difficult to steal our identity.

Compared to the very crude Address Verification Service (AVS) used by payment cards, which only compares the digits of the billing address, the ECU payment network will be able to verify more information at higher accuracy, and incorporate more modern information sources, such as social media accounts.

ECU can also employ the latest algorithms to analyze individuals’ digital behavior — technology currently offered by companies such as Forter and Riskified, but only used in only a small fraction of transactions.

The use of a centralized payment page for all ECU users will help establish patterns of appropriate and inappropriate behavior, leading to a far more reliable fraud assessment than any individual seller could accumulate alone.

The above technologies are already available, and only need to be integrated by Initiative ECU, but there is one capability that is unique to the ECU payment network. Since every new member must be verified by an existing member, who risks losing their reward in case of fraud, the ECU payment network will build a network of trust relationships that can be used to verify transactions. For example, the system can require that for large or suspicious purchases, a trusted friend must contact you directly and verify that you authorize the transaction.

Promoting proper business practices

Too much of the contemporary retail economy is based on misleading practices: cases where the seller knows that the value to the buyer is lower than it seems, or that final costs are higher than presented. These practices include free trials that turn into paid commitments without warning, unexpected price changes, and promoting products with false promises or deceitful marketing.

This ultimately hurts everyone involved. It leads to skepticism by potential customers, who must constantly be vigilant, and hurts legitimate businesses, who must compete against deals that are too good to be true, and are eventually forced out of the market—further harming consumers.

ECU will go further than standard customer protection laws, creating a network where buyers don’t need to constantly worry about whether they are being scammed, and sellers can focus on quality rather than assuaging such concerns.

How do we do that? By making dishonest practices a legitimate reason for transaction reversal, thus motivating sellers to share all information that may reasonably affect purchase decisions, even if the law doesn’t require it. ECU will also require customer confirmation for any changes in payment arrangements, such as raising fees.

Additionally, buyers will see customer reviews on each seller’s payment page, to ensure better service and to incentivize respect from both sellers and buyers. ECU has the unique ability to ensure that reviews are only provided by verified buyers who made an actual purchase from that seller, evading the problem of fake reviews praising one business or discrediting the competition.

Through these measures, the ECU payment network will become an environment where buyers no longer need to worry about scams, and sellers can focus on creating value to buyers.

Reversibility and dispute arbitration

No matter how good a system is, if humans are involved, there will be mistakes and misunderstandings. That’s why reversibility (one of the limitations of Bitcoin) is so important. Allowing transactions to be reversed benefits both buyers and sellers in the long-term, as customers are more willing to engage in the market when they have a measure of protection. Moreover, this is already a feature of payment cards, and any system that seeks to overtake them will have to provide similar assurances.

The ECU payment network can also include an automated dispute resolution process, with an easy to use interface that allows users to submit claims and upload evidence to support those claims.

Disputes that cannot be resolved automatically can be assigned to a trained representative, who investigates the claims to determine whether there has been a violation of the ECU payment network regulations. If the agent finds that the seller was at fault, then the transaction can be reversed, while in cases where both sides acted appropriately (e.g. an unauthorized charge) the buyer can be reimbursed by Initiative ECU. Such reimbursement can be paid from a global insurance pool financed from transaction fees.

Reporting

Buyers can have instant access to their full transaction history, including precise times and locations for when and where transactions were authorized, what verification method was used, a copy of the invoice, details and images of the products, delivery tracking data, an instant messaging option to communicate with the seller, and a link to the ECU dispute resolution forum. This would be a major improvement over the vague references and line-items on today’s payment card statements.

Credit allocation

Combining the most advanced technology and analytical methods with information provided by users, can lead to a far more accurate and equitable assignment of credit. More data and more nuanced application of that data lead to better informed decisions. For example, new users can be evaluated on the basis of the reputations of those who have verified them or are connected to them. This would provide significant improvements over the current credit scoring system, which relies only on payment history, retains inaccuracies for long periods of time, and promotes debt.

Universal access to payments and micro-finance for the underserved

Worldwide, 38% of the adult population doesn’t have a bank account. In some areas it’s far higher; in Colombia and Peru it’s over 60% and in the Middle East it’s over 80%. Likewise, access to basic financial tools and micro-financing is very limited in many poorer parts of the world. ECU will allow people all over the world to make deposits, purchases, sales, money transfers, and investments without ever needing access to a bank. This includes efficient micro-lending operations that can help change the lives of people. ECU reduces prices for all with lower fees and no hidden costs, including costs of remittance and other money transfers. Unlike other cryptocurrency, operating ECU does not require energy waste along with its environmental damage.

Transaction costs

Cash remains the most common retail payment instrument, used in 32% of all transactions in the US and 79% in the EU. In a survey of payment methods in Asia, 57% said they use cash most often. But this reliance on paper has a cost: printing, storing, transporting, and sorting paper takes time and money. It is estimated that the use of cash costs around $100 billion per year in the US alone. Checks are not much better, costing US companies tens of billions of dollars a year to process. Clearly, moving to a digital system can save enormous costs. While credit and debit cards circumvent these problems, they introduce other high costs, resulting from their use of outdated technology.

Because the ECU payment network will use a unified system and currency, and operate digitally using the most advanced technology, transaction fees can be much lower. Furthermore, by reducing fraud and scam attempts, ECU can also greatly reduce the hidden fees that manifest in higher product prices.

The ECU payment network offers a unified system for payments, sales, and transfers that works everywhere instantly. The same currency (ECU) is used in all territories, avoiding the need to exchange currencies at hefty fees.

AML – Anti-Money Laundering

One of the main causes for complexity in payments is the need to comply with regulation for prevention of money laundering. This is why international wires can take days and cost $20-100 each.

The ECU currency resides solely on the ECU network, and therefore each ECU can be tracked to its source, eliminating the need for AML procedures, and paving the way for instantaneous cross-border money transfers.

Efficient market

Today, a large portion of purchases occur as a result of the seller’s marketing efforts, even though nearly all of those efforts are unsuccessful. This means consumers are constantly bombarded with useless messages, draining their time and attention, and increasing product prices.

Through advanced analysis of buyer profiles and transaction history, ECU can transform market dynamics: instead of sellers aggressively convincing consumers they need their products, the focus will shift to identifying real customer needs, and finding the products that best fulfill those needs.

The ECU currency resides solely on the ECU network, and therefore each ECU can be tracked to its source, eliminating the need for AML procedures, and paving the way for instantaneous cross-border money transfers.

Content Monetization

The complexities and costs of current payment systems make small immediate payments for content impossible, requiring content creators to rely on advertising revenue. A universal, low-cost, digital payment system can finally enable users to consume content ad-free, by charging a negligible amount, similar to what an ad would generate (typically a fraction of a cent per page or video).

Architecture

ECU aims to become the world’s primary payment network. That requires establishing locations all over the world, complying with local regulations, and providing quality customer service.

To reach this goal quickly, ECU will focus only on technology, standards and regulation, while delegating the financial operation to hundreds of local agents. These local agents will be responsible for customer service, safeguarding members’ funds, connecting local stores, legal compliance, and settling with other agents.

Creating the global currency in 7 steps

• Today’s payment systems (payment cards, cash, wire transfers) are old and outdated, which means we’re all bearing unnecessary costs.

For example, open your wallet and count how many different cards you have, and how much cash you have to carry around. The technology already exists to replace your wallet with a fast and secure digital payment method.

Additionally, the current payment networks were designed decades ago and their usage causes inefficient processing, fraud and rigidity — all of which translate to high costs.

• There are many advanced payment technologies and innovations waiting to be deployed.

Here are just a few examples: MFA methods to make payments more secure; AI to reduce fraud; one global currency to eliminate currency exchange fees; digital transactions to make transactions faster, safer, and cheaper. See more details about the improvements and innovations that a modernized payment system could offer.

• So why don’t we already have newer, better systems? Because there’s a”chicken and egg” barrier — no buyer will join a new payment network with no sellers, and no seller will offer a new payment option that no buyer uses.

A payment system is only useful if it’s used by a significant number of both buyers and sellers. Getting to that critical mass of users is the challenge, as people will initially be reluctant to adopt the new payment system.

This barrier has historically been the reason that previous attempts to deploy new payment systems have had limited or no success, despite offering superior functionality.

• If someone built a modern payment system that implemented these technologies and somehow got buyers and sellers to adopt it, this system would quickly become popular. It could eventually end up seeing 20 trillion dollars in transactions per year.

Payment cards already account for approximately $20 trillion in transactions. Once buyers and sellers have a better option than payment cards, they would naturally prefer it whenever possible, and it would eventually reach or exceed that level.

• Now imagine this system created a dedicated global currency. Let’s call it ECU. According to economic models, the value of all ECUs would be several trillion dollars.

According to the equation of exchange in Economics, a currency’s value can be calculated using the amount of money in circulation and the frequency with which it is used (known as “velocity of money“).

Thus, estimating $20 trillion in transactions, and using the global average velocity of money, would give all ECUs in circulation a value of several trillion dollars. Read a detailed economic analysis, co-authored with Prof. Lawrence H. White, an expert in Monetary Theory.

• ECU Foundation reserving this ECU currency for people who join today — the earlier you join the more ECUs you can reserve through DeFi smart contract!


The incentives to join start off very high and as ECU Foundation is widely adopted and the likelihood of success increases, those incentives drop correspondingly. The current estimated future value is shown above.

Eventually, it is expected that there will be enough ECU holders — potential buyers and sellers — to make joining ECU DeFi rewarding enough without requiring extrinsic incentives. People will join simply because it’s a faster, cheaper and safer way to transact. See a detailed explanation here.


• It’s like a self-fulfilling prophecy. As millions join, advanced payment technologies are deployed, the payment system becomes even more popular, the ECU currency becomes valuable, and rewards given to early users reach their potential value.