EGREMONT – As cash continues to lose its royalty in an increasingly digital age, the nonprofit group behind the local currency known as BerkShares has announced plans to create a payment platform using a mobile application.
Soon, anyone with a bank account and a smartphone or tablet will be able to download the app and get BerkShares to spend locally.
“We’ve seen the need to take BerkShares digital over the past few years, and especially with COVID, when we’ve seen a huge drop in cash transactions, which has really encouraged us to take it more seriously,” said Rachel Moriarty, program administrator of BerkShares Inc.
The BerkShares app, which will work much like PayPal’s popular Venmo mobile cashless payment service, is in the testing phase. Moriarty said it will be available as a free download for iOS and Android users by December, in time for the holidays.
Like its cash counterpart, which was introduced 15 years ago, digital BerkShares will be backed by US dollars.
BerkShares was first started by the Egremont-based Schumacher Center for a New Economics in 2006 to foster regional autonomy and greater kinship between residents and local businesses. About 400 businesses in the region accept BerkShares and around 140,000 BerkShares are in circulation, Moriarty said.
These physical banknotes, which bear portraits of local luminaries like Herman Melville, Robyn Van En, Norman Rockwell and WEB Du Bois, can be obtained in exchange for federal currency at the Pittsfield Cooperative Bank and participating branches of Lee Bank and Salisbury. Bank.
But, with digital BerkShares, a bank visit will not be necessary.
Digital BerkShares users will download the BerkShares app to their smartphones or tablets, then digitally connect the app to their bank account. It can be Salisbury Bank, Lee Bank or all bank, whether affiliated with BerkShares or not.
When users obtain the digital BerkShares, the money, in US dollars, will be withdrawn from their personal bank account and deposited into one of two deposit accounts (Salisbury Bank or Lee Bank), in which case the digital BerkShares will be issued at name of users. application account and made available for use. During this time, US dollar reserves will be deposited in community banks.
Currently, the physical BerkShares program requires merchants to have an account at participating banks if they wish to cash out.
“This change allows businesses that have their accounts at other local banks to participate now,” Moriarty said. “And so that opens up a huge amount of opportunity for us, because businesses in North County, where, say, bank branches were not present before that, can participate.”
Payment can be made in two ways. Participating merchants can post a static QR code and ask the customer to scan the code and enter the amount owed, or the merchant can produce a unique QR code for the transaction and ask the customer to scan it to complete the transaction. Customers can show their device to the merchant to confirm payment has been made.
The digital platform will give local merchants the benefit of not having to pay transaction fees associated with credit cards, said Fennie Wang, founder of Humanity Cash, a technology company that builds digital BerkShares.
Unlike physical BerkShares, which are obtained in exchange for US dollars at a rate of 95 cents by BerkShare, digital BerkShares can be obtained and redeemed for federal currency at a one-to-one cost ratio using the app.
Merchants will not incur any fees on customer purchases in BerkShares, nor will they pay or incur any fees when they put their BerkShares back into circulation. But, if a company wants to cash out in US dollars, it will pay a 1.5% redemption fee. Moriarty notes that the fees are competitive with credit card processing fees, which are in the range of 3 to 5 percent, as well as Venmo, which charges a transaction fee of 1.9 percent plus 10 cents.
Included in the rollout, local donors funded 60,000 free digital BerkShares to distribute to the accounts of businesses and consumers who download the app.
The app won’t just be a payment instrument, Wang said. It will include a local news feed and up-to-date suggestions on events and offerings from participating BerkShares companies and organizations.
The digital platform will allow BerkShares Inc. to address two issues that it considers crucial to its goal of administering a sustainable local currency, Moriarty said.
On the one hand, the digital platform will make it much easier to obtain BerkShares.
Second, it will allow BerkShares Inc. to trace the flow of its digital currency and thus determine how well it circulates in the local economy – from a retail buyer to a merchant, from a merchant to a grocery store, to ‘a grocery store to a farmer, and soon.
In an age of globalization, the goal of BerkShare Inc. is to educate people about the importance of moving money through the local economy.
“It gives a human face to money, to the economy, to the community,” Moriarty said. “We want people to see themselves as empowered, conscious consumers – and not just spending money because that’s how the world works.”