The first challenge can only be solved by side-stepping all existing payment infrastructures and unleashing a peer-to-peer digital cash payment system enabling instant mobile transactions. This new system needs to be robust, scalable, cheap, fast, open and extremely reliable. The needed digital cash technology fortunately already exists: a payment infrastructure based on decentralized blockchain technology.
This technology is best known for the bitcoin application, where the used proof-of-work implementation is however not very useful for instant micro payments. But by using alternative consensus and issuing mechanisms, the underlying blockchain technology can be adapted to process fiat currency transactions very efficiently on an open, but permissioned, infrastructure of blockchain nodes. Transaction fees can be one cent or less.
With such infrastructure anybody using a smart device can install a wallet app and start accepting and sending digital cash payments instantly, independent from bank or credit-card companies. On top of that, if the app is referenced with your bank account, the cash balance in the mobile wallet can also be funded or defunded directly with the bank. Like withdrawing cash from an ATM or depositing cash onto your bank account, but then anywhere – anytime. As the infrastructure can be used without a traditional bank accounts, it also enables the unbanked to participate in the circular economy .