Kunoo, how it works...

The system consists of two components, a consumer storage device (CSD) and a merchant terminal that interact with each other. The two devices communicate using radio frequency identification or RFID for short. Another term used for this is NFC or near field communication. All of the "touch to pay" systems out there use some variation of this technology. The current test we are conducting is using an RFID key fob for the CSD so that is how I will refer to it here.

 The key fob stores a digital value of change that ranges between a minimum of $0.00 and a maximum of $2.00. Upon each coin-less transaction the value of the key fob is read, processed and then replaced with a new value.

As you read this please remember this system only comes into play after you have paid for your purchase with whole dollars in an amount greater than your purchase total. The amount you give the cashier is entered normally as the "amount tendered" and then the cash register displays the "change due". Returning this change due back to you without the need for physical coins is sole purpose of Kunoo.

There is a fee of 1 cent each time a consumer uses the system. After 100 uses they would have paid $1.00 in fees and not had to hassle with approximately 400 coins.

For the following explanation of how the system works and the examples, we are going to use a change due amount of $3.40. So you are at the store, you have made a purchase that totaled $1.60 and you handed the cashier a $5.00 bill. The register now shows a change due amount of $3.40.

At this point you touch your Kunoo key fob to the Kunoo terminal and in a fraction of a second, the display shows your new change due (the physical portion) which will be $3.00 or $4.00. The cashier gives you this amount and you are done with your first coin-less transaction.

If your new change was $3.00, the difference of $.60 was added to the beginning value of your key fob less the 1 cent fee. So if your key fob had $1.00 on it when you arrived it would have $1.59 on it when you left. Reducing your change down to $3.00 is only possible if there is enough room on your key fob to accept the difference without exceeding the $2.00 limit.

If your new change was $4.00, the extra change of $.40 beyond what you were owed, is deducted from the beginning value your key fob plus an extra cent for the fee. So if your key fob had $1.00 on it when you arrived it would have $.59 on it when you left. Increasing your change up to $4.00 is only possible if there is enough value on your key fob to deduct the difference without the key fob going negative (below $0.00).

You may have noticed in the examples above that in both cases the change adjustment could have gone either way. This occurs about 1/3 of the time and is what gives the system the ability to keep the merchants cash drawer in balance. The need for this balancing feature is the reason the maximum key fob value is $2.00. Each time the physical change due is adjusted down, there is a matching increase in the cash drawer balance and the reverse is true when the physical change is adjusted up.

The truly amazing thing about this invention is the system's ability to self balance. Regardless how many millions of terminals and key fobs are out there, at the end of the day every penny is accounted for!

Thanks and I look forward to any questions or comments.