Protocol Mechanics

HaloPay leverages specific Stellar Ecosystem Proposals to orchestrate offline payments and fiat off-ramping. The system routinely processes micro-transactions under $50. Every step of the flow relies on standardized blockchain interactions to ensure compatibility across wallets and liquidity providers.

SEP-0007 URI Formatting

The point-of-sale application constructs precise payment payloads entirely offline. It uses the SEP-0007 specification to format a web+stellar:pay URI. This string encodes the merchant’s Stellar public key, the required asset designation like USDC, and the exact crypto amount calculated from the cached fiat exchange rate. The application encodes this URI into a high-contrast QR code. The buyer scans the code. Their wallet decodes the URI and constructs the transaction envelope. The buyer’s device handles the actual network broadcast. The merchant terminal remains passive and offline during this phase.

SEP-10 Cryptographic Authentication

Security demands verifiable identity before moving funds. The backend API initiates a SEP-10 challenge-response flow when a merchant attempts to interact with the settlement engine. The server generates a unique challenge transaction. The merchant signs this transaction using their private key. The server validates the signature and issues a JSON Web Token. The JWT authorizes subsequent API requests. The system prevents unauthorized actors from triggering fiat withdrawals or altering account parameters.

SEP-12 Know Your Customer Ingestion

Regulatory compliance dictates strict identity verification for fiat off-ramping. HaloPay integrates SEP-12 to facilitate the secure transfer of merchant KYC data to regional anchors. The API exposes endpoints accepting multipart/form-data. Merchants upload high-resolution photos of government-issued IDs alongside standardized personal details. The backend routes these binary blobs directly to the anchor’s secure storage. The approval process averages two minutes. The merchant gains full settlement capabilities upon verification.

SEP-24 Automated Fiat Settlement

Liquidity anchors bridge the gap between digital ledgers and traditional bank accounts. The halopay-api orchestrates SEP-24 interactive withdrawals to convert accumulated USDC into local fiat currency. The backend monitors merchant balances. It programmatically requests withdrawal quotes from partners like MoneyGram at the end of the business cycle. The system executes the transfer instructions provided by the anchor. The anchor deposits the equivalent fiat into the merchant’s registered bank account or mobile money wallet. Transaction friction remains low. Network and anchor fees combined typically account for 1.5% of the total settlement volume.