The following scenario depicts the use of iCoins to pay a merchant who has its accounts for customers.

1. Certified Wallet is a Wallet that can Create or Redeem iCoins. It has a contractual agreement with a Treasury to exchange cash for iCoins and vice versa, and procedures for settlement through the normal banking network. Any other wallets have to act through the Certified Wallets to Create and Redeem iCoins.
2. Once an iCoin exists it can change hands with no intervention from the Certified Wallet. The Face Value of the iCoin is secured and guaranteed by the Treasury.
3. Treasuries have contractual relationships between one another to exchange iCoins and settle the value.
4. A Wallet Server takes care of the technical integration with the Treasury and authentication of the consumer. It has a contractual relationship with a Treasury for trust delegation and transaction verification.

Customer wishes to purchase at Merchant

A customer wishes to purchase at a merchant but is not able to use any of the merchant’s other supported payment mechanisms. He selects “Pay with iCoins” and is given an iCoins Wallet Address by the merchant.

Customer gets iCoins from Wallet Server Provider

Customer purchases iCoins from Wallet Server. This can be done with cash, credit card or any other payment mechanism. Wallet Server creates the iCoins by interfacing with its parent Treasury, and the iCoins are stored in the customer’s wallet.

Customer Pays Merchant

Customer sends funds directly to their Wallet at the Merchant by making the transfer within the Wallet Server system to the iCoins Wallet Address earlier provided by Merchant. In this example the merchant is a customer of a separate Treasury, although this will often not be the case.

Merchant Settles iCoins

At any point Merchant can settle its iCoins by redeeming them at its Home Treasury in return for cash. It may also hold some in order to return them to customers (for example as affiliate payments) and thus avoid the redemption fees. Treasuries settle their liabilities between one another on a regular basis.