Coinme CEO Neil Bergquist: Both Merchants and Consumers Can Benefit From Using Crypto for Digital Payments
July 10, 2024 (Investorideas.com Newswire) Digital payments are ubiquitous, but so are the fees that accompany those payments. In recent years, cryptocurrencies like bitcoin have emerged as a potential solution to some of the inefficiencies and limitations of traditional digital payments. More merchants and consumers are exploring the benefits of using crypto for transactions, and companies like crypto exchange Coinme are positioning themselves as key facilitators of this shift toward a decentralized, blockchain-based financial system.
At the heart of bitcoin's appeal as a payment method is its underlying technology. Unlike credit card transactions, which require intermediaries and can be reversed through chargebacks, bitcoin transactions are peer-to-peer, immutable, and virtually impossible to counterfeit or reverse once confirmed on the blockchain.
"Crypto truly is a digitally native form of money and has solved the problem of trust in a digitally native world," says Neil Bergquist, co-founder and CEO of Coinme.
Lower Fees
Irreversibility and a lack of intermediaries translate to lower transaction fees for merchants accepting crypto payments. According to a recent survey, 77% of merchants cited lower fees as a critical driver for adopting cryptocurrency payments. In contrast to the 1.5% to 3.5% fees charged by credit card networks, bitcoin transactions have historically ranged from 0.5% to 2.5%.
When a merchant receives crypto payments with lower fees, they can pass on those savings to the consumers.
“We have customers who use crypto as payment for a merchant who offers incentives to pay with bitcoin because it cuts out credit card companies like Visa and MasterCard,” says Bergquist. “The merchant's not having to pay 2% to 3% to Visa or MasterCard. A merchant can accept crypto and they're charged 1% or less because there's no chargeback risk.”
Moreover, the decentralized nature of crypto means that transactions can be conducted seamlessly across borders without the need for intermediaries or the hefty fees associated with cross-border remittances through legacy money transmitters. The global average cost of sending remittances is 6.39% of the total amount sent, while bitcoin can be sent for a few cents per transaction.
"Crypto is built on blockchains. Blockchains are digitally native. It doesn't matter which country you're in, you're able to process and settle transactions as long as you have an internet or cellular connection,” says Bergquist. "And that's the beauty of an open financial system."
Freedom From Financial Institutions
Beyond cost savings, crypto offers merchants and consumers alike a degree of autonomy and freedom from the constraints of traditional financial institutions.
Blockchain technology underpins the operation of cryptocurrencies like bitcoin by distributing the transaction data across a network of computers. This decentralization is critical for ensuring that no single entity, such as a bank or government, controls the transaction data. Each transaction is recorded on a block and linked to preceding and succeeding blocks, creating a secure and immutable ledger.
And the reliance on cryptographic methods further enhances security and privacy, allowing users to transact anonymously. When a transaction occurs, it’s encrypted and assigned a unique digital signature. This method ensures that the transaction originates from the sender and hasn’t been altered while in transit. Blockchains bypass the need for intermediaries like banks to verify a transaction, offering users freedom from the oversight mechanisms typical of conventional financial systems.
This is an idea that appeals to many younger, tech-savvy consumers and those who value privacy. Merchants are listening, with 85% surveyed citing crypto payments as a way to reach more customers.
“I’ve learned that consumers don't always want their bank account to be watching their every move in a Big Brother way,” notes Bergquist. “They believe cash is freedom, and they love bitcoin because they believe bitcoin is freedom from the existing establishment.”
Bitcoin ATMs and Broader Adoption
While the underlying technology of cryptocurrencies offers clear advantages for digital payments, widespread adoption has been hindered by issues of accessibility and user experience. Coinme's business model aims to address these pain points by bridging the gap between the traditional cash economy and the world of crypto.
Founded in 2014, Coinme was among the first companies to deploy bitcoin ATMs, enabling users to exchange cash for cryptocurrency and vice versa. At a time when the process of acquiring and using bitcoin was still daunting for the average consumer, Coinme's kiosks offered a simple, familiar way to enter the crypto ecosystem.
"We handle that complexity for you," Bergquist explains. "You don't need to download a wallet, you don't need to worry about digging up a landfill because you lost your USB stick in order to access your bitcoin."
Over the past decade, Coinme has built on this idea and grown from operating a handful of bitcoin ATMs in the Seattle area to partnering with major retail companies like Coinstar and MoneyGram to crypto-enable its existing financial infrastructure, giving it a presence at over 40,000 physical locations in the U.S. — the largest cash-to-crypto exchange network in existence.
In 2019, Coinme's integration with a few hundred kiosks in Coinstar's network to now nearly 10,000 Coinstar kiosks across the United States, dramatically expands mainstream consumers' access to cryptocurrency. Rather than deploying dedicated crypto ATMs, Coinme designed enterprise software that enabled existing Coinstar machines to facilitate the exchange of cash for bitcoin and other cryptocurrencies.
"Why deploy crypto-specific ATMs when you can just crypto-enable all the existing ATMs?" Bergquist posits.
This strategic partnership was followed by a 2021 agreement with MoneyGram that gave Coinme users the ability to cash in and out of cryptocurrency for physical dollars at roughly 10,000 additional locations. In 2022, MoneyGram doubled down on its commitment to crypto by acquiring a 4% stake in Coinme.
As Coinme continues to grow its retail footprint, it’s also enhancing the user experience for its customers. In March of this year, the company announced that crypto purchases made at over 9,700 Coinstar kiosks would be automatically loaded into users' digital wallets, eliminating the need for redemption codes. Purchase limits were also raised, with customers now able to buy up to $9,500 worth of crypto per day and $60,000 per month using cash. Purchase limits vary by state, and first-time Coinme customers can purchase up to $999 per day in crypto.
"We want to make the cash-to-crypto buy and send experience as simple as sending an email," says Bergquist.
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Contact each company directly regarding content and press release questions.. More disclaimer info: http://www.investorideas.com/About/Disclaimer.asp. This article is a third party guest post published content and not the content of Investorideas.com . Learn more about posting your articles at http://www.investorideas.com/Advertise/
Please read Investorideas.com privacy policy: https://www.investorideas.com/About/Private_Policy.asp
