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The issue of the transition to decentralized payment networks was again raised last week. On June 1, Visa, which usually deals with more than 150 million transactions a day, suddenly failed. Millions of people in the United Kingdom and Europe have not been able to pay for goods or services, and Visa payments have also been stopped for US residents.
Current tails to MK Tesco cash machines. I suspect this is a common scene across the UK now 😬 #visadown pic.twitter.com/YunwFA8lYz
– David Pride (@davejavupride) June 1, 2018
Several hours later, the problem was solved, but the simple fact of widespread failure indicated the need for decentralized and stable alternative systems, where such incidents are simply impossible.
Below we present an overview of several pioneers, who can become similar to a "cryptographic" Visa or MasterCard. They not only offer a complete solution for archiving, paying or managing cryptocurrency, but they also provide comprehensive tools for companies. More importantly: the transaction fees are three times lower or even non-existent compared to 3% of Visa.
BitPay
CEO: Tony Gallippi
Foundation: 2011
HQ: United States
Founded by Tony Gallippi and Stephen Pair in May 2011, BitPay became the first operator to work with Bitcoin. The development of this project started because of the need to create a quick, safe and economical way to pay for goods and services. According to the creators of BitPay, the goal of the platform is to become a cryptographic equivalent of Apple's Apple Pay payment system, which is reflected in the similarity of their names.
In 2017, BitPay processed more than $ 1 billion in Bitcoin payments. The next step for the company was the development of a Visa BitPay debit card, which allows payment via POS terminals, as well as deposits and withdrawals at ATMs.
Bitcoin holders can buy a card for $ 9.95. Funds can be deposited into the account directly from the Bitcoin portfolio or through an authorized provider. While BitPay requires a payment fee of up to 1.9%, processing speeds are a significant drawback.
In order to increase the scope and popularity of the application, BitPay announced support for Bitcoin Cash in addition to other currencies in December 2017. Although it may appear that the service has a higher reliability, various entries continue to persist in the application.
For example, last summer the Bitcoin community accused BitPay of fraud. The fact is that BitPay has deceived users, saying that it is necessary to activate the BTC1 client while refusing from Bitcoin Core. The reaction of Bitcoin Core supporters, including Peter Todd, Tuur Demeestr, Francis Pulio, John Carvalho, Rodolfo Nowak and others was immediate. All were negative about BitPay's offer to use an alternative to Bitcoin Core. In particular, Peter Todd defined the fraudulent proposal and encouraged other members of the community to participate in the proceeding. Programmer Eric Lombrozo appeal to its subscribers on Twitter to boycott any company that supports SegWit2x. In forums and social networks around the web, a discussion about Bitpay's offer continues.
Two weeks later, on December 24, BitPay again confused users when it announced that it would increase the minimum transaction amount to $ 100 in a December statement. In just two days, the company changed the value to $ 5, other surprising users.
Coinbase
CEO: Brian Armstrong
Foundation: 2012
HQ: USA
When it comes to reputation, it is worth noting a great player launched on February 14th. The Coinbase Commerce service comes from the Coinbase platform and allows merchants to accept payments in digital currencies with funds directly credited to the user's portfolio, leaving them in full control of the account. Functionally, the Coinbase Commerce plug-in is very similar to the PayPal payment system, which requires only a phone number and an email address.
The product accepts payments in Bitcoin, Bitcoin Cash, Ethereum and Litecoin and can be integrated into a checkout process or used as a payment service on e-commerce platforms.
Coinbase has firmly established itself as a processing operator for companies. To accept payments in Bitcoin, merchants are not charged any commission, but for the conversion of funds the system keeps a commission of 1%.
It seems that many guides and videos such as "Nobody Mikes Coinbase Fees" or "How to Avoid Coinbase Commission" are now in the past. But will the recent version help Coinbase "rehabilitate" itself for the 4% commission charged for debit card transactions?
GoCoin
CEO: Steve Beauregard
Foundation: 2013
Headquarters: Singapore
Before being launched publicly in 2013, GoCoin was developed by a single person for private purposes. It has now become a very popular digital currency platform and offers a payment gateway for online and retail merchants to accept BTC, LTC, DASH and BCH transactions. It was one of the first platforms to introduce tariffs for lower traders: only 1%, which falls to 0% after transactions exceeded $ 2,500 per month.
The platform can be installed as a plug-in and allows customers to pay with the digital currency of their choice along with USD, EUR and GBP. You can use different methods, from payment apps to hosted modules or buttons.
Since 2013 over GoCoin manages over 500 million transactions. What makes this platform promising is a large customer base 15,000 traders globally, including companies such as General Electric, Cozy Games, BitFury and Tesla Motors.
It is also known that GoCoin is supported by a number of industry leaders such as Owen Van Natta, former Chief Operating Officer of Facebook, and Brock Pierce, founder of Blockchain Capital.
CoinPayments
CEO: Alex Alexandrov
Foundation: 2013
HQ: Canada
CoinPayments started as the first multicoin payment processor in the world in August 2013. The platform focuses on creating an easy way to integrate a payment system for an incredible 535 cryptocurrency, including those widely used as BTC, ETH, LTC and smaller alternatives like PinkCoin and Triggers. The company also offers numerous shopping cart plugins, as well as customized payment solutions and merchant tools.
The level of service and the number of options are impressive for both buyers and sellers. Developers have not only limited themselves to payment tools and have built the platform in many online stores. Crypto lovers can choose from 16 product categories, including XBOX games, clothes, cat beds and even cannabis seeds.
Another unique feature available to users is the PaybyName service, which can simplify the life of any cryptocurrency or investor trader. By creating an account, you get a single address that can be used to send or receive supported coins.
Traders receive one of the most favorable conditions on the market: simplified registration, customer support and fixed fees of 0.5%.
Coinsbank
CEO: Vitaliy Andrusevich
Foundation: 2014
HQ: UK
An all-in-one gateway for blockchain services, Coinsbank was founded in 2016 under the name BIT-X. Initially, the BIT-X project was conceived as a cryptocurrency prepaid card service. After the rebranding of 15 August 2016, the Coinsbank has become a fully-fledged payment platform and since then has maintained high standards in all that is connected with the exchange or processing of cryptocurrencies. Despite a relatively small choice of supported cryptocurrencies, the constant daily trading volume of the platform allows Coinsbank to hold a position in the first 10 cryptocurrency exchanges.
Perhaps, its high levels of security and easy-to-use wallet service are better known than those mentioned above. The analyst Roger Aitken compared his cold storage with a bank box:
"Think of this as a bank account, with special access through two keys: one stored by the client and the other by the bank, where it is worth explaining that, in terms of security aspects offered by CoinsBank, without a user key "no external part" to the portfolio is able to compromise its security.
If, for example, someone hacked the CoinsBank system – as in the case where the bitcoin in Hong Kong was traded with Bitfinex in August with the theft of over 60 million Bitcoins – the former portfolio can not be bypassed / compromise as there is no "chance" to start transactions or make moves from them without the user's signature. "
Coinsbank has revealed to Cointelegraph information on the issue of cryptographic debit cards to be announced on the Blockchain cruise in September:
"Payment cards will be issued by the largest card provider in the world and will be available for users' orders shortly.The cards will work with cryptocurrencies available on the service: LTC, BTC, ETH, XRP."
Let's see if the fees will be as low as the current fixed-market service fee of 0.5%.
GoByte
CEO: Hisyam Nasir
Foundation: 2017
HQ: Malaysia
Other projects are not focused on the exclusivity of services and rather aim at technological perfection. One of these is GoByte Network, which is developing its payment service and offers 0% commissions for processing services within the platform and non-cash payments.
The GoByte Pay module interacts directly with the blockchain, creating and executing transactions that are subsequently confirmed by masternodes and miners for traders and consumers technically challenged on desktop, web and mobile. Being fast, secure and easy to use, GoByte Pay allows the user to have multiple portfolios in one account. While only the GBX currency is currently available for payments, developers promise to add new coins after the release of the Pay module in June.
The module is designed to solve the problem of a lack of adoption in retail stores by creating an API to help existing terminals to easily connect to POS terminals. Together with InstandSend and free transactions, GoByte is planning to release its cryptocurrency debit cards, ATMs and POS terminals.
Visa and conflicts of interest
A giant like Visa is a regular participant in conflicts with the above projects. In January 2018, Visa left users in Europe without debit cards. The order was sent to the WaveCrest payment platform, whose customers include several projects that work with Bitcoin, including BitPay, TenX, Bitwala and Wirex. As a result, many of them had to stop serving non-US customers.
The BitPay Card is no longer available from our European card issuer Wave Crest Holdings, Ltd. Find out more and discover the latest BitPay Card news: https://t.co/lI9wFpyPWx NOTE: BitPay Card users in the Member States United are not affected by this change. pic.twitter.com/uns1GVcgWJ
– BitPay (@BitPay) 5 January 2018
This year a scandal broke out between Coinbase and Visa, based on incorrect user account withdrawals.
1 / We have ascertained that the incorrect charge and debit costs derive from Visa revocation and top-up operations. This was not done by Coinbase. We are working with Visa to ensure that all affected customers are reimbursed.
– Coinbase (@coinbase) February 16, 2018
The developers of cryptocurrencies continue to pursue the goal of monetization with the help of processing systems. To date, fees for the deposit of funds by credit cards are 3%. It seems that many project creators these days try to put their startups in mobile applications, bypassing the problem of plastic cards, because now the use of NFC on smartphones allows customers to immediately pay for purchases made by placing the phone next to the seller's gadget. It may be much easier and more convenient to scan a QR code for Bitcoin mobile payments. Probably in the near future users will be able to completely disable the QR in favor of NFC.
In summary, at the moment there are no reasons to think that anyone could be a strong competition for the Visa system. For a large number of people, functional convenience, reliability and ease of use outweigh the costs of commissions that are almost 3 times smaller.
It is possible that one of the solutions above will earn a significant share of cryptocurrency transactions, demonstrating its security and developing positive relationships with the necessary regulatory bodies. Meanwhile, in an ambiguous regulatory environment in several jurisdictions, the future development of such projects remains difficult to predict.
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