Powerhouse bitcoin broker Coinbase — despite being one of the largest ways for Americans to acquire bitcoin — has aspirations of becoming even larger.
We’re talking multinational financial services large.
The San Francisco-based company reportedly wants to become the VISA or MasterCard of bitcoin when it comes to processing payments on behalf of merchants, reports the Wall Street Journal.
Coinbase CEO Brian Armstrong said that credit card companies are collection $500 billion in transaction fees per annum, adding that as digital currency solutions become more ubiquitous, that number will go down to $50 billion.
Coinbase has entered the payments processing space with some high-profile clients like the Sacramento Kings, the Chicago Sun-Times, Bloomberg, and Overstock.com — with nearly 31,000 other companies in tow.
They have some stiff competition if they want to make it to the top, though.
Competitor BitPay has over 30,000 merchants signed up as well, among which include electronics retailer TigerDirect and Richard Branson’s latest venture, Virgin Galactic.
And with the coming of Circle Internet Financial, they can soon expect to face an even more challenging landscape. Last week, Circle announced a bitcoin wallet service with zero fees. And while they haven’t announced any merchant services yet, it seems like it may be a likely route in the long-term.
When I asked Coinbase about whether they saw circle as a threat and what they would do to counter the company’s offerings, we received a quick reply with a “no comment” from a spokesperson.
While companies like VISA and Mastercard can charge merchants anywhere in the neighborhood of 3 percent per transaction, Coinbase’s merchant services tout zero fees for a merchant’s first $1 million in payment processing.
Following that, the merchant is required to pay one percent per cashout.
[textmarker color=”C24000″]Source[/textmarker] Wall Street Journal [textmarker color=”C24000″]Image[/textmarker] Brittany McLaren