Melbourne-based bitcoin exchange Coinjar is hoping to nudge the digital currency into the mainstream next month with the offer of the first eftpos card in Australia linked to a bitcoin account.
Coinjar co-founder Asher Tan said many of its customers had bought bitcoin as an investment and there was a growing number of companies that accepted it, but they were keen to use it for everyday transactions.
"Many people who have bought Bitcoin ask 'where do I spend it?'," he said. "This means anywhere that accepts eftpos accepts bitcoin now."
A trial of the cards will be done with about 100 people who already have bitcoin accounts over the next couple of weeks, and then they will be made available generally.
Coinjar, which has about 30,000 users and has so far processed about $50 million, makes its money by charging a 2 per cent transaction fee on exchanging bitcoin into standard currency and vice versa.
The exchange into Australian dollars will occur when Coinjar account holders load their cards from their bitcoin account rather than when they buy products with the card.
Asked why people would want to use bitcoin rather than standard currency, Mr Tan said it would expose more people to the benefits of a currency that can be instantly transferred and used outside the traditional payments network, with no cost apart from Coinjar's own fee.
"It is a first step, but it does open up a lot of opportunities," he said. "You could receive say $500 worth of bitcoin value from overseas for say an online job, like graphic design for [an overseas client] then you could be off spending your money in a matter of minutes."
Mr Tan said Coinjar didn't expect to make a lot of money out of the cards. The main game is online. "We have got a whole suite of apps coming out next month," he said. These include a new Android app and an update for the IOS 8 Apple system.
He said individuals can also transfer bitcoin between each other instantly now, including "micro payments" without incurring fees. "I could try to do that now between banks, and it will take overnight or I can do it via PayPal and you will get hit with fees," he said. "There is no real answer."
People still keep money in a bank account to buy or sell bitcoins to Coinjar. Once there, however, this allows bitcoin to be exchanged for something via the card without going through a bank or bank linked card.
"It is one step towards creating a more efficient financial system," he said.
Banks now allow instant transactions between account holders within the same bank and the New Payments Platform, once complete in 2016, will allow instant transfers of money between bank accounts.
Banks, however, are still unsure whether they will charge for instant payments because it will cost them millions to use the new architecture. They also question whether people want instant payments.
Bitcoin requires a lot of computer processing power to use because the bitcoin "block chain" is a record of all the bitcoin transactions. But Coinjar do the exchange of bitcoins for its customers for free.
The prepaid cards will be issued by listed company emerchant, which reported a 3 per cent rise in revenue to $5.2 million on September 2, but a net loss of $5.4 million
Read more:
http://www.smh.com.au/business/banking-and-finance/bitcoin-moves-towards-mainstream-with-eftpos-cards-20140918-10ijtf.html#ixzz3DimR3muK
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