Digital currencies companies are fighting to provide users with end-to-end platforms, spanning the ever wider range of services people are coming to expect from FinTech providers.
New companies continue to enter the FinTech sector, hot on the heels of the 36 that reached billion dollar valuations in the last two years. Startups are increasingly looking towards offering end-to-end services to keep their users on their platform and away from those of their competitors.
CoinTelegraph spoke to Alex Alexandrov, CEO at CoinPayments, about how the company has seen its range of services grow since launching as a digital currency payment platform in 2013. The service has expanded to sell bitcoins directly to customers, and also recently began processing merchant payments directly into fiat currencies for them. Alexandrov explained why he saw creating this wider platform as important:
“We believe that in the future, most of the payment processing and exchanging will become decentralized as it is a more effective and secure way of handling finances for people long-term. By adding additional services to our system, our goal is to offer a broader service to our clients which will engage them for years to come by simplifying their life and having everything in one convenient place.”
Elsewhere, major incumbent Coinbase announced on June 17 that they had expanded their service beyond the traditional realm of the digital currency exchange by offering an “instant exchange” that allows users to purchase bitcoins, funding them from their normal bank account and send them, in a single transaction. The move again encourages users to stick simply to the Coinbase platform, for a wider range of tasks.
Easing the join between fiat and digital currency is something CoinPayments has also been tackling, with the introduction of their automatic digital-to-fiat feature for merchant users. Alexandrov told CoinTelegraph how this had come about:
We believe that our goal is to bring fiat conversions to all sides of the world by working with local exchanges which offer exchanges and ripple gateways, proper KYC, and compliance in their respective territory which is only now becoming mature enough for us to do that.”
Unlike Coinbase, however, who enjoyed a US$75 million funding round in January, CoinPayments has received a little under US$100,000 total funding from Newnote Financial (CNSX:NEU 0.08). The risk for smaller companies seeking to achieve this end-to-end service offering could be that limited resources end up thinly spread. Alexandrov explains how the company got to where it is now:
“Comparatively, we are a very small group of people that started the company on bitcointalks forum and have been able to accomplish great things with very little outside funding. Despite the change of company ownership back in the spring of 2014, every person who started this company and contributed to it is still working with us today.”
The solution CoinPayments has settled upon is to try to ensure they really are responding to the exact demands of their customers. While users expect an increasing list of functionality, Alexandrov explained how his businesses has to take care to make sure that the company is not adding unnecessary features:
“All of our features are decided upon by directly communicating with our community. We were the first to introduce paid public vote in order to decide which alt coins to add to our service, as we felt it was the community’s decision to make and not ours.”
As these FinTech companies expand into larger end-to-end service platforms, the risk of failure is raised. However, the potential rewards of having a loyal customer base who doesn’t need to use alternative companies’ platforms could mean the company enjoys longer success.
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