updated 10:08 am EDT, Wed August 13, 2014
Startup aims to bridge digital currencies, normal currencies, loyalty points with debit card
A startup is attempting to make it easier for people to pay for goods and services using digital currencies. Shift Payments, backed by Y Combinator, is testing a debit card which lets users spend Bitcoin and other cryptocurrencies as if it is a normal fiat currency, with a view to allowing customers to switch between virtual currencies, normal funds, and loyalty points in the future.
So far, only 100 people are testing Shift payment cards, reports TechCrunch, though this was not originally the case. The company's original banking partners reportedly pulled out of the project, with some balking at a test of just ten cards. "We learned very quickly that no bank here in the US is willing to take that leap and actually support something like this," said co-founder Meg Nakamura, continuing "They were just too nervous and no-one was willing to take that reputational risk." Shift is also working with an unnamed payment processor for the digital currency transactions, which will see money being deducted from customer's Coinbase accounts.
While the ability to spend Bitcoin as easily as dollars or pounds may be useful, the move into spending loyalty points may be a more profitable avenue for the company. "Bitcoin's market cap today is only $8 billion," states Nakamura. "We're talking about 6 times larger per year in just the loyalty points alone. We think it's a big opportunity."
Shift is accepting applications to join the service in beta in the future, despite it still undergoing testing.