Buying Bitcoin for the first time remains a major struggle for novice digital currency users. Even though there are plenty of exchange platforms to choose from, as well as peer-to-peer solutions such as LocalBitcoins, people want more convenient options. Simplex is a new startup that wants to facilitate the purchase of Bitcoin through credit cards.
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Simplex Unifies Bitcoin And Credit Cards
For quite some time now, a lot of people around the world have been looking to buy Bitcoin with their credit card in a convenient way. But there is a valid reason so few Bitcoin exchanges are dealing with credit card payments, as there is a high fraud rate. Funds can be charged back from a credit card payment, but Bitcoin transactions can not, which puts the exchanges at a severe disadvantage.
Simplex, an Israeli Bitcoin startup, may have solved the problem, though. Their service will give Bitcoin exchanges access to an API that makes accepting credit card payments risk-free for them. Not only will this help Bitcoin in gaining higher adoption rates, but it would also further bridge the gap between traditional finance and digital currency.
Up until this point, buying Bitcoin from an exchange usually means consumers have to send a wire transfer. Depending on the region where they live, these transfers can be anywhere from instant to taking five business days to complete. Needless to say, this is far from a perfect solution, although it offers the best financial protection for Bitcoin exchanges.
At the same time, various banks around the world have begun to block transfers made to either buy or sell Bitcoin. These restrictions are hurting the digital currency ecosystem in the long run, as consumers get the idea Bitcoin is unobtainable except by a select few. Plus, not every country has their own exchange, making international wire transfers harder and more expensive.
The main goal of Simplex is to provide convenient and frictionless purchasing methods for Bitcoin. By removing some of the restrictions associated with wire transfers, the purchase should complete almost instantaneously. Every partner will have their payments processed by Simplex, removing any risks associated with this payment provider for the exchange or broker.
Former PayPal Employees At The Helm
It hardly comes as a surprise to hear former PayPal employees are venturing into the world of Bitcoin and digital currencies. Both Netanel Kabala and Erez Shapira have worked many years for the traditional payment processor, and their knowledge will be of great value to the service offered by Simplex.
Speaking of which, the company has allegedly processed over US$3.5m in transactions since going in open beta twelve months ago. That success has attracted attention from investors, including Bitmain and Cumberland, and the recently successful funding round will help the company launch in full over the next few months.
What are your thoughts on the service offered by Simplex? Let us know in the comments below!
Images courtesy of Simplex, Shutterstock