CoinBase Card Set for Tests, But the IRS is Watching

When Shift Card, CoinBase’s crypto debit card provider shut down in a huff earlier this year, it left a gaping hole that CoinBase has quickly covered …

When ShiftCard, CoinBase’s crypto debit card provider shut down in a huff earlier thisyear, it left a gaping hole that CoinBase has quickly covered with the CoinBaseCard. Launched first in the UK, the card has enabled its users to seamlesslyexchange crypto to GBP in an instant for withdrawal on ATMs or for payments inthousands of stores nationwide.

The debitcard issued by PaySafe can be managed via CoinBase’s card app that is linked toa crypto user’s account. The app is both iOS and Android compatible and allowsusers to seamlessly swap between wallets as it supports assets listed on the CoinBaseplatform meaning users can shop using their ETH or BTC.

Besides,from the app, a shopper will receive receipts for payments and transactionsummaries as well. In short, what thecard simply do is to allow crypto holders to efficiently operate in the legacyfinancial market making the crypto mass adoption dream more valid by the day.

Criticsagainst Huge CoinBase Card Fees

To use the debit card in the UK, some transactions fees willbe charged, a price that is not common with usual Visa transactions of the domestickind. The card issuing, for example, costs $6.48, and there will be a charge of2.49 percent per purchase.

When this cost is split up, it adds up to 1 percent perpurchase for transaction fees and a 1.49 percent for crypto to fiat conversionfee. To reverse a transaction, the debit cardholder will be forced to part with$26.19 while the spending limit is capped at a daily $13,092.

Skeptics are however not impressed, describing these rather exorbitant charges as CoinBase’s attempt to milk profits from transactions. They decry the huge margins charged on transactions and advise crypto users to ditch the card and rely on the internet. In fact, a Redditor seem to remind the community that Bitcoin and crypto is in essence internet money eliminating middle men;

Lex Sokolin formerly of Autonomous Research adds to thecriticism saying that:

“Riding the open loop networks of Visa and MasterCard is a faster way to market, but not a transformational one in terms of industry economics.”

However, Zeeshan Feroz, the CoinBase UK CEO countered saying themission of the exchange is to make it easy to spend and use crypto “to create a more open financial system.”

He continues, adding that:

“Customers can use their card in millions of locations around the world, making payments through contactless, Chip and PIN, as well as cash withdrawals from ATMs.”

TheIRS Watching Crypto Spenders

The usage of the CoinBase Card in the US is going to more expensive than in the UK because there are capital tax gains to consider. The US taxman requires all crypto asset investors, Hodlers included to evaluate each crypto transaction and vet it for taxation thoroughly. There are taxes for instance paid for crypto to fiat conversions, as well for shopping using digital tokens.

Simple transactions such as purchasing one token with theother and the reception of mined tokens are taxable as well. The IRS has goneas far as requiring the taxation of airdrops as well. So, if these tax costsare combined with the transaction costs of using the CoinBase Card, the cardmight prove to be too expensive to use in the land of the free.

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Co-op Financial Services debuts solution lines ecosystem for credit unions

Co-op Financial Services has developed new solution lines that align payments and financial technology solutions along five categories of products …

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FSS receives honors for prepaid, online, alternative payment solutions

Financial Software and Systems Pvt. Ltd., a digital payment and financial technology company, has been recognized for excellence and leadership in …

Financial Software and Systems Pvt. Ltd., a digital payment and financial technology company, has been recognized for excellence and leadership in cards and payments at the 2019 Golden Globe Tigers Awards held in Malaysia.

The company received top honors for its prepaid card management suite, payment gateway and eFInclusiv in the categories “Best Prepaid Card Product,” “Best Online Payment Solution” and “Best Alternative Payment Solution.”

FSS Prepaid Card Management Suite is a complete solution for end-to-end lifecycle management of cards from application processing to reissuance or account closure. The suite supports open and closed loop cards across multiple categories, and incorporates instant issuance, loyalty, extensive reporting, and comprehensive security controls.

FSS Payment Gateway, a white-label solution, powers digital payments acceptance and processing for tier one banks and merchants. Out-of-the-box integration enables merchants to accept any currency via any payment method originating from any channel. The gateway provides dynamic currency conversion, optimized checkout with support for recurring and card-on-file transactions, advanced real-time fraud detection capabilities and 3DS-compliant customer authentication.

FSS eFinclusiv brings consumers and merchants into the formal financial services fold. Customers can open accounts and deposit, withdraw and transfer monies at agent locations equipped with micro-ATMS. Micro-merchants can use low-cost mobile devices on a scalable acceptance network to accept biometric-based payments. FSS eFinclusiv utilizes the India Stack to enable Know Your Customer, eSign and Aadhar Vault capabilities.

“We are proud to receive this prestigious international recognition,” Suresh Rajagopalan, President of Retail Payments at FSS, said in the release. “The achievement is an acknowledgement of FSS technology expertise and ongoing commitment to bring relevant market innovation to address a range of payment needs and advance the growth of digital payments. “

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It’s still “a little early” to focus on bitcoin, PayPal CFO says

Turnout for the virtual MakerDAO Governance & Risk roundtable was …. to money transmission involving “convertible virtual currencies” (“CVC”).

PayPal is still cautious when it comes to cryptocurrencies, PayPal Chief Financial Officer John Rainey said in an interview for Yahoo Finance. Rainey said that PayPal used to allow merchants to accept bitcoin payments but the company quickly noticed that due to high volatility, merchants would quickly convert bitcoin to fiat currencies because of volatility.

That isn’t to say the company is ignoring the cryptocurrency space altogether. “We have teams clearly working on blockchain and cryptocurrency as well, and we want to take part in that in whatever form that takes in the future—I just think it’s a little early on right now,” said Rainey.

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Social selling startup Beidian raises RMB 860 million, challenges Pinduoduo

According to the company, it has attracted prominent venture capital funds as major investors, including Hillhouse Capital, Sequoia Capital, Sinovation …
May 10, 2019

2 min read

(Image credit: Beidian)

Chinese social retail startup Beidian announced Wednesday it closed its first round of funding totaling RMB 860 million ($126 million), as another Pinduoduo challenger joins in on the e-commerce fray.

According to the company, it has attracted prominent venture capital funds as major investors, including Hillhouse Capital, Sequoia Capital, Sinovation Ventures, and Gaorong Capital, among others. The funding will be used to upgrade its supply chain management system to improve the shopping experience, led by influencers or key opinion leaders (KOLs) on the platform, said Beidian in an announcement.

A subsidiary of mom and baby-focused e-commerce website Beibei, Beidian was founded in August 2017 by Allen Zhang, a former Alibaba product manager in Hangzhou, the capital of Zhejiang province in eastern China. Beibei most recently closed a Series C in January 2015 from investors including Chinese equity firm New Horizon, as well as Capital Today, an early investor of online retail heavyweight JD.com.

In an open letter sent earlier this year, Beidian’s president Gu Rong touted the company’s “proprietary” e-commerce model, in which the platform forms partnerships with brands, manufacturers, and agri-food suppliers, and verifies the authenticity and quality of the products. The platform stocks and ships goods to customers, unlike Alibaba’s massive C2C platform, Taobao, which does not hold inventory.

“Merchants” act like product ambassadors and promote goods in their social networks, including friends and acquaintances, a company spokesman told TechNode. To encourage the social aspect, he added, buyers are offered discounts for promoting products to their social network.

The model addresses a key weakness in rival Pinduoduo at present: the issue of product authenticity. Beidian develops relationships with manufacturers and brands, then authenticates the goods itself, a strategy that Shanghai-based Pinduoduo is also adopting as its reputation as a platform for counterfeits has proven hard to shake.

Zhou Jiajun, Investment Director for Sinovation Ventures said in an announcement Thursday that despite the density of players in the e-commerce market, Beidian’s growth figures “was beyond our expectation,” (our translation). The China-focused tech VC had avoided investments in retail businesses, but now says that it expects a profit-making period for e-commerce players in the WeChat ecosystem. Beidian’s cost structure adds a margin of safety, it added.

China’s social e-commerce market has become increasingly crowded. Hangzhou-based Yunji plans to raise $200 million in an US initial public offering (IPO) filed last month. According to market research firm Questmobile, the number of monthly active users (MAU) from Beidian surged 550% year-on-year to 13.29 million in March, more than double that of Yunji (5.87 million), but one-twentieth the size of Pinduoduo (272 million).

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