Crypto is increasingly being used for everyday transactions, mirroring the traditional role of cash. Neil Bergquist, founder of crypto exchange Coinme, recently shared insights into how his company is facilitating this shift, particularly for online payments and cross-border remittances.
Coinme, which has been powering bitcoin ATMs for a decade, has positioned itself as a bridge between the traditional cash economy and the burgeoning world of crypto. With a network of physical locations within 5 miles of roughly 90% of the American population, Coinme has solved what Bergquist calls “the access problem,” making it easier for people to buy, sell, and use cryptocurrency in their daily lives.
“There are more Coinme cash locations than the largest private bank ATM networks or branches,” Bergquist says. “So you can actually use cash and buy crypto at more locations in the U.S. than you can deposit cash to the largest bank network ATMs.”
Online Payments
While credit and debit cards have long dominated the e-commerce space, Bergquist argues that they weren’t built for the internet age.
“Decades ago, American Express came out with a diners card, which was built for paying a restaurant. The concept of a credit card wasn’t built for the internet.” he explains. “With the growth of e-commerce, people are using debit and credit cards online, and the reason why the merchant has to pay so much to accept a debit or credit card is because of fraud and chargebacks.”
Cryptocurrency, on the other hand, offers a potential solution to these issues. Bergquist points out that crypto transactions are irreversible and remove the chargeback risk, potentially reducing costs for merchants.
“Crypto truly is a digitally native form of money and has solved the problem of trust in a digitally native world,” he says.
Coinme facilitates this use case by allowing users to easily convert cash to cryptocurrency at numerous locations. Users can then use this crypto for online purchases with merchants who accept it. The company has also developed technology to make these cash-to-crypto conversions more efficient to reduce transaction fees.
“We batch bitcoin transactions,” Bergquist explains. “We handle such a high volume that we can take hundreds of bitcoin transactions and broadcast them to the network as a single transaction, which then takes that $5 to $10 bitcoin blockchain fee and divides it among a hundred transactions, so then it reduces the cost to send significantly.”
Remittances: A Cross-Border Cash Alternative
Bergquist also sees potential for crypto to disrupt the remittance market. Traditional methods of sending money across borders can be slow and expensive, particularly for the unbanked or underbanked populations who often rely on cash-based services.
While international bank wires can take days and often involve multiple intermediaries, crypto transactions can be completed in minutes or even seconds, depending on the network used. And it can be cheaper.
“If you want to transfer money from your U.S. bank account to an international bank account, it’s usually around a $35 international bank wire fee,” Bergquist points out. “But you could send crypto on-chain for pennies to nearly any wallet in the world.”
Moreover, cryptocurrency offers a level of financial inclusion that traditional banking systems struggle to match. Anyone with a smartphone can set up a crypto wallet, regardless of their banking status. This can be particularly beneficial for migrant workers sending money back to their home countries.
Coinme’s role in facilitating these remittances is crucial. By providing easy on-ramps and off-ramps between cash and crypto, they make it possible for people to use this technology without necessarily understanding all the technical details.
“We handle that complexity on the back end so that you can have the delightful user experience of near instant and free peer-to-peer or payment type transactions,” Bergquist said.
‘A Multicurrency Life’
Crypto use cases will no doubt expand and be refined over time, but Bergquist sees a future where crypto becomes an integral part of the financial ecosystem, coexisting with traditional forms of money and offering users more choice and flexibility.
“Why not give people a choice of what currency they want to live in?” he asks. “That’s a huge concept. That’s a huge new idea. People can now live a multicurrency life.”
