Does Western Union need to watch out for bitcoin?

WesternUnion10 Feb 2014 / CNN FORTUNE — On Feb. 6, San Francisco-based Bitcoin services startup ZipZap announced the launch of cash-for-bitcoin services at 28,000 retail locations in the U.K., including omnipresent convenience stores such as Spar and Tesco Express. To buy bitcoin, buyers connect a ZipZap account to their bitcoin wallet, then print or load to their smartphone a scannable barcode that they take to a ZipZap affiliate location. A clerk scans their barcode, then accepts their cash payment. Bitcoins arrive in their wallets within minutes through one of ZipZap’s partner bitcoin exchanges. Fees for the service are currently £3.95 (about $6.50), with a maximum £300.00 ($500) worth of bitcoin purchased.

The service provides a complement to recent adoption by major online retailers like (OSTK) and — it is now, at least in the U.K., as easy for the non-tech savvy to buy bitcoin as it is to spend it. ZipZap’s ultimate goal, though, is not just to help curious first-worlders buy bitcoin, but to provide both cash-in and cash-out capabilities globally. “We’re in the process of making our brand trustable, at least for the cash-in process, and then we will launch the cash-out process,” says Joaquin Moreno, ZipZap’s regional manager for Latin America. “Once [buyers] get the bitcoin, they can use them online, or they can send it to their family around the world,” says ZipZap CEO Alan Safahi. By providing on- and off-ramps to the global, nearly-free Bitcoin network, ZipZap would create a remittance system to rival those of Western Union and Moneygram.

Bitcoin advocates regularly call out the remittance industry as a near-monopoly profiting from migrant workers and the underbanked. Safahi is clearly a man on a mission in this regard: “You help the poor get out of poverty by reducing their remittance cost,” he says, citing global remittance volume of more than a half trillion dollars a year, and fees that average 9% and peak at 25% or more….. Read more

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