Following its existing support for the US dollar, Circle is allowing individuals to make GBP payments that effortlessly cross currencies as needed – in an instant and with no fees. The Boston-based company has dropped transaction and withdrawal limits for customers in the more than 150 nations where Circle is available.
“With this launch, for the first time ever, consumers in the UK and consumers in the U.S. can beam dollars and sterling pound back and forth instantly with no fees,” said Circle CEO Jeremy Allaire in an interview with Forbes. “So it’s very disruptive to how money moves not only domestically, but around the world.”
For its UK entrance Circle partnered with Barclays Corporate Banking, which is providing the firm the account it needs to store GBP for customers and the infrastructure enabling the transfer of funds in and out of UK bank accounts.
“We support the exploration of positive uses of blockchain that can benefit consumers and society,” said a Barclays spokesperson in a statement supplied to Reuters.
In a first for a digital currency firm, Circle was also granted an e-money license by the UK’s Financial Conduct Authority (the company was also the first to receive a BitLicense from New York State). Forbes reported that the license allows Circle to hold GBP, facilitate consumer and business payments, operate a currency exchange and move GBP globally. The magazine also noted that the EU-wide license grants Circle the opportunity to launch across Europe.
“We’re first launching in the UK, which is a natural market, and has great infrastructure partners, but we now can ‘passport’ that license through Europe, so [we] will be incrementally rolling out across Europe over the remainder of the year,” said Allaire to Forbes. His company estimates that Europe has 800 million prospective consumers.
With Circle Pay, users can personalize messages accompanying money transfers with pictures, emojis and GIFs similar to the social payments apps WeChat Pay and AliPay in China.
“The founding vision [Co-founder and President of Product and Operations Sean Neville] and I was that money should work the way the internet works,” said Allaire to Reuters. “This is the thing that I think we’re all learning from the Chinese: that this merging of messaging, media and payments together really makes sense to people.”
Half a billion people in China are using social payments, while in the West such services have not really emerged. “There’s virtually no major players,” Allaire said in an interview with TechCrunch. “The opportunity is wide open.”
However, he does point to PayPal’s Venmo as an existing American competitor, although he argues that it has not been able to obtain “anywhere near the scale you see with traditional Internet apps.”
Speaking with Forbes, Allaire explained that Circle’s advantage is that it is not a closed system. “[Venmo is] only useful if the other person has it.” By contrast, Circle users can send funds to any e-mail address or telephone number, whether or not the recipient has a Circle account.
Circle is also pushing for an international app that works across currencies. “That’s different from Venmo which is only a U.S.-based product,” Allaire said to Forbes. “It’s closed, and it’s only in one currency and one market.”
Ultimately, though, the aim is for the blockchain to enable individuals to transact across applications.
“We’d love to see a world where Venmo added support on the blockchain, then a Circle customer could pay a Venmo customers using their QR code or their blockchain address – and go between those instantly and for free,” said Allaire to the magazine. “We’re hoping that other companies that provide services – whether banks or other payment apps or other financial institutions around the world – adopt these protocols so we can exchange value with each other all around the planet without having to just use one service.”
Circle, which has raised approximately $75 million, is not itself currently taking revenue, given that it doesn’t charge fees, reported TechCrunch. Allaire told the publication that the big vision is moving funds around digitally should always be conducted without fees, and instead a socially-oriented, user-friendly app would prompt consumers to pay for extra features – once they’ve come to rely on Circle for their core money-transfer needs.
“We really do fundamentally believe that sending and receiving money, which is really just updating databases, is something that is free…We don’t really believe that’s a viable business model,” Allaire said to TechCrunch. “There are other valuable things that financial services companies do – future products that we would like to build and explore – but the payments side of it is intended to always be free. Or as very very close to free as we can possible get.”
Allaire told Forbes that down the line, Circle sees a potential to amass revenue in the time value of money, “which is ‘I don’t have money right now, but I would like money right now, and I would pay a fee over time to have the money right now, i.e. credit, loans. The flip side is ‘I have money right now, but I don’t need it, and I would be willing to share with people if I’m able to be paid for sharing it for a period of time.’ And that time value of money is where real economic value gets created in the economy for consumers and businesses, and that scenario is of interest to us.”