Bitcoin as a Widespread Payment Option? Interview with Sung Choi

Have you heard of Bitcoin? You need to read this with a sarcastic tone, obviously. The most famous cryptocurrency has been at the centre of all the financial news for quite some time. However, this has been more linked to its interest as a speculative investment or store of value. Depending on whom you ask. However, Bitcoin is not really considered a payment option. You know, to buy stuff. So what about the “currency” in “cryptocurrency”? Are we close to seeing Bitcoin as a widespread payment option? Fintech Review asked a few questions to Sung Choi, VP of Corporate Development at Coinme, a digital currency exchange.

Tell us more about Coinme, what is your elevator pitch?

Coinme is the largest cash on/off-ramp to crypto in the world. We power over 14,000 physical locations across the U.S. through partnerships with traditional financial companies like Coinstar and MoneyGram, where users can buy or sell crypto with cash. Coinme also offers a mobile app with a digital wallet. Our users will soon be able to buy and sell crypto in-app, using digital payment methods.

What is your background, and what is the story behind the company?

Before joining Coinme in 2017, I worked in the renewable energy industry, owned and ran a restaurant/bar in Seattle and worked in real estate development. In addition, I have degrees in law, aerospace engineering, and economics. Somehow, all of these experiences are surprisingly relevant in the crypto industry.

Coinme was founded in 2014 and established the first licensed Bitcoin ATM in the United States to make cash-to-Bitcoin access easier for everyone. However, around 2017, the company realized that the best way to provide easy and ubiquitous access to crypto for everyone was to crypto-enable legacy financial institutions. Our first partnership was with Coinstar in January 2019, where we enabled thousands of Coinstar kiosks in U.S. grocery stores to allow people to purchase Bitcoin with cash. Since then, we’ve embarked on a new partnership with MoneyGram to crypto-enable their agent locations to offer the sale and purchase of Bitcoin with cash. 

Are retailers embracing Bitcoin as a payment option?

Many retailers have begun adopting cryptocurrencies like Bitcoin as a payment option. That is due to increased customer demand and the potential for cheaper and more efficient payment processing.

A couple of months ago, AMC announced they would take bitcoin payments by the end of the year. And a few weeks later said they would also accept Litecoin, Ethereum and bitcoin cash. In addition, others such as Amazon and Walmart have begun hiring crypto experts for their payments teams to help formulate their crypto payments strategies.

Some retailers like Whole Foods and Home Depot have been accepting bitcoin payments through Flexa (a technology that instantly converts bitcoin into dollars) since 2019, so it’s an established trend that has recently continued to accelerate. 

What do you see as the main challenges to Bitcoin being used more for payments?

The main challenge is setting up the infrastructure for something as ubiquitous, simple and easily understood as a Visa, MasterCard, or even PayPal or Venmo. Though peer-to-peer payments between crypto wallets are cheap and efficient, it’s still not as simple as traditional payment methods. As a result, the crypto industry needs to find a way to preserve the benefits of crypto payments while also ensuring a familiar user experience.

We have an opportunity to do so now that consumers widely embrace digital payments. For example, you can now use Apple or Google Pay at CVS and other retailers, giving consumers an added layer of convenience to quickly adopt these digital payment methods. 

However, this integration into the existing payment infrastructure will come at an additional cost to the retailer. Using rails like Paypal or Venmo is cheaper than using Visa or Mastercard. Suppose bitcoin payments can use the NFC capabilities of Apple Pay or Google Pay without having to go through network rails like Visa or Mastercard. In that case, this will result in cheaper payment processing options. In any case, retailers will have to update their payments systems to make it possible, which may be problematic for adoption. 

Any innovation in fintech more broadly you’re really excited about?

I’m very excited about decentralized finance’s (DeFi) impact on the greater financial industry. DeFi provides a global, open alternative to any financial services a bank offers, from borrowing, saving, investing to trading. Users can cut out the traditional institutions and interact directly, often resulting in better rates and returns for the users. 

And since it’s all based on open-source technology, anyone with a computer will be able to collaborate to build a better financial system. Whether you’re located in Silicon Valley or Azerbaijan. So this will indeed be an open financial system where everyone can benefit.

Over the next few years, we’re going to see how DeFi evolves and the benefits that it can deliver. But even at its current nascent stage, it’s showing excellent results to its users.

Any plans for the future or product roadmap you want people to know about? 

We’re enabling our mobile app to buy and sell cryptocurrencies with digital payment methods. We’re also looking to expand internationally next year through existing and new partnerships. So stay tuned, and we’ll be sure to let your readers know!