Expensify Brings Bitcoin to Main Streetby
Paul Ford writes eloquently in this week’s Bloomberg Businessweek on the rise of Bitcoin, the “media-friendly, anarchist crypto-currency” whose value jumped as the European financial crisis landed on the doorstep of Cyprus’s banking system.
For the unfamiliar, Bitcoin is a form of virtual cash that’s made secure by complex computations (that’s the crypto part) and isn’t backed by any government (the anarchistic aspect). To Ford, Bitcoin is an “excellent indicator of anxiety,” often most popular with those who’ve lost trust in the world’s monetary institutions.
But the virtual currency may have another thing going for it: practicality. Yes, Bitcoin can be difficult to wrap your head around, and it’s not the best solution for buying a quart of milk. But for fast, no-fee money transfers, it can’t be beat.
That’s the point recently made by Expensify, a four-year-old company that creates expense reports for more than 200,000 small- and medium-sized businesses and that Wednesday began offering Bitcoin to lower costs of international transactions.
Expensify hopes Bitcoin will help businesses deal with a common problem: banking regulations that make direct payments impractical for companies reimbursing workers in foreign countries. Tony Vakula, Expensify’s vice president of core engineering, says Expensify customers have typically used PayPal for international transactions, but the processing fees commonly stirred complaints.
Enter Bitcoin, which can be transferred instantaneously, at no charge, among accounts all over the world. It’s far too soon to say whether Bitcoin will prove popular with Expensify’s customers—or even how many of Expensify’s customers will know what Bitcoin is. At the moment, Bitcoin might not be accepted widely enough to support a population of workers who want to be paid in virtual currency—even if it saves them a fee.
Still, it’s noteworthy that the currency is finding relevance beyond Internet subcultures as a way to better serve Main Street. “We’re basically trying to help solve a business problem with it,” says Vakula.