Transferring bitcoins is a fairly easy process, but when it comes to accepting them for commerce, it is a bit more difficult. Like any payment form, accepting bitcoins means firms need a solution that accounts for connecting the buyer with their purchase, integrates with existing back office commerce software, and summarizes payments. Servicing this field are a growing list of firms such as Bitpay, Coinbase, and GoCoin who provide solutions for online merchants to accept payment in bitcoins.
Joining the existing list of payment processing providers is Polycoin. Similar to other payment processing firms, Polycoin offers online merchants the ability to accept bitcoins. However, to differentiate themselves, Polycoin is introducing the ability of two sided transactions for businesses. Specifically being targeted towards online financial brokers and eGaming sites, the two sided feature provides an integrated solution for merchants to both receive deposits and issue withdrawals in bitcoins.
Learning more about the offering, Digital Currency Magnates spoke with Alfred Shaffir, Co-Founder and CEO, Polycoin. According to Shaffir, he believes that there is huge opportunity for firms to begin to accept bitcoins and other digital currencies as the new form of money is becoming more widely acceptable. As a result, accepting the currency provides access to new customers that may not have been interested in the firm in the past.
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Speaking about their product, Shaffir explained that they are coming to market with two main advantages compared to other offerings; the above mentioned two sided transactions, as well as technology to deal with the anonymity of bitcoins. In regard to the latter, Shaffir described situations where a broker may be receiving a deposit from a client in bitcoins which gets converted by Polycoin into the customer’s fiat based account. In situations like these, brokers may face anti-money laundering (AML) and ‘know your customer’ (KYC) requirements which need to be adapted for the receiving of pseudo-anonymous digital currencies. The need payment identify verification doesn’t only exist for digital currencies, as it is can arise with other forms of payments, such as where a customer funds an account using a bank or credit card issued to one name and address, and subsequently tries to withdraw funds to a different destination.
With bitcoins, Shaffir mentioned that the anonymity of the sending address of the currency creates a situation where it is difficult to identify the source of the transaction. For financial firm’s accepting client funds and KYC and AML rules, identifying sources of funds becomes an important part of meeting their regulatory requirements. As such, to provide a solution, Shaffir explained that Polycoin uses a central algorithm that “checks the transactions for suspicious behavior and cross references the data with other procedures that we run to enhance the validity of the information collected and relayed to the operator”. The result are reports that regulated brokers can use to assist in complying with their KYC and AML requirements when handling bitcoins. On this, Shaffir stated that the firm is currently in discussions with several firms and regulatory bodies to establish which information is necessary to meet their needs.
Returning back to Polycoin’s core payment processing offering, although merchants can conduct two sided transactions with bitcoins, Shaffir explained that merchants aren’t exposed to volatility in digital currency prices. Upon receiving a bitcoin deposit, funds are exchanged into dollar’s or euros which are deposited into a customer’s account. Similarly, to process a withdrawal, the merchant transfers fiat to Polycoin on behalf of their customer. Polycoin than makes the conversion authorizes the transfer of bitcoins to the account holder.
Speaking about the future, Shaffir explained that their offering is currently limited to bitcoin transactions, but that their technology was created to be able to integrate any digital currency in the future. In regards to other sectors, Shaffir mentioned that Polycoin plans on focusing in areas where their two sided transaction solutions provides value to online businesses, but is open to working with other types of firms in need of services to accept bitcoin payments.