Circle opens doors to the public with free wallet/payment solution

Circle has just opened its doors to its long-awaited offering, a wallet/payment solution. Any user can now create an account

Circle has just opened its doors to its long-awaited offering, a wallet/payment solution. Any user can now create an account on its website, with mobile-based solutions to arrive at a later date.

The exact offering it had in store for the market had been a mystery until May, when it unveiled the solution at Bitcoin 2014 in Amsterdam. Soon after, the company held an invite-only trial period.

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The venture has raised $25 million in funding to date, making it one of the best funded bitcoin companies.

At face value, the offering doesn’t seem any different from the myriad of other wallet services around. It has been suggested that the simple, clean interface may be refreshing for users tired of the obscure world of bitcoin addresses and transaction ID’s. Amounts are expressed in dollars, and the general message is that the solution gives you better control of your money, with a lesser emphasis on the Bitcoin technology behind it. Also, seven countries are supported.

The solution is said to be fully insured. CEO Jeremy Allaire reportedly told the Guardian:

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“They can store as much as they want, there’s no fees, and it includes all the offline storage we provide as well as full insurance on all deposits.”

There had been much uproar in the community last month when it was discovered that Circle’s fine print appeared to state that a maximum of $100 is covered. The user agreement has since updated its wording, specifying the $100 maximum for punitive damages. A separate section on insurance indeed states, “In the event that any bitcoin held in your account are lost or stolen as a result of a direct breach of Circle’s digital or physical storage facilities, such bitcoin reserves are fully insured, subject to the terms and conditions of Circle’s insurance policy with Marsh Insurance.”

The identity of their insurance provider had also been a mystery. The company sought to clarify this point in its blog, identifying Marsh as the broker and noting how it is becoming a “market maker” in this relatively new industry of bitcoin insurance.

Another potential point of contention may be the following statement on the website: “Never let money keep you waiting. Sending digital currency is instant, like email or text messaging. We even provide access to a portion of your deposits for bitcoin instantly — not days later.” Note that only “a portion” is made available instantly, which may or may not be better than many fiat usage scenarios. It is definitely a step back from several other digital currency offerings that pose no such limitations.

One can imagine that the operating costs of customer support and insurance premiums will add up. The next question becomes how the solution can be monetized without turning away users. Intuitively, potential revenue streams include premium/VIP service or merchant integration.

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