Goldman Sachs and Baidu-backed blockchain startup Circle have launched an international online money transfer service. The new offering will allow American and European consumers to send funds back and forth instantly and for free. The Boston-based firm says the service wants to tear down national borders when it comes to moving funds internationally.
More broadly, Circle’s fee-free international money transfer service comes as part of the rise of FinTech to remove the friction — and costs — associated with using mainstream banking and financial services.
The new international money transfer service is built on the Ethereum blockchain (and digital currency cousin of bitcoin) and will allow payments to flow between U.S. dollars, British pounds and euros via mobile device without foreign exchange mark-ups or additional fees.
“When’s the last time you sent a ‘cross-border email’?” asked Circle’s chief executive officer and founder, Jeremy Allaire. “The idea of cross-border payments is going to completely go away…Our vision is for there to be no distinction between international and domestic payments.”
In 2016 Circle processed over $1 billion in transactions and has seen its customer base increase 10-fold over the last year. The firm does not make money on its payments services, which it believes consumers expect to receive for free.
“We don’t think there is any money to be made in payments anymore,” said Allaire. “The entire business model of extracting a toll or having time delays around the movement of value is going away completely.”
The firm is instead funded by crypto-currency trading on exchanges and “over the counter” — a profitable line of work right now, since bitcoin is at record high prices (so high, in fact, that even experts are wondering if bubbly thinking is in play).
Last month alone, Circle traded over $800 million in digital assets, it said in a statement.