California-based startup called Shift Payments plans to issue a new debit card combining loyalty points, fiat money and cryptocurrency.
The firm’s current card allows making payments only with ripple and bitcoin. According to TechCrunch, 100 participants are now testing the card in San Francisco and other parts of the world.
Shift was founded in March 2014 by Meg Nakamura, Greg Kidd and Eugene Otto and is aimed at bringing next-generation payment system to the market. Each member of the team has a great experience in telecommunications, payments and regulation.
Nakamura, graduate from Princeton university, met Kidd when they worked at Promontory, a consulting company focused on working with financial services companies and advised on compliance, strategic and risk management.
Kidd also has a background in advisory and consulting work for startups, among others Twitter and Square. Besides, he worked as a senior analyst for the Federal Reserve Board.
Given the experience in data aggregation and messaging projects, the team noted that the market of mobile messaging was over-saturated and took a decision to work with digital payments.
The startup backed by Y-combinator started to develop debit card last year. In November 2013, the team created a card enabling users to spend their money from ripple account. Then Shift added bitcoin via payment processor Coinbase.
In future, the company hopes to integrate loyalty points and regular bank accounts. The card will still be supported by mobile applications and continue using Ripple protocol for settlement.
The new debit cards will be supported by leading card network and a payment processor, which was not disclosed. Shift co-founder Meg Nakamura told that the company has struggled a lot to receive support from banks in the US. He said: “We learned very quickly that no bank here in the US is willing to take that leap and actually support something like this. They were just too nervous and no one was willing to take that reputational risk.”
Nakamura also said it will be a long process for US banks to embrace the virtual currency sector. She added that before making decisions, banks are monitoring recent developments on the regulatory side, although they are really excited about bitcoin and its potential.
Notably, not only debit card producers experience such problems. In May, at a conference held in Chicago, representatives from several bitcoin businesses admitted that current regulatory environment affected their companies.
Certain companies have recently announced bitcoin debit cards, including Xapo, CoinJelly, ANX and Diamond Circle.