November 20, 2014
SpectroCoin is now allowing its customers to convert bitcoin into cash in 25 countries across Europe and Central Asia.
The announcement is the latest from the UK and Lithuania-based bitcoin services provider, which added merchant processing to its existing brokerage and wallet offerings in August.
Speaking to CoinDesk, SpectroCoin CEO Vytautas Karalevičius compared his company’s newest service to traditional remittance offerings, emphasizing that his company intends to make extending services to the underbanked in its region a core focus.
Mantas Mockevičius, the company’s chief compliance officer, explained that SpectroCoin feels its latest offering solves an immediate market need in many of the company’s target areas.
“In some countries, they don’t need it much, but in Russia, Kazakhstan, Kyrgyzstan, Belarus, Armenia and lots and lots of countries, it’s a very useful service because there are lots of unbanked people there, and banking infrastructure is not so developed as, say, in Europe. So a person can get funds very easy. He can actually use bitcoin as a remittance.”
In addition to those countries, bitcoin-to-cash withdrawals are now available in nations such as Bulgaria, Greece, Hungary, Poland, Portugal and Spain, along with Switzerland, Turkey and Ukraine.
SpectroCoin charges a flat 4.5% fee for bitcoin-to-cash conversions, with a minimum fee of 3.7 (roughly 0.0123 BTC).
Cash withdrawal options
Mockevičius suggested that while SpectroCoin’s bitcoin-to-cash withdrawals are not cheap when compared to bitcoin transactions, they will likely find an audience with consumers in parts of the world where moving money still costs a premium.
“As a user, I get bitcoins from the person abroad. I convert it to cash and order the withdrawal in my country. I think it’s a very useful service for people without bank accounts,” he said.
Mockevičius illustrated how users can convert their bitcoins to euros on SpectroCoin, before entering the amount of fiat currency they want to withdraw, as well as their place of residence.
SpectroCoin, in turn, displays the end total the user will receive, minus the fee.
The user can then withdraw the cash at one of the company’s partnering banks, financial institutions or post offices. In some markets, the company has direct agreements with its partners, while in others it uses third parties, Mockevičius explained.
He estimated that it may take users up to five days to receive funds, as the firm’s partners must post a paper slip to the user, which must be taken to an institution to exchange for cash.
Emphasis on speed
Mockevičius also sought to stress that while its bitcoin-to-cash service may be slow, its main bitcoin wallet and brokerage services still put an emphasis on quick delivery.
“We are a bit more expensive than other services that work through bank wire, but we are much faster,” Mockevičius explained. “So, if the user needs the bitcoins the same day, we can very easily provide that service. This is our target market, clients who need speed. Selling bitcoin and withdrawing to cash takes time, so it’s a slightly different model.”
Still, he added, SpectroCoin is working to improve all of its services as competition in the European market has heated up following the entrance of US bitcoin heavyweights BitPay and Coinbase.
SpectroCoin has also faced criticism from some market participants for an allegedly anti-competitive market strategy and security issues. However, the company told CoinDesk that any such claims are “comments without any evidence”.