The rise of mobile wallets, peer-to-peer payment, micro lending and personal finance applications has made the technology sector a major competitor to the banking industry. However, another form of payment, in its brief history, has stirred up a considerable amount of controversy by allowing individuals and businesses to operate independently of banks: Cryptocurrencies.
A cryptocurrency is a digital currency wherein encryption techniques are utilized to regulate the generation of units of currency and verify the transfer of funds.The most commonly known cryptocurrency is bitcoin. While use of bitcoins for extravagant purchases like yachts, Teslas ($TSLA) or private planes have put bitcoin in headlines, bitcoin has slowly become adopted by major businesses like Subway and Amazon.com ($AMZN).
A peer-to-peer payment system with low processing fees sounds like a win-win; however, bitcoin is decentralized, having no governing body overseeing or verifying transactions. In order to get other major retailers and conventional banks on board to work directly with bitcoin, operators of cryptocurrency-based services must obtain risk management capabilities that offer users an efficient and convenient way to get funds in and out of cryptocurrency environments. Vogogo Inc. ($VGO:CA), a software development company, offers unique risk management and processing capabilities that may get operators of cryptocurrency businesses the support of conventional banks.
Vogogo announced that their risk management and payment processing services will be provided, starting immediately, to European merchant services provider Easy Payment Gateway (EPG). EPG is an online gateway for multiple payment solutions and credit card acquirers, and their deal with Vogogo is estimated to generate $675,000 per quarter of revenue entering 2016.
Upon registration, Vogogo offers access to hundreds of industry leading verification tools. These tools function in several key areas, including fraud mitigation, investigation of fraud, identification of fraud trends, immediate targeting of fraudsters. It also features services like:
● Know Your Customer (KYC)- Identifies and analyzes users at account creation and every transaction
● Merchant Underwriting -Provides risk management solutions specifically for B2B relationships
● Compliance Reporting -Allows clients to easily comply with world regulations
● Routing Transactions -Collects and validates users in real time, then analyzes the authenticity of the transaction before being submitting for processing
● Convenient Payment Processing -Provides advanced bank verification, activity intelligence and additional verification features during a transaction
Beginning immediately, at least 5 merchants are going live on the Vogogo platform, with an estimated 25,000 transactions per month per merchant. By the end of this year, the number of merchants is expected to double to 10 merchants, yielding 250,000 monthly transactions.
Vogogo also has several other conventional merchant processors in the pipeline that are of similar size or larger, and a recent announcement made by the highest court in Europe may help continue to grow the company’s client list.
Major Ruling in Bitcoin’s Favor
The EU high court recently ruled that exchanging virtual currencies, like bitcoin, are tax-exempt in the same way as traditional cash. Furthermore, China, the largest market for bitcoin transactions, is starting to relax restrictions on its use.
Several Canadian cryptocurrency exchange clients, such as BitStamp, Kraken, and Coinbase, are expected to begin using Vogogo in the much larger US and European markets over the next few months. Not only are bitcoin exchanges expected to increase in volume due to a decrease in cost for the customer, the EU has legitimize bitcoin as a currency.
Just last year, the European Banking Authority warned that banks shouldn’t buy, hold or sell virtual currencies until safeguards were developed. Now, tax-free bitcoin exchanges and the existence of Vogogo’s risk management technologies can help increase both consumer confidence and the cryptocurrency environment. Bitcoin and other virtual currencies are aimed to have a bigger part in the financial services system. Vogogo will be there to help move the future of money forward.
For more information about Vogogo, visit www.vogogo.com.
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