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Saturday, December 16, 2017

Opinion > U Account

A bitcoin debit card?

Alex Letts, founder and chief unbanking officer of U | 7:56 Wednesday 29th November 2017

I got a call from a trusted friend who has been a wonderful source of advice and inspiration to me in building U.

He is London-based, progressive, innovative and fearless. He also knows a thing or two about creating brands, with a globally successful one of his own.

“Have you thought about doing a bitcoin debit card?”

I explained that I had already given it some thought, but for three reasons I’d parked it:

1. Bitcoin has unfortunate associations with, ahem, somewhat irregular financial activity. Our ability to move e-money within the banking infrastructure might attract unwanted types if we advertised a bitcoin cash card.

2. Our business plan calls for focus on providing a first-class account, with a first-class service for those 15 million people we believe to be incompatible with the bank model. If we do that, we will be very successful. But it is both an opportunity and a daily challenge. Focusing on simplicity is key.

3. Those unsuited to the banks – or underserved by them – probably don’t care about spending bitcoin. They care about putting food on the table at the end of the month.

He pressed on: “Think how you’ll feel if one of the other non-banks does it?”

Violently green with envy was the only possible human reaction I could imagine.

On reflection, I am still drawn to bitcoin like a fintech moth to the media light. It would be very cool. The digital evangelists may even credit us with being the disruptive force that we are. Hell, they may even add us to the market infographics that they put all their chums on. I may even be vomit-inducingly “honoured and humbled” (or not) to appear on a power list of UK fintech companies. The temptations are legion.

But the reality is that there comes a moment when a great tactic does not and should not override a good strategy. Our users don’t care about bitcoin any more than they care about open banking. Most people in the UK think blockchain is a supermarket product for clearing your sink. Open banking will be great for the industry, sometime. Indeed, knowing where I bought my last latte in London may be useful on some dimension, but for the normal UK citizen living a life where every penny counts, it doesn’t really register. (Don’t get me wrong: the ideas and innovations that drive our banking industry are important, but more so right now for the hipsters in their hi-viz lifestyles.)

But actually, for pure invention and disruption, how about this? Take half the population – those who the banks don’t want to serve – and offer them a better service and a better product than the banks. Create an alternative to banks. Now that’s disruption.

So, upon further reflection, my answer regarding a bitcoin debit card for us up north remains boringly south London: “You’re having a larf, mate.”

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