What is it?
Essentially Purse.IO is a solution to two main problems. First, it solves the problem of purchasing items at Amazon with Bitcoin. Since the retail giant has not yet implemented Bitcoin into their payment method Purse.IO is creating a platform on top of Amazon. The next problem is buying BTC with credit card. Sure you can go to coinbase, but that requires time to setup, time to verify, and also many banks now are starting to oppose any sort of Bitcoin related transactions or transfers. Sure there is BitPay who already processed over $100 Million in Bitcoin transactions but Purse.IO aims to provide a unique service that specifically integrates Amazon.
The company is marketing its service to people who would like to purchase items from Amazon with Bitcoins and for people who would like to buy Bitcoins with their credit card. By matching these two markets, Purse.io is able to offer Bitcoin purchases at Amazon. Not only that, but the purchases are powered by a buyer’s “discount” which increases the incentive to use the service. The discount is another way of setting a fee for the transaction where the currency is being converted form CC to BTC and visa versa.
As Andrew Lee, co-founder of Purse.io said:
“I think people that try it and realize they just saved 25% on Amazon are excited about that possibility. For the first time, they’ve been able to do something useful with bitcoin [rather than just buy and hold].”
How it works
Here is how it works, there are two options to choose from once you sign up. You can either spend bitcoin or buy bitcoin.
If you decide you have some bitcoins and you want to purchase some Amazon items you can click the Spend BTC button which will redirect you to another page where you would create a wishlist, add the URL of the item, select your shipping preference and submit the order. The page looks like this:
When you submit your order it gets added to the list of available orders where people who want to convert CC -> BTC can buy you the item from their Amazon account and ship the item to the provided address that the buyer provides.
The other option, is if you want to buy BTC with Credit Card you press Buy BTC and that takes you to a page which lists all the available offers.
The good news is that the site has a profound user base and there are a lot of offers available. Once you decide on an offer you would the accept it. Next comes the interesting part, a popup window comes up with a timer prompting you to complete the purchase on amazon add the order number and hit submit. Then once the item has been shipped and received by the buyer he notifies Purse.io at which point the Bitcoins are released from escrow.
As the second co-founder of the company, Kent Liu explained, “It’s kind of like an exchange, but with that Amazon layer”.
Does Amazon care?
What would Purse.IO do if Amazon shut them down, after all they are relying on Amazon to make a profit. The founders seem to have thought about that, but believe that they are simply providing a service that is in demand. Lee said: “We think we are helping Amazon, they don’t want to take bitcoin now. They are not ready for it”
According to Purse.io amazon’s marketplace strategy which includes all of its third party sellers is weak. If creates a sort of complexity which other retailers who do accept Bitcoin like TigerDirect and Overstock do not have to deal with. Maybe Amazon made a mistake allowing third party sellers in their marketplace, after all there is Ebay for that? Maybe Amazon is caught in between two ends of the spectrum where one is a full blown retailer/ private reseller like Overstock and TigerDirect, or a marketplace which promotes 3rd party sellers like Ebay. Amazon has already tried to make certain advances toward Bitcoin but they have been very subtle and involved issuing patents to try and take advantage of the crypto market.
Nevertheless, it seems that the founders and co-founders of Purse.IO feel confident about their service and it’s demand:
“We’re generating that userbase as long as this Amazon window is open. At the same time, we’re continuing to develop new services we can offer to these users.”