Bitcoin remittance company Abra receives strategic investment from American Express

In today's world, it takes two to three days for international bank transfers, and even seemingly instant payment apps like Venmo are not. Bitcoin's technology allows remittances to be completed instantly and securely between individuals.

According to Forbes, on Wednesday, Bitcoin remittance company Abra announced that its application will soon be available to all registered users in the United States and the Philippines, and merchants can also use the services provided by Abra to accept electronic cash from consumers. In addition, Abra announced that it had added strategic investments from美国运通and拉坦·塔塔(Honorary Chairman of India's Tata Group, an Indian capital giant who controls 96 companies) in its $12 million Series A financing in September this year. The participation of American Express also marks the addition of a traditional financial giant to invest in Bitcoin startups. Previously, the institutions that have invested also include Nasdaq, Visa, Goldman Sachs and the New York Stock Exchange.

“As people and businesses become more globalized, we need more convenient and affordable ways to move money, and we believe blockchain can play an important role in the growth of remittances and commerce, especially in emerging markets,” said Harshul Sanghi, managing partner at American Express Ventures, using the term “blockchain” instead of bitcoin technology.

Abra App

The app allows users to store digital currency on their phones, send it to any phone number around the world through the Abra teller network or traditional bank routing, and convert the digital cash into cash. Because all the money is stored directly on the phone (fiat currency, not Bitcoin), Abra promises to never touch the money.

Let’s say user A wants to send $5 to a friend. All she needs is their phone number. On the back end, Abra creates an index that maps those phone numbers to public addresses on the Bitcoin blockchain. If the recipient doesn’t have Abra installed on their phone, they’ll get a text message reminding them to install it. Behind the scenes, the Bitcoin blockchain records the entire process of the sender sending $5 to the recipient, and once the transfer is complete, both parties’ apps will show the change in their account balances. (The app also needs to take into account the conversion of digital currency to fiat currency so that the value of the transfer is not affected by Bitcoin’s price fluctuations.)

If the recipient wants to convert the digital cash into paper cash, Abra will work with a network of tellers, including individuals who act as ATM machines and large retailers, who can act as tellers for the network. Barhydt said that in countries like the United States, consumers will prefer to use banks to withdraw cash.

However, in developing countries, many individuals and small convenience stores are more likely to become tellers. It is reported that tellers can set their own fee schedule, and Abra will charge an additional 0.25% fee for each transaction.

Abra's new merchant services feature allows any merchant to add the Abra merchant API to its web or mobile app to accept payments from customers (just enter your phone number to checkout and pay). Here, the payment functions exactly the same as cash. However, in the event of fraud, there will be no fraud protection provided by credit card payments, and the victim will need to negotiate directly with the merchant.

The company has already started signing up merchants and will be demoing their service this week at the Money2020 conference in Las Vegas. Abra also expects to launch its merchant API service later this quarter.

It is reported that other investors participating in Abra’s first round of financing include Arbor Ventures, First Round Capital, RRE Ventures, etc.

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Original article: http://www.forbes.com/sites/laurashin/2015/10/22/american-express-invests-in-bitcoin-venture-abra-which-announces-us-philippines-launch/
By Laura Shin
Compiled by: Satuoxi
Editor: Satuoxi
Source (translation): Babbitt Information