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>The properties of bitcoin are completely irrelevant to the mechanics of the card. On what planet? If the price fluctuates the way bitcoin has been, Wavecrest

by tw04 9y ago

>The properties of bitcoin are completely irrelevant to the mechanics of the card. On what planet? If the price fluctuates the way bitcoin has been, Wavecrest could literally be bankrupt before Visa even knew about it to pause any further transactions. At which point VISA is responsible, you think they're going to risk billions of dollars on a currency that is clearly a bubble at this point?

jstanley 9y ago
No, that is wrong. 1.) Wavecrest assumes absolutely no exchange rate risk as they don't deal with the BTC, a company like Xapo does 2.) Xapo make a very big margin on the bitcoin sale 3.) The companies that perform the sale at topup time rather than purchase time work out how many GBPs you get after they've sold your BTC, so they assume no risk at all, and the companies like Xapo that perform the sale at purchase time structure their operations to minimise the risk of losing money, and they're aware of the risk, and they're far from the first company in the history of the world whose operations require them to adequately manage risk.
- altern8tif 9y ago
  What is Wavecrest's business model as a card issuer then? [Genuine question]
  - jstanley 9y ago
    My guess is they take a transaction fee in the same way Visa do.
    - theptip 9y ago
      They get a cut of the ~2% processing fee that Visa charges the vendor, and they charge some additional fees to the payor as well. The details are very dependent on commercial negotiations (i.e. how much volume the payor is bringing, etc).
- mannykannot 9y ago
  Is Wavecrest not exposed to the risk that Xapo will not be able to fulfill its obligations, for example if an orderly market in bitcoin-USD conversions breaks down?
  - theptip 9y ago
    No, Wavecrest has a stored value account which their payors must top up ahead of time in order to be able to fund payments. This is identical to Paypal, or any other payment rail in the industry. Payment companies don't in general make loans to their customers (though anything is negotiable in principle). Source: have integrated with Wavecrest.

by tw04 9y ago

jstanley 9y ago

No, that is wrong. 1.) Wavecrest assumes absolutely no exchange rate risk as they don't deal with the BTC, a company like Xapo does 2.) Xapo make a very big margin on the bitcoin sale 3.) The companies that perform the sale at topup time rather than purchase time work out how many GBPs you get after they've sold your BTC, so they assume no risk at all, and the companies like Xapo that perform the sale at purchase time structure their operations to minimise the risk of losing money, and they're aware of the risk, and they're far from the first company in the history of the world whose operations require them to adequately manage risk.

altern8tif 9y ago
What is Wavecrest's business model as a card issuer then? [Genuine question]
- jstanley 9y ago
  My guess is they take a transaction fee in the same way Visa do.
  - theptip 9y ago
    They get a cut of the ~2% processing fee that Visa charges the vendor, and they charge some additional fees to the payor as well. The details are very dependent on commercial negotiations (i.e. how much volume the payor is bringing, etc).
mannykannot 9y ago
Is Wavecrest not exposed to the risk that Xapo will not be able to fulfill its obligations, for example if an orderly market in bitcoin-USD conversions breaks down?
- theptip 9y ago
  No, Wavecrest has a stored value account which their payors must top up ahead of time in order to be able to fund payments. This is identical to Paypal, or any other payment rail in the industry. Payment companies don't in general make loans to their customers (though anything is negotiable in principle). Source: have integrated with Wavecrest.