Instabill has announced that it will offer merchant and banking accounts to companies working in the Isle of Man’s digital currency industry.
The news comes just one day after Capital Treasury Services, a company that connects digital currency companies to banks on the Isle of Man, moved broadly to close the accounts of clients dealing in cryptocurrency, under pressure from partner banks.
Speaking to CoinDesk, Instabill founder Jason Field said his firm will be able to offer stable banking relationships to digital currency firms because it works with banks in various jurisdictions.
Field told CoinDesk:
“We work with banks located in Europe, Asia and North America. We are not just working with one acquiring bank or operating out of one jurisdiction.”
Field would not say which banks his firm works with, but did say he has discussed the possibility of opening accounts for bitcoin businesses with Instabill’s current banking providers.
“We have had multiple discussions with our acquiring banks, they understand the business and they are interested in entering and facilitating processing solutions,” he said.
The announcement coincides with Field’s visit to the Crypto Valley Summit, a two-day confab on the Isle of Man that was meant to call attention to the Crown dependancy’s favorable policies to the industry as well as the wide support from the bitcoin industry the island has received.
Startup launch scuppered
Despite the emergence of a new banking option, the conference threatened to be overshadowed by the news that CTS was cutting off banking facilities for the cryptocurrency firms currently based on the island.
One startup that recently incorporated on the island with an account with CTS is AltXE, which aims to become a payment processor for merchants along the lines of BitPay and Coinbase. Its co-founders Chris Wood and James Carter, had planned to launch the service at the conference, but hours before it was due to start, they were notified by CTS that that it would be closing bitcoin-related accounts in two weeks.
“The plan was to tell people about [the startup] today. But CTS pulled out and it has really been disappointing. We spent [eight months] talking to various jurisdictions.”
Carter and Wood, based in Manchester, say they will be exploring the option of using Instabill now that their business can’t proceed with CTS. They will delay their startup’s launch, as well.
Terms of service
Instabill is a New Hampshire-based company that offers merchant account services to high-risk companies. This includes setting up credit card processing facilities for its customers, including debt collectors, dating websites and travel agencies.
A representative from Instabill told CoinDesk that the price of its service varies by industry, but that there’s an initial $499 set-up fee due on approval for new accounts. To accept payments, digital currency merchants would need to pay a 3%–4% discount rate, plus approximately 35 cents per transaction.
Instabill allows merchants to accept major credit cards including China Union Pay, MasterCard and Visa, and its payment gateway supports 160 currencies.
Additionally, 10% of payment processing revenues are placed in a rolling reserve fund for the first six months. Customers then receive this 10% back each month beginning on month seven of the service. Instabill indicates that, while not a feature of many US banks, this money is necessary to cover contingencies, such as chargebacks and refunds.
Details aside, Field says digital currency firms on the island are rushing to find out what he can offer them:
“We’ve already had half a dozen companies approach us in the last half hour. They’re all digital currency businesses.”
Correction: A previous version of this article stated that digital currency merchants would need to pay 6% discount rate, plus 50 cents per transaction in Instabill service fees.
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