California-based bitcoin merchant payment gateway and point-of-sale (POS) solution provider Coinzone launched its private beta earlier this week, completing an early and necessary step as it looks to refine its product ahead of its forthcoming launch.
With the news, Coinzone is entering an already burgeoning sector of the digital currency market — one featuring major players such as BitPay, Coinbase and GoCoin. However, Coinzone is optimistic that it can find a competitive advantage in Europe and developing markets, areas that it says are just starting to become a focal point for its peers.
Speaking to CoinDesk, CEO Manuel Heilmann indicated that Coinzone believes it is arriving on the market at the “perfect time”, and that it has the right tools to win market share. The company is aiming to win users with a focus on usability and customization that eschews a one-size-fits-all approach.
Heilmann told CoinDesk Coinzone is now testing its solution with the help of end-users in select markets, and that it has already found feedback to support that its tailored approach to enabling e-commerce and POS bitcoin sales will be effective, explaining:
“User behaviour in every market is different. Not everyone speaks English, not everyone has the same needs in terms of customer experience.”
Further, Heilmann suggested that his team has the right background to attack the problem, as Coinzone’s employees come from the payments and e-commerce industry. Heilmann himself, according to his LinkedIn profile, is a veteran of e-commerce site provider Digital River.
This experience, he says, will allow Coinzone to ensure the checkout process with bitcoin becomes “as smooth and seamless as possible” for users in key markets, though upon launch Coinzone will be available to merchants around the globe.
Eyes on Europe
Heilmann asserts that, despite the conception that European markets are flush with sophisticated financial products, credit-card penetration in some markets remains low.
A German native, Heilmann argues that this means bitcoin could become a real viable alternative in areas where there is still a distrust of traditional plastic options, stating:
“A lot of merchants have bad experiences with credit cards because of chargebacks, high fees or they got shut down by payment processing companies, so there’s a resentment in some markets to pay with a credit card or accept credit card payments. That’s going to be the focus of Coinzone, to provide solutions to those markets.”
In contrast, Heilmann painted the US market as one where bitcoin, while an advantageous option for tech-minded consumers and libertarians, isn’t a solution that solves real market problems.
Custom solutions
While Heilmann didn’t reveal too much about how Coinzone plans to alter its POS and online checkout products at this early stage, he did share some early findings that he considered surprising.
For example, he noted that seemingly minor details – like what the consumer sees on screen during the online shopping process – can have a big impact on conversion. He noted that the presence of certain e-commerce trust seals, like the one offered by Verisign, can impact buying:
“It seems like a minor detail, but it would impact the conversion rate in this specific market.”
Risk control
Coinzone also aims to give merchants control over the POS experience it provides by allowing them to adjust the number of confirmations needed to complete a sale.
As noted by Forbes author Kashmir Hill, this can prove to be a particular large pain point for both consumers and merchants.
Heilmann explained how Coinzone, in part, aims to mitigate this issue, although he acknowledged it’s something the larger community must find a solution to:
“The merchant will have the ability to decide whether they want to take the risk and relieve the purchase the delivery after one, zero confirmation or whether he wants to wait for three or six confirmations. For POS, that’s a showstopper.”
No competitors
Despite its novel plan, Coinzone will have competition in Europe, particularly from Georgia-based merchant processor BitPay, which recently told CoinDesk roughly 30% of its business now comes from the market.
However, Heilmann believes that the bitcoin space is too small at this point for his company to be competing against any other bitcoin-specific solutions, and as such, he isn’t concerned about other market alternatives.
He concluded: “[Becoming competitors] will take a long time. The community is collaborating and laying the foundation for future growth, I think that’s the thing to do at this point.”
Image via Coinzone