A bitcoin startup with enterprise ambitions: Bitnet

The majority of startups I meet with are run by young, over-enthusiastic twenty-somethings. They pile in their hopes and dreams to become the next Zuckerberg - it could end in a successful exit, but chances are it will end in failure. 

Bitnet is a startup that takes a mature approach towards the world of cryptocurrency. Launched in January 2014, this Belfast and San Francisco-based payments processor is packed with ex-Visa and CyberSource employees.

It doesn’t cater to small businesses (‘mom and pop stores’) but instead has its sights set on multinational companies and retail giants. 

Bitnet’s biggest competitor and largest payment processor in the market, BitPay, recently signed Microsoft as a client, so it was a particularly interesting time to meet Bitnet’s VP of solutions strategy Dr. Akif Khan. 

"[Regarding Microsoft’s partnership with BitPay] We’re glad that the industry is getting more exposure and more people are talking about digital currencies, it’s better for the industry as a whole," says Khan.

But what makes Bitnet different? 

“I’m wary of criticising the competition - but I will say that our team is the same one that built the Visa and Cybersource products. We have a very good understanding of creating a secure, reliable and distributed platform. 

“Our team has built some of the highest volume processing payment gateways that already exist in the world.”

In October Bitnet raised $14.5 million in series A funding including cash from Rakuten, the largest e-commerce site in Japan and one of the world’s largest by sales. Rakuten is yet to deploy Bitnet’s platform but it seems only logical that they will. 

With the recent slump and volatility of bitcoin, critics have voiced concerns over its legitimacy as a viable currency - Khan admits a large portion of his time talking to clients is spent educating them on bitcoin. 

“Every day of my working life I am battling the stigma around bitcoin,” he claims.

“I have meetings with retailers and merchants - a large portion of the meeting is teaching people about bitcoin - talking about organised crime, brand perception, the MT. Gox failure, the dark web - it’s an uphill battle.”

When those initial conversations are over and trust is instilled, Khan can begin explaining the benefits of bitcoin and Bitnet.

Working as a startup, having a small team and chain of command affords the ability to quickly change business direction. The ability to ‘pivot’ the product or the target audience can mean the difference between a successful startup and a complete failure. 

“At the moment we support bitcoin but if our customers want to use other currencies our platform is agnostic. We’ll support other cryptocurrencies if needs be”

In November Bitnet partnered with UK firm Sphonic to provide global AML transaction monitoring and KYC/KYB services.

“We need to make sure that the merchants we’re dealing with are good merchants so there’s no opportunity for money laundering…we need those checks to satisfy our partners but also to satisfy ourselves that we run a good business.”

“The partnership with Sphonic also enables us to hit the ground running with a fully automated compliance checking service from day one,” adds Khan.

While the bitcoin roller-coaster goes through its ups and downs - it’s those who are the best prepared, the most firmly strapped in, who will come out unscathed - there’s still a long way to go before this story pans out but Bitnet looks confident and ready.