Visa veterans raise $14.5m for bitcoin processing platform

Visa veterans raise $14.5m for bitcoin processing platform

Bitnet, a bitcoin payments processor targeting large merchants that was set up earlier this year by a gaggle of Visa and CyberSource veterans, has raised $14.5 million in a series a funding round led by Highland Capital Partners.

The round was also joined by Japanese e-commerce giant Rakuten, Webb Investment Network, Bitcoin Opportunity Corp, Stephens Investment Management, Commerce Ventures and Buchanan Capital Management. Peter Bell from Highland Capital Partners joins the Bitnet board.

With offices in San Francisco and Belfast, Bitnet was set up by CEO John McDonnell CTO Stephen Mc Namara, who both held senior positions at CyberSource, the online payment and security outfit acquired by Visa for $2 billion in 2010. The pair brought more than two dozen Visa and CyberSource veterans with them to the new venture as they seek to disrupt the traditional payments landscape they were once part of.

McDonnell and Mc Namara argue that in a world with credit card transaction fees hitting merchants’ bottom lines and cross-border fees creating barriers to commerce, distributed trust systems like bitcoin have huge potential

Bitnet hopes to cash in by offering merchants guaranteed payment, instant global reach with no cross-border fees, no price volatility, and no fraud, risk or chargebacks, all for a transaction fee of under once per cent.

The platform includes RESTful hypermedia APIs and SDKs, an easy-to-implement hosted Checkout product and prebuilt integrations to third party software systems. Advanced analytics with programmatic access to reports designed to help automate merchant reconciliation within accounting and ERP systems are also being promised.

The startup is betting on its team's background at Visa to entice large firms dealing with a high volume of payment transactions and complex back-end financial applications that need a bitcoin payment platform that they can trust and depend on.

It says that it is already working with large retailers, as well as financial institutions, payment service providers, international trade organisations and airlines. The new money will be used to build up teams for sales, marketing and customer support as well as to set up offices in continental Europe and Asia.

Says McDonnell: “Many of these bigger companies have looked at existing solutions and have remained on the sidelines - until now. With Bitnet, we’re building the integrations, systems and technologies that multi-national retailers and travel companies need in order to accept bitcoin."

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