Media & Entertainment

Social payments startup Circle rolls into Europe


Image Credits:

It may have started as a Bitcoin wallet but veteran entrepreneur Jeremy Allaire’s fintech startup Circle has since shifted focus to social payments, launching an app in Q4 last year that lets users send U.S. dollars to settle IOUs between each other, with its pitch being it makes payments as easy as firing off an SMS (and perhaps cheaper, given there’s no fees involved for Circle users).

And while fiat currency payments are now evidently the focal point for its business (rather than Bitcoin payments), Circle does still offer the ability to feelessly pay people elsewhere in the world, in some 150 countries — and for that it needs to loop Bitcoin into the mix, turning dollar payments into BTCs deposited into the recipient’s Bitcoin wallet.

But Allaire prefers to talk now about the other, more fashionable ‘b’ word — blockchain — asserting that Circle is utilizing blockchain technology to “build a model for money that works over the open Internet”.

“We never thought of ourselves as a Bitcoin startup. The media certainly classified us that way because we were involved with the technology. From the day we founded the company three years ago we’ve focused on trying to build a new consumer finance company. And one that makes money work the way the Internet works,” he tells TechCrunch.

“We want… to connect the benefits of digital currency with the existing financial system. And the existing currencies that people use, day to day, the currencies they’re paid in, the currencies they pay people with etc, and connect that not just with blockchain technology but other major technical innovations that make doing what we do possible.”

“When people use the Circle product… you don’t see Bitcoins. It’s sort of underneath. The blockchain is a technology that allows us to not just build another closed payments system but actually build something that’s interoperable with the rest of the world,” he adds.

Today Circle is adding support for its second fiat currency — UK sterling — so it can now offer its users feeless cross-border payments between US dollars and UK pounds (or vice versa), as well as Bitcoin payments.

Cross border currency transfers might prove more of a compelling draw to pull users into Circle vs the core proposition of an app to settle cash debts with friends/acquaintances, given the typical complexity and expense involved in sending fiat money abroad via traditional banking routes. And the relative hassle of asking your friend to sign up to an app just to redeem that $10 you owe them… Indeed, some might say that sounds like a dick move. (Albeit Circle claims it’s made sending/receiving money in the non-user scenario super easy, with the money sending Circle user entering just the recipient’s phone number to send, and the non-user able to snap a photo of their debit card to be able to redeem what’s owed.)

But Circle is convinced that domestic personal and social payments will be its future bread and butter, with Allaire pointing to the massive success of China’s WeChat Pay and Alipay as examples of the huge potential it sees here. Although, unlike China’s WeChat for example, Circle is having to build its network from scratch — rather than leveraging an existing and highly popular messaging platform.

It is trumpeting having gained an E-Money Issuer license from the UK’s FCA, which also extends to operating in a third fiat currency (Euros), claiming it’s the first time the financial regulator has issued such a license to a consumer Internet firm for cross-border payments with blockchain technology.

Allaire and co-founder Sean Neville say Circle will be gradually rolling out support for Euro payments in some European Union markets this year, although they’re not specifying which ones yet. But will say they won’t be launching it in all Euro-using markets in one big bang. Circle is also not disclosing any user numbers at this nascent stage.

The process of obtaining the necessary licences and regulatory approval to operate in the US and Europe has taken some two years, according to Allaire — who is very complimentary about the UK government’s support for the adoption of digital currencies.

In the UK Circle’s banking partner is Barclays which is proving the local accounts and infrastructure support to enable it to offer users sterling payments.

“We need a commercial banking partner because we’re not authorized to store directly the local currency,” he explains. “So we need a banking partner that allows us to hold the local currency… and also gives us access to the infrastructure that’s needed to move the funds in and out of any existing UK customers’ bank account with Circle.”

Another change today is that Circle is dropping prior transaction and withdrawal limits for users, with Neville saying it now has enough confidence in its risk assessment tech for extending short-term credit to be able to lift the caps on how much users can send and receive.

The startup took in a $50 million round this time last year, from investors including Goldman Sachs and IDG Capital Partners, and the co-founders say they still have a “significant chunk” of the total capital they have raised ($75M) in the bank so aren’t looking to raise again yet.

Circle is not itself taking revenue at this point, given it’s not charging users fees for settling their payments. The grand vision, says Allaire, is that moving money around digitally should always be feeless, and instead a socially sticky, consumer friendly payment app with messaging smarts encourages consumers to shell out for other handy features — once they’ve been conditioned to rely on Circle for their core money-sending needs.

“We really do fundamentally believe that sending and receiving money, which is really just updating databases, is something that is free… We don’t really believe that’s a viable business model,” says Allaire. “There are other valuable things that financial services companies do — future products that we would like to build and explore — but the payments side of it is intended to always be free. Or as very very close to free as we can possibly get it.”

“[WeChat Pay and Alipay] in a really interesting way combined messaging, social graph, media sharing and payments in an integrated experience. And it took hold and got enormous scale in China over the past two or three years to the point where 500 million people are using it and it’s become a part of their daily life.”

“It’s personal and social payments. Friends, family, co-workers, it’s across the board. Any personal or social payment. All that’s mediated through WeChat Pay and Alipay now in China. That category of social payment app hasn’t really emerged in a big way in the West. There’s virtually no major players,” he adds. “The opportunity is wide open.”

That said, he names Venmo as one existing competitor in the U.S., but argues it has not managed to gain “anywhere near the scale you see with traditional Internet apps”.

Another rather more well-known name — Facebook — might well be able to gain such scale, and is already playing in the space, although Circle is evidently hoping to steal a march on Zuck & co by rolling out its rival social payments app faster.

“Facebook haven’t fully rolled out what they’re doing with payments in Messenger but definitely we would view that competitively,” he adds.

More TechCrunch

Another fintech startup, and its customers, has been gravely impacted by the implosion of banking-as-a-service startup Synapse. Copper Banking, a digital banking service aimed at teens, notified its customers on…

Teen fintech Copper had to emergency discontinue its banking, debit products

3D tools behemoth Autodesk has acquired Wonder Dynamics, a startup that let creators quickly and easily make complex characters and visual effects using AI-powered image analysis. The two companies have…

Autodesk acquires AI-powered VFX startup Wonder Dynamics

Farcaster, a blockchain-based social protocol founded by two Coinbase alumni, announced on Tuesday that it closed a $150 million fundraise. Led by Paradigm, the platform also raised money from a16z…

Farcaster, a crypto-based social network, raised $150M with just 80K daily users

Microsoft announced on Tuesday during its annual Build conference that it’s bringing “Windows Volumetric Apps” to Meta Quest headsets. The partnership will allow Microsoft to bring Windows 365 and local…

Microsoft’s new ‘Volumetric Apps’ for Quest headsets extend Windows apps into the 3D space

The spam reached Bluesky by first crossing over two other decentralized networks: Mastodon and Nostr.

The ‘vote Trump’ spam that hit Bluesky in May came from decentralized rival Nostr

Welcome to TechCrunch Fintech! This week, we’re looking at the continued fallout from Synapse’s bankruptcy, how Layer wants to disrupt SMB accounting, and much more! To get a roundup of…

There’s a real appetite for a fintech alternative to QuickBooks

The company is hoping to produce electricity at $13 per megawatt hour, which would be more than 50% cheaper than traditional onshore wind.

Bill Gates-backed wind startup AirLoom is raising $12M, filings reveal

Generative AI makes stuff up. It can be biased. Sometimes it spits out toxic text. So can it be “safe”? Rick Caccia, the CEO of WitnessAI, believes it can. “Securing…

WitnessAI is building guardrails for generative AI models

It’s not often that you hear about a seed round above $10 million. H, a startup based in Paris and previously known as Holistic AI, has announced a $220 million…

French AI startup H raises $220M seed round

Hey there, Series A to B startups with $35 million or less in funding — we’ve got an exciting opportunity that’s tailor-made for your growth journey! If you’re looking to…

Boost your startup’s growth with a ScaleUp package at TC Disrupt 2024

TikTok is pulling out all the stops to prevent its impending ban in the United States. Aside from initiating legal action against the U.S. government, that means shaping up its…

As a US ban looms, TikTok announces a $1M program for socially driven creators

Microsoft wants to put its Copilot everywhere. It’s only a matter of time before Microsoft renames its annual Build developer conference to Microsoft Copilot. Hopefully, some of those upcoming events…

Microsoft’s Power Automate no-code platform adds AI flows

Build is Microsoft’s largest developer conference and of course, it’s all about AI this year. So it’s no surprise that GitHub’s Copilot, GitHub’s “AI pair programming tool,” is taking center…

GitHub Copilot gets extensions

Microsoft wants to make its brand of generative AI more useful for teams — specifically teams across corporations and large enterprise organizations. This morning at its annual Build dev conference,…

Microsoft intros a Copilot for teams

Microsoft’s big focus at this year’s Build conference is generative AI. And to that end, the tech giant announced a series of updates to its platforms for building generative AI-powered…

Microsoft upgrades its AI app-building platforms

The U.K.’s data protection watchdog has closed an almost year-long investigation of Snap’s AI chatbot, My AI — saying it’s satisfied the social media firm has addressed concerns about risks…

UK data protection watchdog ends privacy probe of Snap’s GenAI chatbot, but warns industry

U.S. cell carrier Patriot Mobile experienced a data breach that included subscribers’ personal information, including full names, email addresses, home ZIP codes and account PINs, TechCrunch has learned. Patriot Mobile,…

Conservative cell carrier Patriot Mobile hit by data breach

It’s been three years since Spotify acquired live audio startup Betty Labs, and yet the music streaming service isn’t leveraging the technology to its fullest potential — at least not…

Spotify’s ‘Listening Party’ feature falls short of expectations

Alchemist Accelerator has a new pile of AI-forward companies demoing their wares today, if you care to watch, and the program itself is making some international moves into Tokyo and…

Alchemist’s latest batch puts AI to work as accelerator expands to Tokyo, Doha

“Late Pledge” allows campaign creators to continue collecting money even after the campaign has closed.

Kickstarter now lets you pledge after a campaign closes

Stack AI’s co-founders, Antoni Rosinol and Bernardo Aceituno, were PhD students at MIT wrapping up their degrees in 2022 just as large language models were becoming more mainstream. ChatGPT would…

Stack AI wants to make it easier to build AI-fueled workflows

Pinecone, the vector database startup founded by Edo Liberty, the former head of Amazon’s AI Labs, has long been at the forefront of helping businesses augment large language models (LLMs)…

Pinecone launches its serverless vector database out of preview

Young geothermal energy wells can be like budding prodigies, each brimming with potential to outshine their peers. But like people, most decline with age. In California, for example, the amount…

Special mud helps XGS Energy get more power out of geothermal wells

Featured Article

Sonos finally made some headphones

The market play is clear from the outset: The $449 headphones are firmly targeted at an audience that would otherwise be purchasing the Bose QC Ultra or Apple AirPods Max.

7 hours ago
Sonos finally made some headphones

Adobe says the feature is up to the task, regardless of how complex of a background the object is set against.

Adobe brings Firefly AI-powered Generative Remove to Lightroom

All cars suffer when the mercury drops, but electric vehicles suffer more than most as heaters draw more power and batteries charge more slowly as the liquid electrolyte inside thickens.…

Porsche Ventures invests in battery startup South 8 to boost cold-weather EV performance

Scale AI has raised a $1 billion Series F round from a slew of big-name institutional and corporate investors including Amazon and Meta.

Data-labeling startup Scale AI raises $1B as valuation doubles to $13.8B

The new coalition, Tech Against Scams, will work together to find ways to fight back against the tools used by scammers and to better educate the public against financial scams.

Meta, Match, Coinbase and others team up to fight online fraud and crypto scams

It’s a wrap: European Union lawmakers have given the final approval to set up the bloc’s flagship, risk-based regulations for artificial intelligence.

EU Council gives final nod to set up risk-based regulations for AI

London-based fintech Vitesse has closed a $93 million Series C round of funding led by investment giant KKR.

Vitesse, a payments and treasury management platform for insurers, raises $93M to fuel US expansion