This post was originally a Tweet thread by Jean Amiouny.
You really gotta feel for Canadians wanting to buy bitcoin.
I've been in the space offering crypto services to Canadians for 3 years, here's what I've learned.
Canadians have among the lowest adoption for fintech services in the world. We're told that Canadians are unaware of such services but this is by design.
Canada has tremendously high barriers to entry for financial services so new startups are much harder to build.
Yet, the big 5 Canadian banks are the most profitable businesses in Canada. 80% of Canadians are serviced by just 5 companies.
Here's how Canadians typically get paid for things:
- Interac e-transfer/online
- Bill payments
- Debit/credit cards
- Wire transfers
EFTs are reversible within 90 days, no questions asked. There is no resolution procedure for transactions, meaning the merchant can provide a service or product and is on the hook for a reversal for up to 3 months.
Only recourse available? Sue their client in court.
Interac transactions are marketed as 'zero liability' for merchants. What they don't tell you is, in the case of unauthorized transactions, funds can (and will) be requested back. Merchants again on the hook for the transfer being reversed with no procedure for recourse.
Bill payments are proprietary to each bank, cost up to $$$ every month to be listed, must be approved as a legitimate/acceptable provider. So any given merchant would have to sign up to every bank.
Luckily, only 5 easy monthly payments get you most of the Canadian market!
Wire transfers are subject to ridiculous fees, usually a mixture of fixed and variable on the transaction amount both for the sender and the receiver. They can be reversed and blocked by the sending bank or can be withheld or "found lost in the system" for weeks.
Most in the space will tout the reversibility of transactions as a feature. There may be some advantages to reversing payments but, make no mistake, this only makes everything more expensive. Merchants take into account the risk of reversals and price it into total cost.
In my opinion, this all starts from the archaic security infrastructure practiced by most banks.
Online banking portals require passwords to be less than 8 characters (no symbols) and are likely stored in plain text. This invariably forces users to use passwords like 'password' and 'abc123' making it extremely easy for unauthorized access to online accounts.
Here's what we've learned since launching Shakepay a few months ago.
Many banks can and do decide what their clients can do with their money. They have veto on every single transaction from and to your bank account.
Starting a financial service company in Canada is hard. Getting a bank account is hard. Very hard. No banks want to service their potential competition.
There are reports on reddit of a few individual bank accounts being closed for transacting with a crypto platform.
These practices are widespread across Canada. In my experience, the larger the bank, the higher the likelihood of headaches.
It's absolutely unacceptable for Canadians not to be able to access their money and control where they spend it.
Bitcoin is free and open for anyone to use. Sound money should be available for anyone who wants to participate. It's the world's greatest public utility.
We're seeing an amazing thirst for Bitcoin by Canadians. The Bank of Canada recently reported over 5% of Canadians owning bitcoin.
But buying bitcoin in Canada has remained terribly difficult.
At Shakepay, we're solving this problem.
We're building Shakepay to provide open access to wealth for all Canadians.
We face issues like these head on with our community every day, and we're glad to be on your side. We're trying to be as transparent as we can: our rates, how we charge. Expect much more from us on this shortly.
But most importantly, we're building Shakepay to be as easy and frictionless as possible.
The only way to a better future is to speak out, convince your fellow citizen there's a better world possible, and then build it.
We will win by building together.
~ Jean Amiouny, CEO at Shakepay