HomeCryptocurrency MarketsCoinbase Going Backwards

Coinbase Going Backwards

  • April 28, 2018

Coinbase Going Backwards – Elimination of Key Client Services + Needlessly Complicating Merchant Transactions = Disaster

Coinbase going backwards has made life much more difficult the past few weeks. Up until March I could sell Bitcoin and turn it into usable cash in less than 30 minutes right from my laptop. Then Coinbase utterly eliminated PayPal which now means I need to wait DAYS for a bank transfer. In the “good old days” of just last month I could’ve sold Bitcoin on Coinbase, had the proceeds transferred directly to PayPal within seconds and then have the money sitting in my checking account in less than 30 minutes. All I would need to do is agree to PayPal’s pittance of a 25 cent transfer fee via debit card.

But alas PayPal has disappeared from Coinbase altogether which has rendered this quick, inexpensive solution impossible.

But wait it gets better. An email I received from Cheapair just last week is further proof of Coinbase going backwards:

A Letter to Our Bitcoin Customers
Dear Traveler,

Since 2013, CheapAir.com has been accepting Bitcoin as a payment option for flight and hotel bookings and we hope to continue to do so well into the future. During this time, it has been a thrill to meet so many extremely smart, incredibly passionate members of the Bitcoin community and we appreciate to no end the support and loyalty that the group has shown us.

However, today we face some challenges and we’re asking for your help in finding solutions. We were recently informed by our processing partner, Coinbase, that they will no longer support “custodial” solutions for merchants, and are removing a number of the tools and features that we rely on to accept Bitcoin from CheapAir.com shoppers. These changes are scheduled to occur in a matter of weeks.

Rather than dwell on this, we are taking this as an opportunity to deliver to you an even better solution with even more digital payment options. In the coming weeks, we hope to:

  • Begin accepting additional digital currencies like Bitcoin Cash, Dash, and Litecoin. We have already begun testing these.
  • Establish a dedicated customer service phone line and email inbox staffed with advisors who have a deeper understanding of digital currencies and how they work. Admittedly, that’s been a challenge with our call center team (my fault, not theirs) and I know this has led to some frustration.
  • Automate some processes that have been semi-manual, so we can issue refunds more quickly, or generate/re-generate a BTC invoice for a booking made over the phone or by email.

To go where we want, however, we need a reliable processing partner. The reality is, as much as we love Bitcoin, our travel supplier partners (airlines and hotels) just aren’t there yet. Because we have to immediately transfer to them most of what you pay to us, we have no choice but to convert BTC to fiat as payments come in. Coinbase has been providing that service for us, but at the end of the month they are getting out of that business, leaving us scrambling for an alternative.

Our intention at this point is to use BitPay as a processor. We have had a great experience with them so far and our integration is largely complete. But our one giant concern is that Bitpay does not support “non-payment protocol wallets” (wallets that aren’t BIP-70 compliant). So if you do not have a compatible wallet, you would have to get one and use it as an intermediate stage for your Bitcoin payment.

We understand what Bitpay is trying to accomplish. The issues they are trying to address–delayed or incorrect payments–are real and were especially rampant back in December and January when transaction volumes spiked. On the other hand, I am not keen on the idea of asking our customers to, in many cases, do more work or change wallets just to be able to transact with us.

This is where we’d love your input. Do you buy from other Bitpay merchants? Do you find the BIP-70 wallet requirement to be reasonable or too onerous? Candidly, would this make you more or less likely to do business with us?

Please feel free to reach out with thoughts or suggestions by commenting on our blog, tweeting @CheapAir, or emailing me directly at jeff@CheapAir.com.

Thank you again for your continued support,

Jeff Klee
Founder and CEO

So Coinbase lost a large corporate client and Bitpay wins one. That’s the very nature of the free market at work.

Regular readers will easily recall how I bought a plane ticket with Bitcoin via Coinbase on CheapAir.com earlier this month in a simple, hassle-free transaction.

I am truly disappointed in Coinbase. For so long I’ve been seeing them do so many good things to move cryptocoin forward into mainstream acceptance. Up until recently I have truly been a fanboy. All of the recent announcements of promising new hires not withstanding, it’s impossible not to see that Coinbase going backwards is a real thing. And a real sad thing.

Coinbase going backwards needs to stop. Coinbase gave up so much ground they won by their asinine actions lately. They need to resume forward thinking and decisive action if they hope to maintain their dominant position as a cryptocoin exchange.

As an extension of my thinking I am going to visit a Bitcoin ATM machine here in the Las Vegs valley. I expect an attempted robbery vis a vis their published exchange rate, transaction fees, etc. Expect a full report from me within the next 48 hours. Personally, I expect to give Coinbase an expanded business model as a result. Stay tuned!

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Seth Fields