Start- up Circle launches free foreign payments service in US, Europe

Blockchain- based payments start- up Circle Internet Financial on Thursday launched an international online money transfer service that allows people in the US and Europe to send money to each other instantly and at no cost.

The new service is part of a push by the financial technology ( fintech) sector to compete with established financial institutions, by using digital technologies to offer cheaper and more user- friendly services, often via smartphones.

Boston- based Circle Internet operates its appbased peer- to- peer payment network using blockchain, the technology that emerged as the system underpinning cryptocurrency Bitcoin.

One of the most well- funded blockchain startups, Circle’s investors include Goldman Sachs Group Inc and Baidu Inc.

Circle Internet’s international money transfer service, built on a type of blockchain called Ethereum, will allow customers to send payments involving US dollars, pounds or euros on their mobile phones. There are no fees or foreign exchange mark- ups. International payments, according to Circle’s chief executive officer and founder, Jeremy Allaire, should be fast and easy.

“When’s the last time you sent a ‘ cross- border e- mail’?” Allaire said in an interview. “The idea of cross- border payments is going to completely go away ... Our vision is for there to be no distinction between international and domestic payments.”

Circle, which processed more than $ 1 billion in transactions in 2016 and whose customer base increased more than 10 times in the 12- month period that ended in May, does not make money from its payments service, nor does it plan to.

“We don’t think there is any money to be made in payments anymore,” said Allaire. “The entire business model of extracting a toll or having time delays around the movement of value is going away completely.”