Circle, a U.S. social payments app backed by a venture arm of Goldman Sachs, is partnering with Barclays in Britain. The partnership will provide the banking license to start offering free cross-currency payments and transfers between friends using Bitcoin.
Because the cost of acquiring new customers is much lower than a traditional bank, Circle is free to focus on growing its customer base.
The company still faces an uphill battle. According to a survey by Ernst & Young, consumers in the U.K. prefer physical branches for five out of 8 banking tasks. And the finTech adoption rate is lower in the UK than elsewhere. And the risk still remains as to how circle will perform in periods of volatility. Circle’s algorithms have not been tested through a downturn.