Bitcoin Access Expanded to over 11 Million Users of WebMoney

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webmoney_logoWebMoney, considered the PayPal of Russia, announced the addition bitcoin as a payment option today. This will enable both merchant as well as person-to-person transfers. WebMoney had over 11 million users in 2010, and this number has no doubt grown significantly since then. WebMoney accounts are called purses, and transactions can be denominated in bitcoin, gold, USD and rubles among several others. All transactions are irreversible so there is little concern for charge-backs like PayPal would face.

WebMoney is entering the four markets TGB described as potential opportunities for PayPal: merchant tools, online wallets, exchanges and escrow. Clearly, they are beating PayPal in the race for adoption.

Merchant Tools

The most prominant question many people ask when discussing bitcoin is “where can I spend it?” WebMoney adds a simple interface and robust API toolset for merchants to add bitcoin acceptance to their site. The over 10,000 merchants currently using WebMoney can now enable bitcoin transactions just as they would any other currency. Two popular companies that already use WebMoney are Steam and Dealextreme.

Online Wallets

Over the last 4 years online bitcoin wallets have been fraught with poor security practices and even outright fraud. WebMoney will be a welcomed addition to this market since they are a reliable and established company. They have developed a robust security network while providing online transactions in other currencies.

Currency Exchange

WebMoney already has an established currency exchange system on their site, so enabling bitcoin as an option now allows transfers to any of their other denominations. People have already started transacting in bitcoins – WMX – and the volume is likely to pick up from here. One WMX is equivalent to one mBTC, or 0.001 BTC.

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Escrow

Escrow service enables a third party to hold funds for a transaction until both sides of the agreement have been completed. This reduces the risk to each party: the payer knows that the buyer can’t abscond with the funds, and the buyer knows that they payer has the money and is willing to send it. Escrow service is imperative in irreversible transactions for large sums of money, especially when the two parties involved do not have an established relationship. These services are frequently used large purchases such as real estate, or international goods shipments.

Update: One of our readers, Andrew, was kind enough to point out that WebMoney also provides an escrow service so we’ve added to the list. The original version only identified WebMoney as addressing the first three of the four business areas.

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