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Merchant Review

Purse.io

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Cryptos (1)

Bitcoin

Purse.io is an American company and one of the early adopters of Bitcoin. Their business model was centred around cryptocurrencies - much before BTC prices flew off the chart. They first launched their Bitcoin Marketplace (V0.5) in April 2014 and upgraded to V1.0 seven months later in November. Initially, Purse was headquartered in San Francisco but later on relocated to Las Vegas in May 2019 and transitioned to fully remote operations.

According to Crunchbase, Purse raised USD 1.3 million from 5 funding rounds – of which USD 1 million was in 2015 from their lead investor, Digital Currency Group. 

Purse.io Review

(Image Date: 25 August 2022) 

Purse.io is commonly referred to as a BTC payments facilitator. In simple terms, it is a peer-to-peer marketplace through which users can shop on Amazon using Bitcoin. The parties involved in any transaction are Amazon, Purse, the Shopper and the Earner. Here’s how the process works

  1. The Shopper selects his desired products on Amazon and creates a new wishlist on Amazon.
  2. The Shopper then has to log in on Purse.io and paste the link for the Amazon wishlist and import it. Once imported, the Shopper will be able to see the entire list of items on Purse.
  3. The Shopper can select the desired discount rate. This rate varies depending upon how long the Shopper has an account with Purse. Users who have been with Purse for a longer period get higher discount rates.
  4. After the discount is applied the Shopper will get the option to pay using Bitcoin. The BTC paid is stored in escrow till the shopper receives his delivery. Once the BTC payment is received in the escrow account, this order will be listed and broadcasted in the available offers section/order book which is open to Earners. Earners pay for this order using their credit card, receive the Bitcoins paid by the Shopper and the order is completed.

Here’s an image of the Earners order book.

Purse.io Review

Earners are classified into 6 levels. The level keeps increasing with the number of transactions completed. There is also a seventh level (VIP) which is purely invite-only. The table below shows the Earner classification, discount limits, effective rates, transaction limit, order size limits and number of transactions required. 

Purse.io Review

  • As you can see in the table, new users will pick up transactions with a higher discount limit and a higher effective rate, whereas VIP users have access to low discount orders.
  • The effective rate is a markup rate above the market price of Bitcoin. This means that a Level 1 Earner will have to pay a higher markup rate for Bitcoin compared to earners in Level 5 earners whereas Level 6 users will pay the lowest markup.
  • The effective rate for earners is determined by the discount rate selected by the Shopper. It is calculated using the formula Earners Effective rate = 1/(1- Shoppers discount rate). So, if a Shopper selects 15% as the discount rate, the effective rate will be 1/(1-0.15) = 1.176 i.e a markup of 17.6% over the market price.
  • Earners can upgrade their level by verification. Phone number verification increases the transaction limit by 2x times. Verifying your Facebook account and Google+ account increases the order size limit by USD 25 each.
  • Purse launched an update in June 2021 which dynamically allocates orders to earners who remain idle in the order book for over a week.

Converting gift cards to cryptocurrency is another product offering from Purse. Users can convert their Amazon gift card balances, points and credits earned in Mechanical Turk, Amazon Associates, eBates, Swagbucks, and other sites into crypto.

Initially, Purse supported only Bitcoin. But in April 2015, they entered into an agreement with the crypto exchange ShapeShift. With this partnership, Purse announced that it would also accept other cryptocurrencies as long as ShapeShift supports them. Some of the supported coins include majorly traded tokens like Bitcoin Dash, Dogecoin, Litecoin, Monero, Namecoin, Potcoin, Tether, Ripple and more.

Typically, crypto merchants levy a fee based on the transaction volumes or follow a subscription model. In case of Purse, users have much more control over the fee. They can choose from a wide range of orders depending upon the effective rate and their user level.

Purse does not charge any fee for using its wallet to send, receive or store cryptos. However, users will have to bear network fees.

Shoppers are also charged a minimal fee. This fee is shown when the shopper selects the discount rate on Purse.