Uber Signals a Move To Accept Cryptocurrency in its App

During a recent recruitment event, Uber announced plans to accelerate the growth of its sideline business in financial products by opening a new fintech office in New York City.

Fintech expert Monica Eaton-Cardone says that Uber’s primary goals are to encourage customer loyalty within its rideshare and food delivery businesses and help contractors manage earnings.

“In essence it’s a move to integrate payments further into the business by eliminating the middleman in the form of payments processors,” she said.

Among the potential beneficiaries of Uber’s expanded fintech activity could be participants in the gig economy.

  • Uber said it is interested in helping its network of independent contractors better manage earnings.
  • While it is estimated that as many as 20 percent of the full-time U.S. labor force will consist of short-term independent contractors by 2020, few traditional financial institutions offer services specifically tailored to this population’s needs.
  • Uber, which already has a program in place to help its drivers and food deliverers access an individual retirement account or Roth IRA, would be well positioned to offer further financial services to its own workers.

From a business perspective, it could make a lot of sense for a company that accepts only mobile payments.

  • Uber could significantly reduce credit card processing fees. Its outlay for credit card processing was $749 million in 2017, 62 percent above the $461 million total for 2016.

The challenge will be to overcome consumer skepticism. While American consumers love convenience, they’re generally not willing to hand over as much data as might be required.

“I think the main obstacle will be getting customers to engage,” Eaton-Cardone said. “Brands are essentially asking buyers to transition to a new payments model where they keep multiple, decentralized bank accounts with different retailers.”

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