AirBitz Partners with Fold, Allows Users to Buy Gift Cards inside Wallet
Airbitz, a mobile wallet that includes a location-based directory of companies that accept bitcoin, has officially announced a partnership with Fold, which will allow users to purchase Starbucks and Target gift cards at a discount directly inside the wallet.
Fold, which was launched in 2013, allowed users to purchase Starbucks cards at a 20 percent discount using bitcoin. While only Starbucks and Target are currently supported, Fold is looking to integrate Whole Foods, CVS, and Home Depot, according to a recent interview with Fold Founder Matt Luongo.
"We’ve also been looking at Walmart, CVS, and Home Depot," Luongo said. "The top 30 retailers in the U.S. are all in our sights.”
While the addition of Fold into the Airbitz ecosystem could be seen as a simple way to streamline the gift card exchange process, Airbitz CEO Paul Puey has a larger vision.
"Airbitz aims to secure digital assets across multiple applications, starting with our own," Puey said. " While we started with digital currencies, we're already securing login credentials with BitID. With the launch of the Fold integration, we're now securing gift cards, just a new type of digital asset.”
BitID, a decentralized authentication protocol developed by Eric Larchevêque, allows users to replace passwords with bitcoin private keys and avoid the account creation process entirely.
Fold is not the first company to resell unused gift cards – Raise, Cardpool and ABC Gift Cards all purchase and sell discounted gift cards online. Gyft, one of Fold's main competitors, accepts bitcoin as well. Samsung even released an update for its Samsung Pay app last week that allows users to purchase "50 popular merchant gift cards" directly in the app for face value.
However, by integrating Fold's service directly into the Airbitz mobile wallet, both companies are hoping to reduce friction and streamline the process for their users.
But as these services become more popular, some websites are beginning to crack down on the sale of gift cards as they can serve as a way to launder money from stolen credit cards.
Bitify, an Australian bitcoin and litecoin marketplace, recently banned the sale of all digital gift cards as some buyers "claimed that [the gift cards were] purchased with stolen credit cards."
Fold says it has put in place preventive measures to deter the resale of illegally obtained gift cards.
"We've built a best-in-class fraud prevention system to protect ourselves and our customers," said Luongo.
This partnership has been in the works since the beginning of 2015 when both Airbitz and Fold were participating in accelerators in Silicon Valley (Plug and Play and Boost VC, respectively).
“ I’ve been promoting Fold since 2014 when almost no one had heard of the service,” said Puey.
Airbitz is available for free on both iOS and Android. To take advantage of this new partnership, create an Airbitz wallet and navigate to the 'More' tab bar on the bottom of the screen. From there, choose the "Buy/Sell Bitcoin" option and select which retailer's gift card you'd like to purchase. Load up your bitcoin, swipe to send, and a preloaded barcode will appear, which you can scan at checkout.
Fold works at any location that accepts U.S. gift cards. This includes Canada, Mexico, Australia, Ireland, Hong Kong, Great Britain, Macau and Spain, according to their website.