This new business is an online payment service. Its a closed system and like e-gold all transactions are final, but the digital dollars cannot be exchanged by third party agents so it appears all transactions go back and fourth with the SA company. This type of business does not offer much protection from fraud, default risk and other problems we have seen plague the industry in the past few years.
Its appears that customer deposits are held by the Central American International Trust Company S.A. out of San Jose, Costa Rica.
Not to change the subject, but there are two ways I would use the word ‘Trust’ in a sentence. First would be to show confidence in a product or person, “I trust her judgment when it comes to decorating.” The second use would be to describe a legal Trust such as “Belize Sun Real Estate Trust”, signifying that this business was a set up as a legal Trust. However, using the word “Trust” in a company name, without the legal benefit of actually being a Trust or administered by a Trust, might be considered by some as inaccurate or misleading. The ‘Central American International Trust’ is NOT an offshore Trust and I can’t find anywhere it says client funds are administered by a Trust. I could always be wrong….
One very basic good point can be found in section 3.1 of the User Agreement as shown below.
3.1.1. All VC$® in circulation shall be backed 100% at all times with unencumbered United States Dollars. VC$® is payable to User, on demand, subject only to the conditions specified in this Agreement.
I suppose its always good to know if I deposit $1000 USD into V-coin, management is not pulling an EMO and making half of that disappear or practicing fractional reserve. 100% USD backing, that’s a good thing, any proof? Costa Rica is a an impossible place for a foreigner to litigate a financial loss.
The Good Stuff
For both personal and business merchants opening a new account and sending funds are both free operations. You are charged a low fee when you receive funds and across the board for both merchants and individuals that fee is: 0.35% + VC$0.35 per transaction. V-Coin is convenient and similar to PayPal by the fact that you can email VC$ to anyone who is not yet an account holder. That potential new client can then sign up and receive your funds into their new account.
Are V-Coin accounts anonymous? No, (a good thing) the sign up requires all the usual name and address information plus ID numbers. From their user agreement…
2.2. Identifying Information. User must provide Issuer with valid and accurate identifying information as determined from time to time by Issuer.
Can someone using V-coin reverse my transaction like PayPal? No…
2.4.1. User agrees that all Transfers initiated by User are final and not reversible.
Will V-coin freeze my account for no reason? I don’t think so…
4.5.1.2. Issuer will Freeze or remove a Freeze from an V-Coin® account, if ordered to do so by an order from a court or arbitration body of acceptable jurisdiction, as determined by Issuer.
Does V-coin offer a merchant directory for additional exposure to users? Yes….from a recent post,
“V-Coin also offers a marketplace, much like a shopping mall for member merchants to promote their online businesses which accept payment in V-Coin at no additional charge.”
You may hear a bit of sarcasm coming though my writing in this post. I’m not real excited about V-coin and I would not at this time recommend using them. Here’s why….there are now many other proven online currencies available with strong track records. For a new entry to succeed it should clearly target a market and be descriptive and obvious for those users.
- Are you targeting gambling?
- Will your best customer be funding a V-coin account with his credit card?
- Is it possible to use a local cash option to fund a V-coin account?
- Can I exchange your digital money for another like Webmoney or Pecunix?
- What banking relationship do you support? US?
- What is your AML policy?
Its not enough anymore just to create an online payment system. You can’t reinvent the wheel. There are dozens of other payment methods now available and most of them are popular, regulated financially stable and transparent. My question is, “How will V-coin compete with these other services?”
Why would I use V-coin over Webmoney, NETeller, PayPal etc.?
Their web site needs to be very clear in showing visitors, the advantages of V-coin are……1,2,3 and right now I don’t see that anywhere.
From their web site, as an initial visitor, I can’t even tell how I am supposed to get my national currency deposited into a V-coin account. Hopefully, they will work on their marketing strategy in the future and have great success. I’ll check back.
These are my personal opinions expressed here and remember I have not yet used this service, so remember its a new company….be sure to take my opinion with a grain of salt.
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