Barclays Accepting Bitcoin Donations for Charities

One of the largest and most respected banking and financial service companies head quartered in London, Barclays, is set to become the first multinational bank to accept bitcoin deposits, although only for known charities. The service is poised to start later this year, according to the Sunday Times.

Barclays announced on Sunday that customers will be able to make charity donations using bitcoin, through its partnership with an unnamed local Bitcoin exchange. With Barclays enabling an exchange to help charities accept bitcoin, a lot of non-governmental organizations are expected to benefit. They are likely to receive more money than they would have otherwise, due to Bitcoin’s impressively small processing fee for any Bitcoin donation.

Although involving your bank branch just to make a donation to charity may sound like a rare occurrence in our smart phone filled world, the bulk of charities today still receive their largest donations by check, which requires a checking account. According to an independent research commissioned by Barclays, published in May, one in five UK charities currently do not have facilities to accept donations online, even though they are aware of the potential benefits. Also, 38% of charities are unable to accept donations via text. Further findings show a whopping 79% of charity donations are made offline by checks and cash.

“The majority of UK charities (78%) think that the number of online donations will increase over the next three years, and encouragingly, of those charities which cannot currently accept donations online, one in four are in the process of introducing this facility."
— – Barclays

The majority of charities recognize the growing importance of accepting online donations and a portion of them plan to implement online donation facilities. Barclays’ research also shows that the number of mobile users is increasing and younger donors will make charity donations via mobile devices. Therefore, with more and more charities in the process of accepting online payments, and an increasing number of people donating online, charity donations will inevitably increase, led by people between 25 and 34 years old.

“Our research shows that around one in ten mobile device users are making mobile payments, highlighting how such new technology is already being adopted. Enabling donations via text and online can also draw in younger donors who might not have given to charity before as our research also shows that 64% of 25-34 year olds predict that they will use mobile devices more regularly for m-commerce over the coming years.”
— – Barclays

This is also very promising news for bitcoin adoption. It is no secret that bitcoin is popular among the young, tech-savvy, early adopter demographic. In the UK, statistics published by Statista showed that in Feb 2014 respondents in the age group 25-34 have acquired a cryptocurrency more than any other age group.

In the US, research done by Steve Beauregard, Founder & CEO of GoCoin, an international payment platform, concurs that people between 24 and 34 use bitcoin the most.

Since Barclays research expects more young people to make donations, a large number of these younger donors would own bitcoin, and having the ability to donate using bitcoin will be an added incentive to make donations. This effect is compounded when the same research also shows that the number one use of bitcoin is to buy gifts and make donations.

Although Barclays has opened up donations to new users, anyone from anywhere in the world can already make Bitcoin donations instantly, as long as both parties have a bitcoin wallet. There is no middleman to process the transaction or charge a fee for processing the donation. Traditionally, when donating via credit or debit card, there are several different fees taken away from the charity en route. Putting bitcoin into the traditional process can cut out nearly all of these fees.

"You pay it in dollars, they get their pounds, bitcoin was in between because that cuts down on the fees"
— – Roger Magoulas, O’Reilly Media Research

This isn’t the first time Barclays made headlines for their involvement with Bitcoin. The move follows a string of Barclays recent pro-bitcoin activities, including its own in-house experiments and various collaborations with several bitcoin start-ups.

In London, Barclays has two different office locations it calls “blockchain labs,” located close to the City of London. One is in Notting Hill and another on Old Street, and between them they have approximately 75 staff members dedicated to investigating bitcoin and blockchain technology for possible applications.

Meetings were conducted at the Notting Hill office where start-ups, academics, and the government were invited “to work at the space to connect with others that are interested in the bitcoin and block chain community,” said Derek White, the bank’s chief design and digital officer. Barclays also hosts get-togethers between bitcoin enthusiasts at its refurbished warehouse in Whitechapel, in East London.

Barclays and Techstars teamed up to run Barclays own accelerator program for financial technology start-ups for the first time in London last year, and then again in New York, this July. These programs are open to all financial technology start-ups, giving them some seed money and training over 13 weeks each time. Several bitcoin, or blockchain, based startups have been through these programs.

In June, the bank announced that it was pursuing a proof of concept by signing a deal with a Swedish exchange start-up Safello, aimed to explore how the blockchain can be used in traditional finance. The European exchange was one of the graduates of the bank’s FinTech accelerator program in London last year. It would seem that the accelerator program is already bearing fruit for Barclays.

With this impressive series of Bitcoin and blockchain experiments, and the many collaborations with bitcoin start-ups already under its name, Barclays has now moved into the actual testing phase by allowing people to make donations to charities in bitcoin. This latest move by the giant bank further emphasizes its interest and increased efforts to understand and implement Bitcoin and blockchain technology as well as paving the way for bitcoin and blockchain technology acceptance at a larger level.