Rakuten Sizes Up BitNet To Build Blockchain-Based Loyalty Program
Tokyo-based Rakuten plans to acquire the intellectual property assets of Bitcoin payment processor, BitNet.
Rakuten Inc, has already started to negotiate with the California-based company to purchase BitNet’s various intellectual properties. Potentially for its blockchain digital asset management, payment and B2B cross-border remittance services which will allow the e-commerce business to experiment and modify services to better fit its e-commerce needs.
According to the Wall Street Journal, it is believed that Rakuten might be using BitNet’s IP assets to develop and test blockchain technologies. This might mean the exit of BitNet Technologies from the Bitcoin payment service industry since the company is heavily involved with blockchain R&D.
To date, both Rakuten and BitNet do not wish to comment on the deal. Also, there has been no indication whether the two companies have negotiated what is to be acquired or if they have closed the deal.
BitPay and BitNet have a difficulty competing
BitNet itself has mainly made services tailored towards e-businesses while competitors such as Coinbase and BitPay invite any merchant to use their service which sets BitNet apart. With services such as Digital Asset Management, this can allow Rakuten to create a blockchain-based loyalty program. Which can mean both a faster and safer than a standard point-based loyalty program.
Ever since Rakuten announced in March 2015 that they will be using BitNet’s Bitcoin payment gateway to accept Bitcoin, they have slowly grown an interest in the payment processor. Including investing in a Series A funding round to gain a stake in the company back in 2014.
As more Bitcoin payment processors become available, existing services such as BitPay and BitNet have already experienced higher difficulty competing since the growth rate has slowed down for companies in the industry. This is suspected to be caused by the uncertainty of many businesses to use digital currencies as a payment option due to negative news and volatility. Also, with altcoin payment service, CoinPayments already being adopted by many merchants, rival Bitcoin payment services risk losing loyal merchants.