How do you split a bill using crypto?
TL;DR: USDC helped our International Payments team split the dinner bill, one small example among broader use cases and interoperability in payments.
At Coinbase, we’re working hard to help update the financial system by building trusted products that expand the utility and adoption of crypto because we believe crypto and blockchain technology have the ability to increase economic freedom and opportunity around the world. As a remote-first company, Coinbase has employees across the world. The Coinbase payments team has teammates spanning the US, UK, and Singapore. Once in a while, we find ourselves sharing a meal. We’ve recently had to split a bill in a US restaurant.
Here are the different payment systems that each teammate is connected to. Each person is connected to a local fintech payment app for their respective country that they use for peer to peer payments. However, none of the apps can talk to each other.
Two people with a US peer-to-peer payment app (requires a US number) linked to a US debit card.
One person from Singapore who has Paynow and a Singapore bank account
One person from the UK who uses Monzo and has a UK phone number.
The simplified scenario is this — the bill is $80 USD, and the restaurant will only take one debit/credit card.
Options to split the bill
One teammate (US card) provides their card to pay for the bill. Whoever in the team has a common app pays $20 to the person who paid the bill.
However, there are two teammates who are not based in the US and do not have a common peer-to-peer payment app. Here are some options for the individual.
Option 1: Pay $20 in cash (find an ATM, withdraw cash in the local currency, pay ATM transaction fees).
Option 2: Check if there’s a common payment app and both transfer $20
Option 3: Send $20 worth of USDC to the person who paid the bill on their crypto wallet.
We’ve simplified the scenario and three options, but this is broadly what the international group could do to split the dinner bill.
How should someone evaluate the three options? Here’s some common decision criteria for consumers.
Decision criteria
Fees: Stated or hidden fees matter. For example, getting cash from an ATM usually has a withdrawal fee. This could be a fixed fee or % fee.
Exchange rate: This is a tricky one and where there may be unknown fees. It’s easy to ignore this if the total amount is small. For example, 20 USD could be
27.26 (Google’s mid market rate) SGD
28.23 (Anonymous platform) SGD
27.4 (Coinbase SGD to USDC rate) SGD
Speed of payment and convenience: How quickly can one settle the bill?
Consumer challenges
Already you see that it is not straightforward to split a bill, given we are part of different payment networks in different countries. Here’s a list of common challenges:
Fees issues: Bank transfers are possible, but a wire cost is likely too high for a $20 transaction, coupled with an unknown exchange rate.
App ubiquity: Most money transfers would require consumers from different countries to use the same app, so as to move money smoothly and quickly.
Convenience: Cash works but is inconvenient both from a withdrawal and security perspective. For USDC transfers, it requires a level of crypto wallet access (both custodial - via an exchange, and non custodial - a self custody wallet).
This time, sending USDC via Base was possible, with an exchange rate of 1 USD to 1.37 SGD. How did sending USDC perform against the decision factors mentioned above?
Fees: Free
Exchange rate: Slightly higher than mid market, but still competitive.
Speed of payment and convenience: Fast. One had to note to choose the same network to send / receive the funds on (more here).
As a consumer, we appreciated having multiple ways to make seamless peer-to-peer cross-border transactions. Cards and fintech apps have helped to simplify the process, but peer to peer connectivity is often not straightforward. We believe USDC presents a straightforward and interoperable solution for bill-splitting, and we’re excited by the growing number of international use cases spanning borders and use cases.
