This is very bad news for Western Union.
Is this a direct competitor to coinbase? Does anyone know what the differences are between the two?
While this might be great for new users, who don't want to bother with the system, you don't have any control over your own private keys and this is fatal. Yes, they say, the Bitcoins are insured, but finding an excuse won't be too hard for them. From the last goxxing we should've learned that without being in the full possession, the loose of Bitcoins through the business failing is inevitably higher. Also, why bother with Bitcoin if you don't want to appreciate any of it's real benefits (decentralization, pseudonymous, etc), but just jump in because it's either hip or soemthing alike. Fast transaction times are also possible with PayPal
If bitcoin is to be broadly useful, it needs a much higher marketcap to provide increased liquidity. Currently it couldn't come close to handling a fraction of the global the remittance volume, not to mention many other applications. For that to happen, it needs to be accessible for a general audience. This audience is not interested in anything but lower cost and ease of use. Like it or not, wallet services are an essential part of serving this audience. Cold wallets, decentralization, multi-signature addresses, pseudo-anonymity, etc., are perks that tech savvy folk can enjoy if bitcoin gains broad adoption.
You are right, but the benefits for the normal user seem small compared to solutions like PayPal or ApplePay. I also think wallet providers are important, but they have to show the real benefits BTC has through giving you full control of your money (private keys) and also explaining it to them ("here, your gov just can't tax your saving suddenly and nobody can shutdown your account, because your are selling cuba cigaretts"). But yes, any new uneducated user is better than no new users. They provide liquidity and normally they have at least some basic knowledge about BTC being not controlled (atleast) by their own government - at the end, they can educate themselves later. Personally I just fear, that new banks will be built on top of Bitcoin to a state, where you can't/almost can't use Bitcoin in the intended way (White bitcoins, any bitcoin the gov/bank can prove it has an identifieable owner behind it are onyl spendeable, see BitLicense) or that users will be kept in a ecosystem consisting of BitPay and Circle/Coinbase, similiar to the Internet back then with AOL or now with Facebook (this issue was worse a few years ago tbh). Then BTC is controlled by a few banks and govs and we are at the old system