Stripe, a popular online payments company has announced that it will soon support Bitcoin payments. This means that customers currently using Stripe’s payment tools to accept online credit card payments will also be able to accept payments using the continuously growing virtual currency. The company and its co-founders Patrick and John Collison look forward to being one of the first major online payment platforms to accept Bitcoin. Will others choose to do the same?
For many, Stripe is an online payment platform that provides web and mobile payments that are built for developers. Companies currently using Stripe include Instacart, Rackspace, Dribble, Lyft, HubSpot and Foursquare to name a few. The announcement makes some think that competitors such as PayPal and Braintree will have to follow suit, but is unlikely in the near future. By expanding its payment options, it is likely that the company will see an increase in mobile merchants.
Stripe could bring new light to Bitcoin because the company currently supports 139 currencies in countries around the world. With Bitcoin, businesses using Stripe will be able to reach a larger audience, internationally. The eventual service that will be provided has major implications regarding the success of these small to medium businesses, by simply broadening methods of payment.
For credit card transactions, Stripe has no monthly or hidden fees and no refund costs. Merchants simply pay 2.9% + 30 cents per successful charge. Earnings can also be transferred into your local currency. The company has yet to officially launch its support for Bitcoin payments and has yet to announce its fee structure for those wishing to transact using virtual currency. However, with many charging from zero to one percent, there may not be much room to change.
It has yet to be determined if the company will use a payment processor like BitPay or Coinbase, or choose to go a different route. For now, Stripe will start supporting Bitcoin payments through a private beta that its customers can sign up for. A recent interview with CEO Patrick Collison stated that the decision to integrate Bitcoin payments is about the company’s mission to increase commerce that is transacted online. “Bitcoin is solving problems we care about.”
For Stripe, universality is a problem solved by payment methods like Bitcoin. Because of the nature of credit cards and fiat currency, there is inherent difficulty in buying goods and services from different parts of the world. Even if a person has a credit card, it costs up to 10% to simply send funds to other countries across the globe. “Bitcoin is something anyone can get a hold of,” explained Collison.
To accept Bitcoin through Stripe, merchants who transact using Bitcoin will automatically be paid in their local currency. Much like other Bitcoin payment platforms, the merchant will set the dollar value for their product or service and Stripe will capture the current Bitcoin spot rate at time of purchase. Payments will appear in the merchant’s account within seven days, similar to Stripe’s existing service. The company is working with several partners, who are undisclosed at the moment, to exchange Bitcoin to local currency in real time. This is so neither the customer or Stripe has to hold on to the virtual currency, which will allow both parties to reduce the risk of price volatility.
The inclusion of Bitcoin into Stripe can expand existing methods of completing payments using virtual currency. We have yet to see the methods used within the payment platform, but we can hope that it will help continue to drive Bitcoin’s growth in e-commerce and mobile environments. By implementing Bitcoin, companies like Stripe can help increase success of mobile businesses in all reaches of the world. No matter your stance on the future of Bitcoin, offering multiple payment options will be crucial. However, it is likely that the technology is here to stay, and as a business, you either get behind it or get left behind. Will others follow Stripe’s lead?
