San Francisco based merchant processing company, Stripe, has topped the Bitcoin news today that it will allow its merchant customers, who utilize credit cards to accept payment online, to add bitcoin in a late Wednesday announcement. Jeremy Allaire’s Circle Internet is beginning to test payment processing with bitcoin but Stripe believes that it is first to make a major offer to accept online payments with bitcoin.
Prior to this support announcement merchants who accepted credit cards online and wanted to add bitcoin as a payment method would have an intermediate step to integrate first with a bitcoin-specific processor such as Coinbase or Bitpay.
Now according to co-founder, CEO Patrick Collison, this step of supporting payments through a private beta program that its merchants can use allows Stripe to increase the amount of business traffic online. This is a bet for the future to increase commerce transactions.
‘We acknowledge that bitcoin is important today … it may or may not be important in five years,’ states Patrick Collison. ‘No matter what happens,' he added, 'multiple payment instruments will be important.’
This move is strategic for several reasons. Recently, Stripe set up ACH payments in 135 countries so money could be retrieved from a customer’s bank account. Bitcoin is supplying a universal payment option around the world so it can be utilized from anywhere without geographical borders. This approach to use bitcoin is truly global in Collision’s belief for transacting business.
Merchants who choose to add bitcoin as a form of payment will receive it within seven days in the currency of their choice and their bank. The transaction will immediately convert the bitcoin so price volatility will not be an issue. At this time Collison states that Stripe is working with undisclosed partners to convert the currency to the choice of the merchant and keeping it in as close to real time as possible from completion.
Stripe charges 2.9% plus 30 cents on each credit card it processes whereas bitcoin processing fee is around one percent. Christian Anderson, lead engineer of Stripe, explains that Stripe will not hold any bitcoin in storage, so it will not be affected by price swings. In terms of building relationships and providing multiple payment options, Anderson stated in a Q&A with Coin Desk today the business outlook for this strategy:
‘This is a long-term investment for us. People selling online aren’t going to shift all their sales to bitcoin overnight, or even in the next few months. There’s some education needed on what accepting bitcoin means and what the advantages are. We also need to make the consumer buying experience better. That’ll take time.’
At this time Stripe is a competitor to Pay Pal, Braintree and Authorize.net, none of whom accept bitcoin payments at this time. One small merchant payment processor, Balanced, has launched a set-up with Coinbase for bitcoin payment acceptance.
Anderson does not see Stripe as competing with Coinbase because one buyer in one part of the world may take bitcoin from their wallet on Coinbase and transfer it to make a payment to a merchant in another part of the world. The e-commerce exchange is very healthy and profitable for all.
Anderson’s complete interview with CoinDesk is on their site today.
To find more information about Bitcoin see the list below in Author’s suggestions and view the video above this article explaining the IRS ruling on Bitcoin and the taxable implications for use in transaction purchases.
Twitter: Victoria Wagner@victoriaross888