Bitcoin Usage Among Merchants Is Up, According To Data From Coinbase And BitPay
Although bitcoin adoption may move at a glacial pace, merchants are seeing sustained traction regardless of market dips. Bitcoin Usage Among Merchants Is Up, According To Data From Coinbase And BitPay
According to BitPay Chief Marketing Officer Bill Zielke, the payment processor facilitated $1 billion worth of cryptocurrency transactions in 2019, with bitcoin leading the pack. Likewise, a Coinbase spokesperson said Coinbase Commerce processed $135 million worth of cryptocurrency payments for thousands of merchants in 2019, which represents a 600 percent increase in the number of unique transactions via Coinbase Commerce since 2018.
Ether and various stablecoins make up a small percentage of both of the above-mentioned totals, with Chainalysis reportedly estimating roughly $4 billion in bitcoin alone was sent through payment processors in 2019. As such, Coinbase is looking to build out its merchant services in 2020.
Of course, the number for credit card payments is much higher, dwarfing bitcoin’s $4 billion purchasing power. Credit card purchase volume in 2018 was $3.7 trillion, according to a 2019 report from the U.S. Bureau of Consumer Financial Protection.
“In 2020, we’re hyper-focused on providing a complete merchant experience with business features and insights, better serving other geographies with internationalization, adding more currencies, and building seamless integrations that leverage other Coinbase products,” Coinbase engineer Sahil Amoli told CoinDesk.
Among consumer-facing companies, Fold CEO Will Reeves said his shopping app processed more than 2,000 purchases during the 2019 holiday shopping season, out of which 80 percent were Lightning Network transactions.
“Amazon, Starbucks, Sephora were the most gifted brands by lightning users,” Reeves said.
Tales From The Cash Register
All things considered, there’s ample reason to be cautiously optimistic about bitcoin usage beyond speculative trading in 2020.
However, Lola Luna boutique owner Jean-Michel Daumas, a Coinbase Commerce customer who runs a luxury lingerie business in Paris, warned it’s still too soon to describe bitcoin payments as routine or trendy.
“People are not ready to pay with crypto. They prefer to keep it rather than spend it,” Daumas said. “I prefer to receive payments in crypto because they are more secure for me. For example, when I receive payments from PayPal, some people cheat and say they didn’t receive the goods.”
Daumas said his boutique received more than 90 bitcoin payments since early 2018, never more than four bitcoin payments a month. His customers are 80 percent men spending bitcoin on lingerie as a status symbol, an insight that aligns with BitPay’s findings that jewelry, precious metals and high-end tech products garner the most bitcoin buyers.
“It’s a very high level of fabric, couture-level,” he said. “We sell much more during the Christmas holidays, for example, [which] has much more influence [on the store’s sales trends] than the price of bitcoin.”
Indeed, Lola Luna is best known for statement pieces such as open G-string bottoms with dangling feathers to tickle sensitive areas. Perhaps some shoppers may choose to pay with bitcoin so that a “naked bra” and lace collar set doesn’t show up on a credit card bill. But, given French lingerie culture, Daumas said it’s “too early” to conclude why some shoppers prefer using bitcoin.
For broader context, BitPay’s Zielke said Europe and the Middle East are generally home to the most high-value merchant transactions, while there are more North American shoppers in terms of unique transactions. In the meantime, Daumas prefers to simply transfer the bitcoin earnings to a hardware wallet and hodl.
“I was one of the first global lingerie boutiques on the internet because I’ve always been interested in technology. I remember it was so difficult to build a website,” Daumas said. “It’s the same thing with crypto, that’s where we are now.”
BitPay Restores Service To All Bitcoin Wallets To Drive Mainstream Adoption
The leading provider of Bitcoin (BTC) and cryptocurrency payment services, BitPay, announced on Feb. 4 that the company will soon allow invoices to be paid from any Bitcoin wallet or exchange.
BitPay CEO Stephen Pair told Cointelegraph that the decision to enable merchant payments from any Bitcoin wallet was driven by merchant feedback, putting control back in the hands of over 30 thousand active merchants currently using BitPay:
“BitPay’s customers want to support all the Bitcoin wallets, just like they want to support all cryptocurrencies for payments. The company has decided to re-enable support for all wallets, which is referred to as plain vanilla peer-to-peer transactions.”
Pair mentioned that a phased rollout to support all Bitcoin wallets has already begun. Once the feature has been implemented, merchants will be able to decide which wallets they will accept payments from, while consumers would be able to use any wallet to make purchases from those merchants.
Pair also noted that merchants can take advantage of peer-to-peer transactions without any required technical development or implementation, explaining:
“We are going to automate the whole process for merchants, since we already have experience doing this already. It’s very important for merchants to support all Bitcoin wallets, as this will greatly expand their potential to grow sales and acquire new customers.”
What About Bitpay’s BIP70 Payment Protocol?
The decision to restore service to all Bitcoin wallets comes after BitPay’s rocky path towards success.
When the price of Bitcoin was inching towards its all time high in 2017, Pair explained that BitPay was experiencing delays with almost 9% of customer payments. He noted that a number of customer support issues were being reported at this time, pushing the company to implement the payment protocol known as “BIP70.” He said:
“At times, Bitcoin has been a victim of its own success. As adoption exploded in 2017 and 2018, network congestion and high transaction fees brought with them some tough decisions, like the one to implement Payment Protocol for all Bitcoin payments.”
While BIP70 helped eliminate network congestion, it also limited users to certain Bitcoin, Bitcoin Cash (BCH) and Ether (ETH) wallets. According to a 2018 Reddit post, BitPay users complained that payments could not be made using some of the most popular wallets like Coinbase and Bitcoin Wallet.
JSON Protocol Will Stay
As BitPay begins to add support for all Bitcoin wallets, Pair mentioned that the platform will continue to use the JSON payment protocol, “as we have many wallets in the pipeline looking to support that.”
Pair explained that BitPay implemented its JSON payment protocol in February 2018 (in addition to BIP70) as a result of customer support issues. The JSON payment protocol helped reduce BitPay’s error rates to nearly zero percent at the time.
The dollar volume lost to cryptocurrency payment errors dropped dramatically from over 8% (in December 2017) to well under 1% of BitPay’s total dollar volume processed.
A company blog post announcing the JSON payment protocol explained that the interface provides for direct communication between a wallet and BitPay’s servers, noting:
“If a wallet submits an incorrect payment to BitPay, BitPay’s servers will reject the transaction. This prevents any transactions which will result in a failed payment from reaching the Bitcoin blockchain and costing users unnecessary miner fees. We expect that this change will allow us to reduce payment errors to zero.”
As for wallets that conduct normal Bitcoin or Bitcoin Cash transactions, Pair noted that BitPay expects to see fewer payment errors and exceptions moving forward:
“Merchants have increased opportunities for sales from millions of global wallet holders that have not implemented the payment protocol and consumers have more places to make purchases. As a result, mainstream adoption for Bitcoin and cryptocurrency is on the horizon.”
BitPay CEO: Platform Will Support More Cryptocurrencies And Possibly Lightning Network
During an exclusive interview with Cointelegraph, BitPay CEO Stephen Pair said that the platform would soon add support for more cryptocurrencies, along with a possible Lighting Network integration.
While Pair was unable to disclose which cryptos would be added to the platform next, he mentioned there’s focus on the top performing blockchains with the highest market capitalization. He said:
“I’m not going to specifically name which ones we will add, but you can look at CoinMarketCap to see all the top blockchains and come up with good guesses in what we are interested in. We are looking at cryptocurrencies that have adoption, and work well for payments. We also might add some smaller ones that aren’t as adopted, but are doing something innovative around payments.”
BitPay, which has been operating since 2011, has become a leading Bitcoin payment service provider. According to Pair, the company conducts over a billion dollars a year in payment volume and has about 30 thousand active merchant accounts. Major enterprises like AT&T and Microsoft also use BitPay to allow customers to make transactions using cryptocurrency.
While BitPay is well-known for accepting Bitcoin (BTC), Bitcoin Cash (BCH) and Ether (ETH) for online and in-store payments, Pair has noticed that customers are requesting different cryptocurrencies to be used for transactions, noting:
“We constantly get asked about XRP and a number of stablecoins. Our customers would prefer that we support all cryptocurrencies, but we have to make choices.”
BitPay recently added support for XRP, the cryptocurrency used by Ripple’s payment network. BitPay’s CMO, Bill Zielke, said that BitPay merchants everywhere are now able to accept XRP without any additional integrations required.
BitPay also supports 3 stablecoins pegged to the U.S. dollar – USD Coin (USDC), Gemini Dollar (GUSD) and Paxos Standard Token (PAX). The platform, however, has been criticized for not supporting Tether (USDT), which is the stablecoin with the biggest trading volumes.
Pair explained that BitPay hasn’t seen strong demand for Tether. Moreover, he noted that the current speculation around Tether has left the company hesitant to add it.
BitPay Considers Adding Support For The Lightning Network
Pair also mentioned that the Lighting Network is “high on our list for what we are considering adding to the platform.”
The Lightning Network adds an additional layer to Bitcoin’s blockchain, enabling users to create payment channels between any two parties on that extra layer. This ensures almost instant transactions, with extremely low or even non-existent fees. Pair explained:
“The whole idea of the Lightning Network is to allow payments to happen off the blockchain so they don’t take up space and storage, letting them achieve higher scalability.”
About a year ago, a conversation regarding if and when BitPay would add support for the Lighting Network took place on Reddit. And although it would appear that some users are anxious for the integration, there is still debate that onchain Bitcoin transactions are better than lightning transactions.
Pair, however, told Cointelegraph that the most important aspect for BitPay is listening to customer feedback. He said:
“If our customers are asking for lightning payments, or Bitcoin cash payments, or XRP, then that’s what matters to us. It’s perfectly reasonable for someone to perform lightning transactions on top of Bitcoin Cash or other Bitcoin-like blockchains.”
Bits of BitPay And Bitmain?
It’s also noteworthy to mention that BitPay had plans to form a partnership with Bitcoin mining company, Bitmain, in 2017.
The agreement would have allowed BitPay to help Bitmain develop open source blockchain security software.
While a partnership between BitPay and Bitmain was established, Pair mentioned that there is no current relationship between the two companies. He said:
“We collaborated on a project with Bitmain a few years ago, but there is no relationship with the company today. We would like to have them sell their miners through us, though.”
Is Bitpay Gearing Up To Become Paypal 2.0?
Support for more cryptocurrencies and a possible integration with the Lightning Network may have some thinking that BitPay is positioning itself to become the next PayPal for cryptocurrencies.
While this may be, the company has — like PayPal — been criticized for restricting payments in a few instances. A $100,000 donation to an Amazon rainforest charity was reportedly blocked by BitPay last August. The reason being was that charity organization, known as Amazon Watch, failed to meet BitPay’s internal standards.
Last September, the Hong Kong Free Press also complained that BitPay was holding donor funds for weeks.
Pair explained that the Hong Kong Free Press didn’t have their bank account set up correctly and that there were additional steps needed to be taken before transactions could be made. He said:
“We have a tiered system at BitPay that starts with minimal documentation and then more documentation along the way. Often times things like this happen because companies haven’t gone through verifications or gotten approved for higher tiers.”
Pair also mentioned that BitPay takes regulations very seriously and that the company is fully compliant with U.S. regulations.
According to Pair, being compliant in the U.S. is a main reason merchants choose to use BitPay over other service providers.
“Some competitors haven’t thought through the full payment experience from a merchants perspective,” he said. Pair also attributes good customer support and e-commerce tool integrations as reasons for BitPay’s success.
Although BitPay may have all the elements required to become the next PayPal, increased user adoption of cryptocurrencies is the next step. In the meantime, Pair noted that BitPay’s goal is to reach the point where people naturally expect to have the option to pay with cryptocurrencies wherever they go. He said:
“Once you achieve that level of ambiguity, you will be able to spend cryptocurrency easily. The missing link now is embedding it, which is not something that will happen overnight. Rather, this will happen like the evolution of the internet — I think we’ll see a similar story around blockchain payments.”
Cryptocurrency Adoption: How Businesses Are Adapting To The Blockchain Revolution
There are many reasons why people own cryptocurrencies. One is to store cryptocurrencies as value due to the limited supply of coins like Bitcoin. Some people store cryptocurrency for speculation — meaning they aim to make a profit when a coin’s value increases against the United States dollar or other coins.
One of the major reasons why people own Bitcoin is to be able to make daily transactions, from shopping in a grocery store to travelling around the world. But are businesses keeping up with the crypto revolution? Let’s take a look.
The travel industry is one of the biggest industries in the world. According to Travel Agent Central, it’s the world’s second-fastest growing industry. About $1.7 trillion is expected to be spent in the travel industry this year.
With this development, a growing number of travelers who own cryptocurrencies are expected to pay for hotel rooms or for flights from their crypto wallets. A growing number of companies are adapting to this development. For example, both parking reservation company Parking Access and airport shuttle booking company Shuttlefare recently added the Bitcoin payment service provider BitPay to their websites, allowing customers to use cryptocurrency as a payment method.
The Banking Sector
Humans have relied heavily on banks to make daily payments and securely store their money. Banks are also responsible for investing assets to create more wealth. The number of people using banks is on the rise every year, according to the Global Findex database of the World Bank: 1.2 billion adults opened a bank account from 2011 to 2017.
The traditional financial industry has not been without some challenges in the past few years, with central banks of countries like Venezuela and Zimbabwe printing fiat currencies to address crumbling economies, and market leaders like Deutsche Bank caught in money laundering scandals. Many people are beginning to doubt if the traditional banking system will even continue in the coming years.
With services like PayPal and Alipay offering fast transaction speeds, the crypto space will have to compete in order to partially or completely replace the traditional banking system.
The greatest advantage the cryptocurrency space has is its promise for a transparent banking system. Decentralization and immutability ensure that everyone in the network understands what is occurring within the system — a feature lacking in the current banking. Banks understand this, which is why some entities such as Bank of America are using a single, blockchain-centred network to house banking records and to authenticate personal and business data.
Can Blockchain Technology Be Used For Online Shopping?
The online shopping industry is on the increase as more people are choosing to receive goods from the comfort of their homes rather than trekking to a nearby grocery store. With the online shopping market size expected to reach $4 trillion in 2020, more cryptocurrency companies will need to be involved to make a worldwide adoption of cryptocurrencies a reality.
Blockchain can help to improve supply chains in terms of secure and transparent payment service as well as in the online shopping industry. For example, a user can scan a QR code on a container of orange juice to see the product’s journey to the store, which helps to fight counterfeit goods.
Some companies are also offering an easy way to shop some of the largest online stores, including Amazon. For example, Olodolo enables users to shop on AliExpress while paying in various cryptocurrencies like Bitcoin Cash, Ether and Litecoin.
The cryptocurrency revolution is moving fast, but to help this happen, we need to increase the number of businesses around the world that accept cryptocurrencies as a means of payment. From online shopping to traveling around, we have seen how a lot of businesses are adapting to the crypto revolution.
Witches Love Bitcoin
We live in an age where young women use everything from emojis to bitcoin to practice witchcraft.
Claire Gallant, an ethereum fan who founded the Future Witch Facebook group, along with a corresponding art installation to fundraise for the crypto research startup Open Privacy, said she sees many similarities between cypherpunk values and witchcraft. (Open Privacy founder Sarah Jamie Lewis cheekily refers to herself as a cyberpunk witch on Twitter.)
“I think witchcraft and crypto are deeply involved with each other,” Gallant said.
After all, Gallant said, technology is “a little bit magic to us,” something that is spoken (and coded) into existence. Beyond that, cryptocurrency can enhance witches’ power by letting them transact beyond the grasp of restrictive mainstream commerce platforms.
“Whether it’s ritual objects or access to birth control in various places around the world … that whole scale applies to crypto as it applies to cash,” Gallant said, describing her interest as primarily feminist. “If you don’t have privacy and security, you don’t own yourself anymore. So cryptocurrency is important for that.”
Although witches often use TikTok and Instagram to share spells and recipes, they have not always been welcome on e-commerce platforms. Etsy temporarily banned witchcraft-related sales in 2015, just as eBay did in 2012. Taboo or occult religious practices can sometimes be subject to financial censorship due to potential reputational risks. In 2017, witches reported being banned by Square for selling “occult” items.
That’s why feminist author Sophia Digregorio publishes manifestos about “How Witches and Occultists Can Use Bitcoin and Altcoins for Privacy and Anti-Discrimination.”
From Gallant’s perspective, the right to purchase objects for her own personal use is crucial. Even as these issues apply to all religious minorities, they are more likely to be censored if the person violating social norms is a woman.
Open Privacy’s Lewis found a similar motivation herself. She and Gallant are among the many crypto enthusiasts who incorporate spirituality into their tech experiments.
Freedom Of Religion
“When someone asked if I was an activist or a researcher, I told them I was a witch,” Lewis said.
“We’ve delegated what is ‘appropriate’ to sell, advertise or even believe to some extent to these platforms,” Lewis added, referring to platforms like eBay that have temporarily banned or penalized occult shops.
For a more recent example, the organizers behind the witchcraft pen-pal project Witch Swap, which helps witches share books, crystals, tarot cards and other ritual tools, said they created a backup Instagram account after the original account wrongly triggered the platform’s community standards enforcement. On the other hand, Kelsey Lester-Perry, the entrepreneur behind KVLT Kreations online shop, said she accepts bitcoin although Etsy and Instagram still work for such sellers and novice learners most of the time.
“I get the best information from just having a dialogue with my community on Instagram,” Lester-Perry said. “There are certain keywords that you shouldn’t put in an Instagram post, like you shouldn’t use dollar signs. Their bots will catch those if you say the word ‘giveaway.’”
Yet, as the Witch Swap instance shows, accounts that promote witchcraft but don’t sell or directly distribute occult products can still attract scrutiny. All things considered, many tech-savvy witches believe the types of systems-thinking used in astrology or tarot deck readings can also apply to cryptocurrency ecosystems. And they see this technology as crucial to ensuring their future rights to freedom of religion, both in terms of commerce and self-expression.
“The acceptable norms are shrinking,” Lewis said. “We need these technologies and avenues to push back against that shrinkage. Without them, we live in a much smaller word.”
Crypto.com Launches Plugin For One Million Ecommerce Merchants On Ecwid
Crypto.com is integrating with ecommerce platform Ecwid, which now features a plugin supported by Crypto.com that lets customers pay with crypto on the platform.
Crypto.com launched a payment plugin for Ecwid, an ecommerce platform similar to Shopify or WooCommerce. The plugin allows merchants to accept crypto for their products.
Crypto.com announced the partnership on May 11. The plugin, called Crypto.com Pay Checkout, lets buyers pay with crypto for their products on ecommerce websites running on Ecwid, which the company claims are more than 1 million.
The merchants can choose which currency they want to accept as settlement. While they can receive the cryptocurrencies directly, they can also avoid exposing themselves to volatility by letting Crypto.com convert the money to U.S. dollars or euro.
The currencies supported by the plugin include Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), XRP and the Crypto.com Coin, CRO. Using CRO will also entitle clients for cashbacks on their crypto.
To support the initiative, Crypto.com will also waver the settlement fee for the first six months of using the plugin on Ecwid.
As reported by Cointelegraph, Crypto.com has big plans for 2020, which include the expansion of its exchange and its debit card program.
In April, Ledger added Crypto.com’s merchant solution to sell its hardware wallets for crypto.
In March, Cointelegraph reported about Crypto.com’s integration with tax software that helps keep track of crypto asset purchases.
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