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Stripe Jumps Off Bitcoin Bandwagon, Citing Fewer Payment Use Cases

January 24, 2018 1:53 pm
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Even as companies gravitate toward cryptocurrency, one of the earliest bitcoin supporters has elected to sever ties with the digital currency. 

Online payment company Stripe announced Tuesday in a blog post it is winding down support for bitcoin payments, effective immediately. Stripe will process bitcoin transactions until April 23, 2018, it said. 

Ironically, Stripe was the first major payments company to support bitcoin way back in 2014.

Transaction Time, High Fees Pushbacks

Outlining the reasons for its decision to do away with bitcoin transactions, Stripe said bitcoin has evolved as an asset rather than a means of exchange, making it less useful for payments. Transaction confirmation times have risen substantially, bumping up the number of failed transactions denominated in fiat currencies, Stripe said.

"By the time the transaction is confirmed, fluctuations in bitcoin price mean that it's for the 'wrong' amount," the payment processor said. 

Fees have risen so much so that they are now as expensive as bank wire transfers, the company said. 

Stripe indicated that customers as well as businesses have lost interest in bitcoin payments, with fewer and fewer use cases seen for accepting or paying with bitcoin.

The company said it remains optimistic about cryptocurrencies overall and discussed the strength of some altcoins such as Lightning, OmiseGO, Ethereum, Stellar, Bitcoin Cash and Litecoin.

Stripe did not rule out the possibility of bitcoin becoming a viable payment option again in the future.

See also: Cryptocurrency Mining: What It Is, How It Works And Who's Making Money Off It

Most Peers Leery of Crypto

Paypal Holdings Inc (NASDAQ:PYPL), which pioneered online payment and transactions CEO Dan Schulman said bitcoin isn't well-suited to being used as a currency in a recent interview with The Street.

"Because retailers have very narrow margins and when you have a bitcoin bouncing up and down by 15 percent over a couple weeks' period, that can be the difference between profits and losing money on every sale," Schulman was quoted as saying.

PayPal co-founder Peter Thiel's Founds Fund invested between $15 million and $20 million in cryptocurrency, according to a Wall Street Journal report.

Visa Inc (NYSE:V) CEO Alfred Kelly said in a recent interview the company will not process cryptocurrency transactions. Kelly said he views crypto as a speculative commodity rather than as a payment system.

Mastercard Inc (NYSE:MA) began using its own blockchain technology late last year for sending money while steering clear of cryptocurrencies. Instead, payments were accepted in fiat currencies.

The World Wide Web Consortium announced a browser API late last year that it created with the support of Apple Inc. (NASDAQ:AAPL), Alphabet Inc (NASDAQ:GOOGL)(NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), Facebook Inc (NASDAQ:FB) and Mozilla that allows new payment information for bitcoin, ether and some traditional online payment methods to be stored in the browser.

This Payment Request API, when activated in browsers such as Chrome, Firefox, Microsoft Edge, Apple's Webkit and Facebook's in-app browser, will accept crypto-related information, making it easy for buying and selling goods online using cryptos.

In November, reports suggested Amazon.com, Inc. (NASDAQ:AMZN) may begin to accept crypto payments after the online retail behemoth registered three domain names related to cryptocurrency. It was also speculated that Amazon could launch a crypto exchange to capitalize on the boom in digital currencies.

Related Link:

How Wall Street's Head Honchos Feel About Cryptocurrency

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