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September and October 2021 brought a veritable avalanche of bullish news from the crypto payment industry, from BTC tips on Twitter to Stripe getting involved with crypto after a 3-year hiatus. Looking into the implications of these exciting developments, here is one of the industry’s leading experts’ commentary.
When talking about the crypto market, most people think of trading and DeFi but forget about another important segment: crypto payments. And yet, in the past couple of years, paying with crypto has gone from a geek thing to do to many people’s preferred option.
Leading crypto gateways’ volumes have skyrocketed. For example, CoinsPaid has already processed over 2.7 billion euros worth of crypto in 2021. One country — El Salvador — even made Bitcoin legal tender, potentially paving the way for mass adoption of crypto payments on a state level in Latin America.
As if that wasn’t enough, several major financial companies have announced a move into crypto.
This begs the question: How will the market be affected and the end-users who choose to pay with cryptocurrency?
Stripe to Resume Crypto Support after 3 Years
Payment giant Stripe has a $94 billion market cap and processes card payments for over 3 million online businesses. Of course, it was a much more modest-sized company when it introduced Bitcoin support in 2014, followed by support for XLM (Stellar). The experiment ended in 2018 as BTC transaction fees and processing times rose.
In October 2021, Stripe announced that it’s putting together a new cryptocurrency team to work on the ‘future of Web3 payments’. So, should crypto gateway operators be worried?
“Stripe hasn’t said anything about adding crypto support to its payment solutions yet,” said CoinsPaid CEO Max Krupyshev. “Even if they decide to do it, it will take time to catch up – we aren’t in 2016 anymore, and merchants expect much more advanced tools, such as support for dozens of cryptos, fiat settlements, automatic conversion, etc.”
“But even if Stripe does decide to offer crypto processing as part of its gateway, we’ll welcome it as an opportunity, not a threat. Everything that brings more visibility to crypto payments is a good thing.”
BTC Tips are Now Live on Twitter Thanks to the Startup Strike
Twitter’s founder Jack Dorsey is a known Bitcoin enthusiast, so it could come as a surprise to some that it took the social network so long to implement BTC support in some form. However, with transaction fees upwards of $3 and 10 minutes required for a single network confirmation, Bitcoin is hardly suitable for small payments like tips. A good solution to date is Lightning Network – a second-layer protocol that uses channels to send virtually instant, near-free BTC payments between parties.
Twitter implemented a Lightning Network solution by the Strike startup. So far it’s available only to iOS users and requires the Strike wallet app. Still, it’s a very important innovation that can pave the way for in-app crypto transactions in other social apps – something that Facebook is also working on with the upcoming Novi wallet and Diem blockchain.
AMC to Allow Moviegoers Pay for Tickets with BTC, ETH and LTC
AMC Theaters, the largest movie theater chain in the US with over 8,000 screens, will start accepting Bitcoin, Ethereum, Litecoin, and Bitcoin Cash by the end of 2021. This will make it one of the first major brick-and-mortar consumer chains to offer wide support for crypto.
“I’d like to see how they solve the problem of mining fees,” said Krupyshev. “An average AMC movie ticket costs $13-14, while the current Bitcoin transaction fee is $3, and for Ethereum it’s $23. You have to be a real crypto enthusiast to pay 20-25% extra just to use BTC. They could use Lightning Network, similar to how Twitter tips work, or go the off-chain route, with a sort of a wallet that can be topped up.”
“But the easiest route would be to add cryptocurrencies that are good for small payments, such as XRP and DOGE. I know that many were disappointed not to find DOGE on AMC’s list, so let’s wait and see if they change their approach.”
CoinsPaid Introduces the First Solution for Recurring Payments in Cryptocurrency
The total volume of recurring card payments in the US is set to reach $470 billion in 2021. Netflix NFLX, YouTube, Twitch, various SaaS services and business tools like Zoom – it’s hard to find a consumer who doesn’t use at least one subscription app.
Recurring subscription payments in crypto, however, have long remained a challenge, because a crypto transaction has to be initiated on the payer’s side. In 2021, CoinsPaid became the first major crypto payment provider to offer a working solution with its Plug-and-Pay tool. It allows users to set up automatic payments from the CoinsPaid wallet to the most popular merchants that use CoinsPaid crypto processing.
“For example, players want to focus on the game, not on topping up their account. If you want to pay with crypto — as many iGamers do — this becomes a problem, because normally you have to keep monitoring your account balance and topping up when it goes down.”
“But, with Plug and Pay, you can instruct a blockchain wallet to deposit a set amount of crypto in the account whenever the balance goes below a certain value. We’ve already launched integrations for dozens of sites, and I expect recurring crypto payments to become a trend going forward.”
Wix Stores Merchants Can Accept Crypto
Wix is one of the most popular website builders in e-Commerce, with over 1.7 million live e-Commerce sites using Wix Stores. Starting from October 2021, all Wix merchants can integrate payments in Bitcoin, Ethereum, Litecoin, Dogecoin, Bitcoin Cash, Wrapped Bitcoin (WBTC), as well as XRP (in selected countries) and several stablecoins, including USDT and BUSD.
Meanwhile, the world’s largest e-commerce platform, Shopify, first implemented crypto support using plugins back in 2020, though it was up to each merchant to decide if they wanted to use the plugins or not. In August 2021, Shopify partnered up with Binance Pay to implement a payment bridge for Binance Pay users.
With major companies like Facebook FB, PayPal, Twitter TWTR, and Stripe getting more involved with crypto, the future of crypto payments seems brighter than ever. While Bitcoin and Ethereum may not be the best cryptocurrencies for small payments due to high fees, many others fit this purpose better, like Dogecoin, XRP, BNB, etc.
In addition, payment startups are working on new solutions to make crypto transfers easier and faster: examples include Strike’s Lightning Network implementation and CoinsPaid’s instant Bitcoin transaction confirmation tool.
“As the crypto market is heating up again, many new users are joining the market. For some of them, crypto is a long-term investment, but others will be willing to spend their coins to enjoy the gains. Of course, it would be too ambitious to expect that cryptocurrency will overtake credit cards or even PayPal in payment volumes, but it’s quite likely that 2022 will turn out to be the most exciting year for crypto payments yet.”
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