Although bitcoin adoption can move at a snail’s pace, businesses are seeing sustained traction in cryptocurrency payments, regardless of market declines.
According to BitPay marketing manager Bill Zielke, the payment processor facilitated a volume of one billion dollars in cryptocurrency transactions in 2019 , with bitcoin transactions leading the group. Similarly, a Coinbase representative said that Coinbase Commerce processed a value of USD 135 million in cryptocurrency payments for hundreds of businesses in 2019, representing a 600% growth in the number of unique transactions processed through that platform. compared to 2018.
The cryptocurrency ether and various stablecoins constitute a small percentage of the totals mentioned above, and according to a Chainalysis report it is estimated that in 2019 an approximate USD 4 billion was sent through payment processors only in bitcoin . Because of this, Coinbase is looking to develop its services for businesses by 2020.
Of course, the amount of payments to businesses with credit cards is much greater, which minimizes the purchase power of USD 4 billion in bitcoin. In 2018, the volume of purchases with credit cards was USD 3.7 billion, according to a 2019 report from the U.S. Office of Consumer Financial Protection.
“In 2020, we are super focused on providing a complete experience to the merchant with business functions, and keys to their better understanding, improvements in service to other geographical areas with internationalization, with the addition of more currencies, and with construction of transparent integrations for users who drive other Coinbase products, ”said Coinbase engineer Sahil Amoli.
Among the consumer-facing companies, Fold CEO Will Reeves said his shopping application processed more than 2,000 purchases during the 2019 holiday shopping season, of which 80% were transactions through the Lightning Network. “Amazon, Starbucks and Sephora were the most awarded brands by Lightning users,” Reeves said.
Last week, another option for merchants, known as Strike de Zap, was also launched, an application that allows payments with US dollars through the Lightning Network .
Are businesses ready for bitcoin payments?
Considering all the factors, there are plenty of reasons to be cautious about optimism about the use of bitcoin beyond speculative commerce in 2020. However, Lola Luna Boutique owner Jean-Michel Daumas, one of Coinbase Commerce’s clients who runs a luxury lingerie business in Paris, warned that it is still too early to describe bitcoin payments as a routine or a trend.
“People are not ready to make payments with cryptocurrencies. They prefer to keep them instead of spending them, ”said Daumas. “I prefer to receive payments in cryptocurrencies because it’s safer for me. For example, when I receive payments through PayPal, some people cheat and say they didn’t receive the merchandise. ”
Daumas said his boutique received more than 90 payments in bitcoin since the beginning of 2018, and never more than four payments in bitcoin per month. Its clients are 80% men spending bitcoins in lingerie as a status symbol, an introspection that matches the findings of BitPay, which indicate that jewelry, precious metals and high-tech products are the ones that accumulate the most bitcoin buyers .
“It is a very high level fabric in the field of haute couture,” he said. “For example, we sell a lot more during the Christmas holidays, which has much more influence on the sales trend of businesses than the price of bitcoin.”
In fact, Lola Luna is best known for statement pieces as an open thong with hanging feathers to stimulate sensitive areas. Perhaps, some buyers choose to pay with bitcoin so that a set of “bare bra” and lace collar do not appear registered in their credit card account. However, given the French culture around lingerie, Daumas said it is “too early” to conclude why some buyers prefer to use bitcoin when making payments to merchants.
For a broader context, Zielke, of BitPay, said both Europe and the Middle East are generally home to the most valuable business transactions, since there are more US buyers there, in terms of unique transactions. Meanwhile, Daumas prefers to transfer the earnings in bitcoin to a hardware wallet and keep them there.
“Because I have always been interested in technology, I was one of the first lingerie boutiques worldwide on the internet. I remember it was very difficult to build a website, ”said Daumas. “And it’s the same with cryptocurrencies, that’s where we are currently.”