News
Stripe Restores Cryptocurrency Payments, Citing ‘True Utility’
Cryptocurrency payments have traditionally suffered from a pervasive “cold start” problem.
Between other issues hindering the integration of blockchain-based digital assets as a payment mechanism, many potential customers simply do not own any cryptocurrency and therefore cannot use it to make transactions.
And this doesn’t really incentivize merchants to embrace crypto payments as an offering.
But with the news last Thursday (April 25) that Stripe rejoins the cryptocurrency payment space After a six-year hiatus, the adoption of cryptocurrencies as a mainstream payment mechanism is a priority for businesses and merchants across all verticals.
“Cryptocurrencies are back,” Stripe president and co-founder John Collison said in a company keynote entitled “The Future of Payments”.
“We are thrilled to announce that we are bringing back cryptocurrencies as a way to accept payments, but this time with a much better experience,” he said. She saidexplaining that Stripe will begin supporting global payments via stablecoins this summer, with transactions settling instantly on-chain and automatically converting to fiat.
Band exceeded one trillion dollars of total payments volume in 2023, and the company’s re-entry into the cryptocurrency payments market could be seen as highlighting the emerging potential for broader acceptance and integration of digital currencies into the payments industry. By focusing on stablecoins like USDC, Stripe aims to mitigate the volatility risks associated with cryptocurrencies, addressing one of the main barriers to their adoption as a payment mechanism.
To know more: Would you sell your house for Bitcoin? People do
Making transactions more efficient, secure and inclusive
Stripe was one of the first major payments providers to embrace early support for Bitcoin, which it did in 2014 before discontinuing its cryptocurrency offerings just four years later in 2018.
In ending such support, the company cited technical factors such as lengthening transaction confirmation times, an increasing failure rate, transaction fees so high that they are typically as expensive as bank transfers, and the resulting decrease in demand for both by Stripe customers and retail customers.
But now, “cryptocurrencies are finding real utility,” Stripe’s Collison said during his main speech. “As the speed of transactions increases and costs decrease, we see cryptocurrencies finally making sense as a medium of exchange.”
This follows the news that Telegram messengerthe fourth more popular messaging app by monthly active users after Meta Whatsapp, WeChatAND Facebook Messengerannounced that it was focusing on crypto payments for its advertisers and cryptocurrency payments for content creators on the messaging app.
Like PYMNTS did coveredwhile cryptocurrencies have success as an unregulated store of value, as well as a tool for scammers — digital assets have yet to solve the essence on which bitcoin itself was originally founded: serving as a form of payment for goods and services.
With cryptocurrency, “a lack of familiarity can lead to a lack of comfort, which will happen they often drive to the lack of adoption”, Ajay Rajanivice president of expansion and cryptography at Talahe told PYMNTS.
PYMNTS examined the benefits of cryptocurrency payments last month in a conversation with Brad Chasehead of liquidity products at enterprise crypto solutions company Ripplewho pointed to studies showing a cost reduction of up to 70% by switching from traditional binaries to cryptocurrencies.
“Cryptocurrencies are a digital native global resource,” Chase told PYMNTS. “And if you think about this new segment of digitally native, tech-savvy customers that is emerging, they hold cryptocurrencies and want to use them for payments.”
PYMNTS Intelligence in 2023 Report, “Credit Union Innovation: Bridging the Cryptocurrency Gap”, a collaboration with PSCUshows that just under 1 in 3 US consumers own cryptocurrency (31%), and those who do tend to take it into consideration when making a variety of financial decisions.
to know more: Cryptocurrencies continue to serve as a case study in behavioral economics
Embedded crypto payments seek to alleviate integration friction
Digital asset advocates believe that using cryptocurrencies for payments offers the benefit of faster settlement of transactions than many traditional methods, as well as offering buyers an attractive and real-world outlet for their cryptocurrency holdings.
Stripe is positioning its cryptographic capabilities as an easy way to embed cryptocurrency purchases directly into a payment flow.
PYMNTS Intelligence found that to be positive payment experience keeps customers coming back to a merchant.
As Stripe’s President of Product and Business It will be Gaybrick said PYMNTS’ Karen Webster in a June interview, consumers often leave before transaction is done if they have to struggle with drop-down menus, entering card details and expiry dates,
“We intelligently ‘sort’ payment methods based on which ones are most likely to convert for that session and for that consumer,” Gaybrick said at the time.
