Global online payments firm Stripe announced yesterday that it was phasing out its option to pay in Bitcoin. Any of its customers who are still accepting Bitcoin will have until April 23rd. Stripe say they will “work with affected Stripe users to ensure a smooth transition before we stop processing Bitcoin transactions”.
Stripe provides payment options to clients like Deliveroo and lyft and was the first major payment platform to take Bitcoin. Their team hoped that Bitcoin would “become a universal, decentralized substrate for online transactions” and bring in new customers from areas where credit card ownership was low, or the transfer fees high.
Unfortunately, Bitcoin has not developed in the way Stripe developers had hoped. Bitcoin is now, “better-suited to being an asset than being a means of exchange”. It is becoming less and less suitable as a way of paying for things as the fees rise and transaction times lengthen. Transaction time is particularly important when combined with Bitcoin’s price volatility. As Stripe’s Tom Karlo says, “by the time the transaction is confirmed, fluctuations in Bitcoin price mean that it’s for the ‘wrong’ amount.”
Paying with Bitcoin Doesn’t Make Sense
All this has led to fewer of Stripe’s customers wanting to accept Bitcoin, and those that still do have “seen their revenues from Bitcoin decline substantially”. Right now, “there are fewer and fewer use cases for which accepting or paying with Bitcoin makes sense.”
Despite their decision the Stripe team says that they are, “very optimistic about cryptocurrencies overall” and mention that they are excited about developments such as the Lightning Network which may go some way to solving the speed issues on the network. Stripe is a seed investor in Stellar and may add support for their cryptocurrency “if substantive use continues to grow”.
Last month the videogame marketplace Steam made the same decision for the same reasons and stopped accepting Bitcoin payments. Long transaction times were leading to customers paying the wrong price, and high fees were making purchases too expensive. As they outlined in their announcement, “transaction fees that are charged to the customer… have skyrocketed this year… $20 a transaction last week (compared to roughly $0.20 when we initially enabled Bitcoin)”.