A major building block in the widespread adoption of Bitcoin and other cryptocurrencies is making the technology accessible to both consumers and merchants. BitPay, a Bitcoin payment processor founded in 2011, has been widely successful in tackling the merchant half of that equation. BitPay handles Bitcoin payment handling for a number of major clients, including Zynga, Virgin Galactic, WordPress, Shopify, and Tiger Direct, along with more than 30,000 others, including a growing number of Bay Area restaurants.
In early May, BitPay completed its most recent round of venture capital funding, attracting 30 million dollars from a variety of sources, including Richard Branson and PayPal alum Peter Thiel, and becoming the highest-valued Bitcoin startup in the world.
The value proposition of BitPay is that it almost entirely separates Bitcoin from merchants. The platform automatically converts Bitcoin to USD, so from the perspective of the merchants, accepting a Bitcoin payment is identical to accepting a credit card or PayPal transaction, minus the risk of a chargeback. Users can elect to retain a portion of their fees in Bitcoin (up to 100%), but most choose not to, in order to avoid having to deal with the ups and downs of the market.
BitPay’s audience has grown dramatically over the last year, tripling from 10,000 client businesses to more than 30,000. BitPay hopes to increase that number to 100,000 by the year’s close.
The company now handles more than a million dollars’ worth of transactions each day – a far cry from PayPal’s $315 million, but significant in its own right. Although the bulk of their income comes from large online retailers like TigerDirect, BitPay has also gone to considerable lengths to push Bitcoin acceptance in brick-and-mortar stores, going so far as to organize “bitcoin fairs” in New York City where artisans, restaurants and businesses agree to sell their wares for BTC.
Right now, the future looks rosy for BitPay, and its employees are confident, too. Stephen Pair, the BitPay CEO, was interviewed on CNBC recently, and made the startling claim that, in an effort to modernize their outdated payment infrastructure, it was likely that credit card companies like Visa and MasterCard would wind up implementing Bitcoin technology to power their backend.
Pair quipped, “I think [bitcoin will arrive] a lot sooner than people imagine today. I think many of them are looking at it already.”