Stripe has had a complicated relationship with crypto over the years, ending support for Bitcoin in 2018, calling the cryptocurrency less useful as a means of payment after initially supporting cryptocurrency in 2014. In October, the company began posting job vacancies to build a crypto team and added crypto VC Matt Huang to its board weeks later.
Stripe offers an exchange system between electronic money and fiduciary money. The company also offers a solution for crypto exchanges, or even NFT marketplaces. In its service, the company also offers fraud prevention systems, as well as a means of verifying identity.
The company’s re-entry into the space is a major threat to existing crypto payment processors that don’t have the company’s door tense.
Technology from Stripe, a company that specializes in online payments, allows internet companies and online marketplaces to accept credit cards for their products and services and disburse money to individuals and businesses selling on their platforms. It processes hundreds of billions of dollars in payments each year for millions of users, including consumer apps and websites such as Airbnb and The RealReal Inc. and business software vendors such as GitHub Inc. and Twilio Inc.
Investors see payments companies like Stripe as a way to get to grips with a basket of rapidly growing public and private tech companies, as Stripe’s revenue is tied to the growth of its customers. The payment services market is also expanding as more businesses migrate from physical stores to digital storefronts.
“Stripe is more than ever betting on the internet as an economic engine,” said Will Gaybrick, chief product officer at Stripe.
Stripe already powers a sizable portion of the web’s financial infrastructure, and is reviving support for crypto payments to give customers an easier path to onboarded Web3 users and interacting with cryptocurrencies.
In fact, Stripe was already supporting Bitcoin in 2014, after the cryptocurrency unit hit $1,000. However, four years later, the company decided to back down; in January 2018, it announced that as of April 23 of that year, bitcoin would no longer be supported on its platform:
At Stripe, we’ve long been excited about the possibilities of cryptocurrencies and the experimentation and innovation that come with them. In 2014, we became the first major payment company to support Bitcoin payments.
Our hope was that Bitcoin could become a universal, decentralized substrate for online transactions and help our customers enable buyers to access places where credit card penetration was less or in use cases where card fees credit were prohibitive.
Over the past two years, as block size limits have been reached, Bitcoin has evolved to become more of an asset than a medium of exchange. Given the overall success of the Bitcoin community, it’s hard to quibble about the decisions that have been made along the way. (And we’re certainly happy to see an ambitious new project do so well.)
This, however, led Bitcoin to become less useful for payments. Transaction confirmation times have increased significantly*; this, in turn, has led to an increase in the failure rate of transactions denominated in fiat currencies. (By the time the transaction is confirmed, fluctuations in the Bitcoin price mean it’s the “wrong” amount.) Also, the fees have increased a lot. For a regular bitcoin transaction, fees of tens of US dollars are common, making bitcoin transactions about as expensive as bank transfers.
Because of this, we have seen our customers’ desire to accept bitcoin diminish. And among businesses that accept bitcoin on Stripe, we’ve seen their revenue from bitcoin drop significantly. Empirically, there are fewer and fewer use cases for which accepting or paying with Bitcoin makes sense.
Therefore, starting today, we are ending support for bitcoin payments. Over the next three months, we will work with affected Stripe users to ensure a smooth transition before we stop processing Bitcoin transactions on April 23, 2018.
This decision by Stripe was made in a rather difficult period for bitcoin with values in particular plummeting in the months preceding the announcement. However, Stripe had also indicated that it would return to this market when conditions are better:
Despite this, we remain very bullish on cryptocurrencies as a whole. There are many efforts that we see as promising and that we can certainly imagine supporting in the future. We’re interested in what’s happening with Lightning and other proposals to enable faster payments. OmiseGO is an ambitious and clever proposition; more broadly, Ethereum continues to spawn many high-potential projects. We may add support for Stellar (to which we have provided seed funding) if substantial usage continues to grow. It is possible that Bitcoin Cash, Litecoin or another variant of Bitcoin will find a way to achieve significant popularity while keeping settlement times and transaction fees very low. Bitcoin itself may become viable again for payments in the future. And, of course, there will be more ideas and technologies in the years to come.
We will therefore continue to pay close attention to the ecosystem and look for opportunities to help our customers by adding support for cryptocurrencies and new distributed protocols in the future.
Also, four years later, the company announced a suite of products aimed at giving customers access to tools and APIs that allow them to more easily purchase and store crypto tokens, cash out, exchange NFT and manage compliance workflows like Know Your Customer (KYC). Stripe’s support page notes that the company’s products will allow users to purchase more than 135 cryptocurrencies with fiat currencies in 180 countries.
Stripe co-founder John Collison took to Twitter on Thursday to announce the new features.
With Stripe, cryptocurrency businesses can access the global financial infrastructure without the outdated requirements of traditional payment providers. Whether you’re an established cryptocurrency business or just exploring new possibilities, you can process fiat currency payments worldwide through a single integration with fraud prevention and optimization tools permissions.
Optimize your cryptocurrency business with scalable fiat payment APIs. Our payment platform is designed to increase conversion rates and minimize fraud at every step of the payment tunnel. Access streamlined payment flows, fraud prevention tools, sender optimizations and more, so you can focus on developing your next big thing.
electronic and fiduciary currency exchanges. Allow users in over 180 countries to deposit funds through dozens of local payment methods. With Connect, make transfers in fiat currencies in more than 45 countries
Wallets. Build decentralized financial portfolios and products by leveraging our Bank-as-a-Service APIs and Treasury and Issuing solutions to make managing your funds easier.
Places de march NFT. Allow any marketplace, whether specializing in art, valuable online gaming assets, or membership tokens, to grow and accept sign-up buyers and sellers in just a few seconds. With Stripe Identity, you can confidently verify the authenticity of identity documents issued by over 33 countries.
A toolkit for crypto businesses. Explore the possibilities of cryptocurrency with easy-to-use integrations for stablecoin transfers. When you’re ready, our flexible APIs can help you quickly launch your first NFT or crypto project, while meeting regulatory requirements, reducing fraud losses and securing sensitive data
Trusted solutions, now for the blockchain. Leverage Stripe’s global infrastructure and proven APIs to grow your business. With optimized user sign-up and dedicated cryptocurrency support, Stripe makes it easier to get you up and running by eliminating time-consuming questionnaires and cumbersome paperwork.
Along with the news, crypto exchange FTX announced that it is partnering with Stripe to improve its identity compliance features and fiat onboarding workflows for users: and we partnered with @stripe to integrate their automated identity verification system into our FTX system. Since then, KYC processing has been much faster, automated approval rates higher and the user interface smoother for our customers,” says its president, Brett Harison.
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