While an early supporter of Bitcoin, Stripe is now having second thoughts. As the following article reports, the payments platform will no longer accept Stripe as a form of payment on merchant transactions.
In addition to providing a payments platform for big clients like Lyft, Facebook, and Target, Stripe has been supportive of cryptocurrencies for several years. On Tuesday, Stripe reiterated its support for a viable digital currency, but said that bitcoin just isn’t cutting it. Going forward, Stripe will no longer accept bitcoin as a payment method.
In 2014, Stripe was the hot new startup claiming that it was going to make online payments simpler than PayPal. It attracted VC funds from the most influential players in the tech world, including the founders of PayPal. The company’s CEO Patrick Collison told Recode that Stripe would become the first major payments platform to accept bitcoin, in part, because of its universality. “Bitcoin is something that anyone can get ahold of,” he said at the time. He added, “It may or may not be important in five years.” In the meantime, Stripe has grown into a major force with a $9.2 billion valuation, and bitcoin seems more important than ever. But according to Stripe, it’s just not important as a currency.
Stripe seemed to take care to paint the overall Bitcoin project as a victim of its own success rather than imply that cryptocurrency is dead. The explosion of interest over the last year has sent the price of bitcoin up by more than a thousand percent, but it’s also slowed transaction times and increased costs considerably. This has led to infighting in the bitcoin community over whether or not to expand the software’s limits on block size. Bitcoin’s core developers have stuck to the old ways, holdout supporters are lobbying for integration of the Lightning Network that should speed things up, and opportunists have created spinoffs with faster transaction times. Stripe isn’t endorsing any of these options as the future, instead, it elected to congratulate bitcoin on its success as a “novel, ambitious project” that has done very well.
Cryptocurrencies are not close to reaching mainstream status in the world of payments. So it’s no surprise that Stripe is shutting the door on Bitcoin. The extreme price volatility and hefty transaction fees make dealing in Bitcoin a high-wire tightrope act without a net. Don’t expect this to change anytime soon.
Overview by Raymond Pucci, Associate Director, Research Service at Mercator Advisory Group
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