B2B Bitcoin Payments on the Rise
According to BitPay annual report, business-to-business payments have made up over 10% of the transactions the firm processed over the past 12 months.
According to BitPay’s annual report, business-to-business payments have made up over 10% of all transactions the firm has processed over the past 12 months.
Global merchant payment processor and bitcoin solutions provider BitPay released its annual report for 2015 in January. The BitPay researchers figured that the average B2B payment in 2015 was around US$2,500, 25 times higher than US$100 average consumer payment.
While many bitcoin startups set their focus on the utilization of the Bitcoin network’s ability to handle micropayments with robust security and low transaction fees, BitPay emphasizes the importance of business-to-business (B2B) payments across various industries.
PayPal and Banks: Inefficient
Traditionally, B2B payments include payments sent or received between two companies. Usually, these transactions that are substantially larger than average consumer payments are processed via bank transfer or conventional financial platforms like PayPal. However, the inefficiency of banks and financial platforms in processing payments often cause delays in payments for as long as 14 business days. More importantly, both PayPal and banks charge nearly 10% in total transaction fees, due to their high conversion and withdrawal rates.
In contrast, Bitcoin is an efficient financial instrument for processing large payments. Transactions settled on the Bitcoin network are instantaneous and the transaction fees for large transactions and micropayments are theoretically the same, although corporations and established firms tend to increase the miners fee for large transaction for faster approval and confirmation.
Utilization of Bitcoin
The BitPay team explained that businesses are beginning to recognize the evident advantage of using bitcoin in dealing with large payments over traditional means of payments. The Netherland-based firm saw a particular increase in international B2B payments, as companies from various industries such as law firms, technology startups and even freelancers have begun to use bitcoin to send and receive payments that are larger than the average consumer payment.
“A wide variety of businesses have already started to take advantage of billing with bitcoin, including media sites selling advertising, IT services firms, and legal and accounting services groups,” said BitPay co-founder and executive chairman Tony Gallippi.