Crypto payments are becoming increasingly popular as Bitcoin (BTC) and other digital assets continue to go mainstream. This has become the case for both crypto holders and non-crypto owners who are primarily interested in the concept of using cryptocurrencies for payments.
Recent data has found that 93% of crypto users surveyed would consider making purchases in crypto. The report further revealed that 59% of consumers who don’t hold crypto would be interested in using it to make purchases in the future.
As such, it shouldn’t come as a surprise that major payment providers like Mastercard have been ramping up their efforts to support crypto payments moving forward. In addition, social media giants such as Twitter are also working to enable cryptocurrency payments through mechanisms like tipping.
Verifone launches crypto payments
It’s important to point out that online merchants and physical retailers must begin accepting crypto payments to ensure mainstream adoption. According to findings from Fundera, only about 2,300 businesses in the United States accepted Bitcoin payments at the end of 2020.
In order to advance this, Verifone — one of the largest point-of-sale providers in the world — announced today that the extension of BitPay’s blockchain payment technology will enable cryptocurrency transactions.
Mike Pulli, CEO of Verifone, told Cointelegraph that by the end of this year, merchants leveraging Verifone’s in-store and eCommerce Cloud Services platforms in the United States will be able to accept cryptocurrency payments. Pulli added that Verifone has been seeking alternative payment methods recently, and will now support crypto transactions due to the mainstream’s rising interest in cryptocurrency:
“We feel that having crypto available on our terminals will open up more options and opportunities for consumers, which is what Verifone aims to do. This opens up a currency that has never before been seen on a terminal and we want to be at the forefront of this trend.”
Although Pulli was unable to reveal which online and physical merchants will begin to support crypto payments, the company’s reach is substantial and will therefore likely have an impact on crypto payment adoption. To put this in perspective, Verifone operates 36 million point-of-sale, or POS, devices and has processed over 10 billion transactions, generating over $350 billion in volume per year.
Stephen Pair, CEO of BitPay, told Cointelegraph that while BitPay regularly enables merchants to process crypto transactions, Verifone is by far the biggest partnership to date: “Verifone customers are requesting to have crypto payments. This has become the case as there are millions of crypto users today that have blockchain wallets on their phones that they want to leverage.”
To Pair’s point, head of alternative payment methods at Verifone Jeremy Belostock told Cointelegraph that the company is witnessing a major shift in consumer behavior due to reasons such as the COVID-19 pandemic. Specifically speaking, Belostock noted that, more than ever before, consumers are trusting mobile wallets, looking at these as quick and easy payment methods:
“There has been a shift from having a credit card to having a trusted mobile app that consumers want to leverage for spending. We are tapping into this market to make crypto mainstream.”
As easy as using Venmo or PayPal, but for crypto transactions
Belostock explained that Verifone’s advanced payment engine designed to support crypto transactions functions the same as its terminals that accept Venmo or PayPal payments. The only difference is that both physical and online merchants will now be able to accept Bitcoin, Ethereum (ETH), Dogecoin (DOGE), Bitcoin Cash (BCH), Wrapped Bitcoin (WBTC), Litecoin (LTC), and five USD-pegged stablecoins Gemini dollar (GUSD), USD Coin (USDC), Pax Dollar (USDP), Maker DAO (DAI) and Binance USD (BUSD).
Moreover, the solution will initially support major wallets including Blockchain.com, BRD, Metamask and BitPay. Belostock further mentioned that when paying with crypto via a Verifone device, consumers will go through an easy process, similar to using a credit card:
“When a consumer goes to pay at a physical store, they will see the amount due and the screen will give them the different options for which crypto wallet to use. They will choose a wallet and a QR-code will surface. They will then scan the QR-code directly from their blockchain wallet and choose the cryptocurrency they want to pay with.”
From the merchant’s perspective, Pulli explained that accepting crypto payments via Verifone is the same as accepting another form of tender, noting that there is no added risk involved: “All that’s required from our merchants is a software update since they are connected to our cloud platform. Even though consumers are sending crypto from their wallets, merchants will only see their local currency.”
This is an important point, as Belostock shared that many of Verifone’s merchants have expressed concern about exposure to crypto’s volatility. “The big question here is if there is any risk involved,” he remarked. Yet, unlike other solutions that allow merchants to decide whether or not to accept crypto after transactions are settled, Verifone’s merchants must accept the U.S. dollar. “This is mainly because of the refund aspect, but it also protects against volatility,” said Belostock. He added that in the case of a refund, consumers will get their crypto back for the amount of their original purchase.
Will mainstream adoption follow?
While it’s clear that crypto payments are on the rise, some concerns remain that may hamper mainstream adoption in the United States.
On Sept. 24, for example, the People’s Bank of China, or PBoC, published guidelines to crack down on crypto activity throughout the country. These measures intend to “cut off payment channels, dispose of relevant websites and mobile applications in accordance with the law.”
Although this may impact crypto’s reach, Bill Zielke, BitPay’s chief marketing officer, told Cointelegraph that it's too early to tell what effect China’s measures may have in the U.S. or globally: “We do see positive growth and huge potential with the Verifone announcement today in the U.S. as another way for merchants to accept Bitcoin and 10 other cryptos, as well as for consumers who have crypto and are looking to spend.”
In addition to China’s recent crypto ban, both consumers and merchants could face a number of challenges when it comes to spending cryptocurrency. For example, accounting challenges tend to be a major concern for U.S.-based users. Yet, Pair mentioned that no tax implications will be present if users convert crypto to stable coins that can be spent on Verifone devices. He further pointed out that companies offering crypto conversion software like TaxBit are helping users report gains and losses directly from their wallets.
Moreover, accessibility could also create challenges for both merchants and consumers, as some crypto payment solutions require a number of steps in order for purchases to be made. For instance, Belostock mentioned that Verifone has seen competitive solutions where crypto must be transferred from multiple wallets and then converted to a gift card to be used for payments. While this may be, he remarked that the product that Verifone and BitPay have built should turn out to be simple and intuitive.