Cryptocurrency access has always been a thorny question. The existence of distributed ledger technologies (like blockchain technology) have made global access to the cryptocurrencies that incentivize these ledgers in one way or another.
However, due to the highly technical nature of these technologies, access for the average “Joe” or “Jane” has been virtually impossible.
Companies like BitPay though, are making cryptocurrency access possible. They have created a paradigm where this access has birthed all kinds of possibilities for cryptocurrencies and their underlying technologies.
BitPay recently celebrated its 10th anniversary (congratulations guys!). They have literally defined how cryptocurrency payment models should work. We reached out to Bill Zielke, BitPay’s CMO with questions. Here is what he had to say.
Bill Zielke, CMO BitPay
Congratulations on your tenth year anniversary! How has the journey been so far?
It’s been an amazing journey. BitPay was founded in June 2011 on a mission to enable every business to send and receive bitcoin and other cryptos as a form of payment. Specifically, we wanted to make it easy for businesses to accept bitcoin payments from anyone instantly, regardless of where they were in the world. Since 2011, we have become the oldest and largest blockchain payment processor in the world but our mission remains the same — make it easy for businesses to send and receive cryptocurrency.
What has been your greatest challenge when it comes to accepting cryptocurrency payments?
The greatest challenge is getting all large businesses to accept crypto as a form of payment. While 93% of consumers with crypto indicate they want to be able to spend it, many top businesses have yet embrace this new form of payment (pymnts.com study https://www.pymnts.com/cryptocurrency/2021/consumers-say-they-plan-to-use-cryptocurrency-to-make-purchases/). Many consumers are also not aware that they can spend their crypto or even how to do it. Education is needed to continue to get the word out, increase adoption and have crypto go mainstream.
How was the BitPay vision birthed?
Our co-founders Stephen Pair and Tony Gallippi were fascinated by bitcoin and blockchain technology and the many advantages after reading the Bitcoin White Paper. BitPay was very small, at that time, and bitcoin enthusiasts spent most of their time mining and trading bitcoin. Stephen and Tony realized bitcoin hodlers had nowhere to spend and so they developed a program to get businesses to accept bitcoin as a payment method. From this simple idea, BitPay was born.
What are your thoughts on the recent technology bans in developing Countries?
Developing countries need crypto the most. It improves trade with a more stable currency and enables those who hold it to have an asset that grows in value.
What do you think the future holds for cryptocurrency access?
Over the past ten years, we have seen massive positive change for bitcoin and crypto in general. Incredible technological improvements, usage, enhancement — to make it easier to acquire, store, trade and spend crypto. Further we have seen the development of new coins as well as using blockchain technology for non-financial industries like healthcare, smart contracts and supply chain.
How has BitPay been able to redefine the cryptocurrency payments industry?
Ten years ago, we saw the potential for bitcoin and blockchain to revolutionize the financial industry, making payments faster, more secure, and less expensive on a global scale. We defined the value of accepting bitcoin for merchants. To quantify the benefits to new businesses, BitPay worked with leading research and advisory firm Forrester Consulting to complete a case study entitled “The Total Economic Impact™ Of Accepting Bitcoin Using BitPay”. There are four main findings based on interviews with four merchants that accept bitcoin and other cryptos. First, up to 40% of customers that pay with crypto are new to the merchant. Second, purchase amounts are twice that of credit card purchases. Third, crypto is less expensive than card cards, and lastly, there are no fraud-related chargebacks. (https://bitpay.com/resources/forrester-report-says-bitpay-adds-new-sales-and-2x-aov/)
How has BitPay been able to tackle the volatility issue as far as cryptocurrency payments are concerned?
We set a reasonable time limit of 15 minutes once an order is placed to be paid with crypto by the consumer. This ensures the customer knows exactly how many bitcoins and satoshis are required for payment. As part of our service, the business can choose to accept fiat minus the 1% fee we charge for the entire process. Fiat is deposited into the business’ bank account the next business day. Because of our approach, merchants have zero price volatility risk.
Do you have any price projections for Bitcoin for the next one year?
Looking back over the 10 years, we have seen the price of bitcoin rise and fall. However, the trend is consistently upward. It is hard to predict what affects the value of cryptocurrency. The higher in value it goes, the more people spend on not just day-to-day items but also big-ticket luxury goods. This in turn increases the value because the crypto is being used. Recent investor and celebrity investments are also driving the price up. We would not be surprised to see bitcoin reach $100,000n in the next two years.
Just how big is the cryptocurrency payments industry? Do you have any numbers to show us?
While Bitcoin remains the most popular crypto used by consumers for purchases representing almost 72%, Ethereum has grown to almost 10%. https://bitpay.com/stats/ Both have strong perceptions as fast, secure and modern digital assets. And, both work very well as a payment option. Unfortunately, both have high fees during peak periods.
Additionally, the pymnts.com study we mentioned earlier found the crypto market is huge – $55 billion is the estimated value of purchases consumers will make using cryptocurrency in the next 12 months.
Why hasn’t the mass adoption of cryptocurrencies occurred yet? What can be done to ensure it comes quickly?
We believe the interest is there, but for first-time users getting crypto can be a challenge. Most people receive money through payroll, but few companies offer getting paid in crypto as an option. So, to help increase ease of getting crypto BitPay developed BitPay Send. It is a new mass payout service enables organizations of all sizes to pay employees, affiliates, customers, vendors, contractors and others with crypto.
Individuals like Elon Musk have had a life-sized influence on cryptocurrency markets. What do you think can be done to avoid these kinds of stunts?
It’s a tough question. On one hand, his comments propelled the market to look at crypto, but on the other he made many think twice. There are some misconceptions about the energy consumption around bitcoin. Bitcoin mining is becoming increasingly important to the energy sector and see energy companies using mining as a way to monetize excess energy capacity that they have. Think of a windfarm that has too much energy, they can mine bitcoin and earn revenue from that and change the economics of renewables. Bitcoin mining accelerates the adoption of renewables. Additionally, newer blockchains being developed today require significantly less energy consumption.
We also see people like Mark Cuban have a positive impact on crypto like with Dogecoin. Its low-cost and low fees make it an ideal crypto for purchasing lower cost items like games, coffee and online services. Since adding Doge to the mix of cryptos BitPay accepts in March, it has grown to almost 13% of all transactions.
Where do you see BitPay in the next ten years?
BitPay sees merchant and consumer adoption will continue to accelerate and more and more businesses and consumers will turn to crypto as a means of commerce and for transacting. We want to make it easy for businesses and consumers to use crypto and plan to continue to develop features and services to eliminate transaction fraud, reduce the cost of payment processing, and enable borderless payments in cryptocurrency.
In terms of market capitalization, just how big do you think the cryptocurrency space will grow? What do you think will be the magic number for cryptocurrencies?
Someday we expect to see all payments on the blockchain. As the market cap for all cryptocurrencies is at $2 trillion doubling where it was a year ago, we anticipate this growth to continue as more blockchains are added and more businesses and consumers adopt crypto.
Right now, we accept BCH, ETH, XRP, DOGE, DAI, WBTC and stable coins USDC, GUSD, PAX and BUSD in addition to BTC. Before we add a new coin, we review and test to make sure it will make a good utility for payments. We all don’t expect all new tokens will be created for payments as there are many being used for gaming or NFTs.
Please, can you tell us about BitPay’s international opportunities? What does the future hold for BitPay in this regard?
From the start BitPay has been a global company as blockchain payments have no borders. We do see a majority of interest with North American and European brands selling into new markets. We are seeing growing interest from Asia Pac and Latin America. We were encouraged to learn El Salvador is the first country in the world to name bitcoin a currency.
Please, can you give us highlights of your extraordinary journey? Can you tell us about the events that have shaped the way people use cryptocurrencies?
Like all start-ups we had our ups and downs, but it’s how we make the services we offer better. BitPay advocated in favor of Segwit when it was still being debated but waited to have it fully implemented. Segwit decreases the cost of sending transactions by up to 30% and when implemented, BitPay offered a fee estimation that can reduce fees by as much as 5%-10% over previous versions. The decision, driven by merchant feedback, puts control squarely back in the hands of those merchants to decide from which wallets they’ll accept payments and for consumers to use any wallet to make purchases with their favorite merchant.
What are the next set of things BitPay has in store for everybody? Care to spill the beans?
Consumer and business interest in crypto is exploding. We expect to see more mainstream brands and other celebrity influencers enter the space. We will continue to review and add coins, update our merchant processing, app and tools to make it easy for businesses and consumers to adopt crypto.
Do you think that the digital asset space is still a parallel universe apart from the regular financial universe that everyone else lives in? What are the reasons for your answer? What do you think can be done to ensure no parallelism exists?
For a long time it was, but now we are seeing financial institutions adopt crypto into their services and hold crypto on their balance sheet. Likewise, crypto vendors are looking to apply trust banks in order to offer a uniform regulatory framework.
How do you think Generation Z will ensure the mass adoption of cryptocurrencies? Please, can you give us practical scenarios for how this will occur?
Absolutely, this is cryptos target market. This group grew up with the Internet and are used to using technology for everything they do including banking and online purchase.
If you had three wishes and a genie that could make them come true, what would they be for BitPay at this time?
Crypto solves real pain points but most businesses can’t see past the negative hype. One of the biggest headache’s merchants, especially those merchants who sell high priced goods like jewelry and electronics, have today is chargebacks and for online merchants this headache is compounded with the added risk of identity theft and fraud. The promise of cryptocurrency provides transactional transparency as it is impossible to use the cryptocurrency for fraud as every transaction is verified, recorded and stored on the blockchain. One of the most critical elements about the blockchain technology is that when the transaction has been reported in the ledger, it cannot be changed. Further as a push transaction, similar to taking cash out of a wallet, the user sends the exact amount of bitcoin needed to pay the bill. This eliminates traditional credit card fraud and identity theft risks associated with credit cards. As a result, there are no chargebacks. It doesn’t help when hackers request ransom payments in bitcoin.
More governments could also adopt crypto as a currency as El Salvador has done. Often their own currency faces high inflation and using crypto, especially stablecoins pegged to the US dollar or Euro, can help to alleviate that challenge.
Clarity around regulations is key to moving the industry forward. Compliance with individual state regulations is a time-consuming and cumbersome process, as each state imposes unique requirements on essentially the same activities. Accordingly, operating under a uniform set of rules is expected to substantially reduce and consolidate compliance, legal and regulatory costs and operations.