18 Nov Member Spotlight: BitPay
BitPay has its origins in the United States where it is headquartered in Atlanta, Georgia. The Utrecht-based European office launched its operations in the spring of 2014. Currently, the Utrecht office counts 6 employees. BitPay offers a payment gateway for online retailers where consumers can pay with Bitcoins. The online retailer is paid in its currency of choice by BitPay. Paying with the virtual currency Bitcoin has grown into a globally accepted payment method and the growing revenue figures of BitPay and its clients are the living proof of this success.
Pieter Poorthuis, Co-founder of the BitPay branch in the Netherlands, highlights the main reasons of their astonishing growth: “Our revenue numbers are doubling every six months. It is incredible but true. The core of our business is to make online paid services or products payable with Bitcoin. Another part (10%) of our services is Bitcoin pay-outs, for example for salary payments and marketplaces. Our growth is mainly coming from these two. Future growth is also expected via BitPay’s wallet and prepaid Visa card. Online services show increasingly more interest in Bitcoin payments because of its ability to receive payments from all over the world without additional costs, delay or chargeback risks.”
BitPay was founded in 2011 and currently has offices in Atlanta (HQ), San Francisco, Argentina and Utrecht. It was the first startup offering Bitcoin acceptance portals for merchants, a real pioneer in its field. In 2014 BitPay received USD 30 million in a Series A funding round led by Index Ventures, a record-breaking amount for virtual currency firms at the time. Now BitPay has evolved into a leading, full-service Bitcoin company processing Bitcoins for more than 60.000 merchants worldwide.
Pieter Poorthuis: “The current available online payment methods are very diverse and successful. But there is one very important aspect that can be a hurdle of receiving payments in “normal” currencies. Every currency is bounded to a country or region and its payment infrastructure. As a result, online retailers are unconsciously excluding some parts of their target groups. We have many clients offering very specific products through their websites and depend on a geographically diverse customer base.
Sometimes consumers cannot pay internationally anymore because their local government blocks certain payment methods. In June of this year, PayPal had to suspend its services in Turkey which affected thousands of consumers that suddenly could not pay through their method of choice. In June and the following months we had a surprising uptick in volume because of Turkish consumers.”
With Bitcoin, BitPay does not rely on traditional international payment systems like credit cards and PayPal. Compared to PayPal, which highly protects the consumers but putting a chargeback risk at the merchant, Bitcoin transactions are not reversible. Therefore BitPay shows high conversion rates in industries and countries where the chargeback rate is high. BitPay only charges retailers a processing fee of 1%, and retailers that use the services of BitPay are not required to store Bitcoins themselves and receive their revenues in the currency of choice. BitPay only processes Bitcoins and therefore sells incoming Bitcoins on worldwide Bitcoin exchanges.
Pieter Poorthuis: “We process payments for online video games (Steam), freelancers in Argentina, to physical gold dealers and regulated online gambling venues. In addition to the acceptance services, we recently launched an open source Bitcoin wallet application. Moreover, we partnered up with Visa to offer a BitPay debit card linked to Bitcoins and easy convertible into dollars. Bitcoin has a lot of potential to connect the online supply & demand on a global scale where normally e-commerce would not reach its customers. Imagine what impact Bitcoin could have on global trade if enterprises will massively adopt it. I foresee only good things in the future of Bitcoin service providers.”