In the previous post in this series, we covered bitcoin payment processes.
This two part article profiles some leading or well known providers in these two payment categories – Payment Service Processors (retail purchases and recurring payments) and Remittances.
Leading Payment Service Providers - Growth Opportunities & Challenges
The Payment Service Processor (PSP) segment is facing a conflicting situation – adoption is growing as businesses sign-up daily. But transaction turnover lags in terms of value, forcing payment solution providers to scale down or diversify.
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| Map Source: https://coinmap.org by Satoshi Labs |
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| Merchant payments are one and perhaps the smaller of bitcoin daily payment volume (source: blockchain.info) which has averaged between 100-150 million USD in 2016 till date. In comparison, Paypal, global payments leader which also accepts bitcoins, processed 1.4 billion payment transactions worth $82 billion in fourth quarter of 2015. |
US based BitPay and CoinBase are the largest bitcoin payment processors as of 2016. Other leading providers include Singapore based GoCoin and Denmark based Coinify.
We start with BitPay, leader in the PSP space and profile them in some detail. All PSP's offer capabilities similar to BitPay for the payments segment, with each competing on merchants or retail segments, offering their variation of wallets and provided services related to other products in their portfolio (exchanges for example).
BitPay
Among the numerous bitcoin payment start-ups, four-year-old BitPay is becoming synonymous with bitcoin payment processing, and is sometimes called the PayPal for bitcoin. BitPay was founded in June 2011 by Stephen Pair and Antonio Gallippi. The company is headquartered in Atlanta, USA and has operations in Netherlands and Argentina.
BitPay has created a full service payment product portfolio. Their solutions include POS terminals, supporting pricing in 150 currencies, settlement in local currency and option to split payments between bitcoins and fiat. BitPay integrates with 14 ecommerce platforms including Shopify and PayPal and offers plugins for popular shopping cart applications such as WooCommerce.
BitPay’s flagship offering is their global payment services platform. BitPay’s website and blog tracks and publishes payment adoption rates and major partnerships regularly. Their article “Understanding Bitcoin’s growth in 2015”, mentions that 60,000 merchants had signed up their services by February 2015 and about 100,000 invoices were being processed monthly through BitPay by November 2015.
BitPay offers merchant services in three tiers from a starter plan with zero transaction fees up to a $1000 daily threshold and upto 30 transactions monthly for new merchants. There are increasing transaction fees for two more tiers with increasing level of service including account management offered for Enterprise customers.
BitPay also reports new use cases for their platform - for example professional service providers who accept international payments, use the platform as a cheaper, faster and safer alternative to accepting international credit cards or bank transfers.
Apart from purchases, BitPay also provides solutions for recurring payments including a payroll API. BitPay has also partnered with Libra tax to provide accounting and tax support for bitcoins.
BitPay has also expanded the reach for bitcoin payments by partnering with other payment platforms such as Ayden and Ingenico. Ayden is a global payments company that counts Uber, AirBnB and Spotify as clients. Jagex, a mobile gaming provider has started accepted bitcoins through Bitpay’s integration with Ayden. Ingenico is a French payments processor and worldwide leader in POS terminal. BitPay’s integration with Ingenico extends their reach to over 27 million retailers who use their POS solution.
Despite the reach and breadth of payment solutions offered, as well as an impressive customer sign-up rate, BitPay has faced problems and is changing/expanding their strategy towards mainstream bank tech.
However, BitPay does not stop at payment processing alone.
Bitcore a full node with Javascript development environment was released as an open source project in 2014. Bitcore is available for developers to build their own apps for the Bitcoin network.
BitPay’s bitcoin wallet Copay, one of the projects built on Bitcore debuted in 2015 and is the only wallet on windows mobile. Starting January 2016 Bitcore is also available on Microsoft’s blockchain as a service platform on Azure.
Coinbase
CoinBase, the dominant US start-up in all things bitcoin, is BitPay’s competitor in payment processing. Coinbase also offers a wide variety of merchant tools and API integration. Coinbase does not charge fees for bitcoin payments and the first 1 million USD also has zero fees. Higher values or volume attract upto a 1% transaction fee.
Coinbase’s clients include Expedia, Dell, Overstock and Intuit.
GoCoin
Singapore based GoCoin is the third largest payments processor behind BitPay and Coinbase. GoCoin provides international payment gateway and merchant solutions for bitcoins, litecoins and dogecoins.
While BitPay diversifies into other products and into banking tech, GoCoin has adopted a different strategy – to incentivize more credit card users to switch to crypto payments and increase mainstream adoption.
GoCoin made news recently by merging with Ziftr, an ecommerce solutions provider with its own brand of alt-coin. As per their blog, the merged entity will bring to market ziftrCOIN digital coupons with GoCoin platforms, offering an incentive for mainstream users to make purchases with cryptocurrency instead of credit cards.
Coinify
Denmark based Coinify is one of Europe’s largest bitcoin payment processing platform with services available in 34 EU countries and most recently, South East Asia as well. Coinify supports 17 different blockchain currencies.
Coinify has funding including a multi-million dollar capital injection from SEED Capital (the Danish Government). Coinzone acquired Bitcoin Nordic, a bitcoin exchange, in 2012 and Copenhagen based BIPS (Bitcoin Internet Payments) in 2014. BIPs included an international payment gateway protocol and merchant services which moved to Coinify. Coinify acquired another Europe based payments processor Coinzone last year, a reflection of its strategy to scale through existing payment networks.
In the next article, we cover bitcoin based remittance platforms.
In the next article, we cover bitcoin based remittance platforms.
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