To begin with, the service will work with an existing cryptocurrency provider in the US, the Paxos Trust Company. The firm was once a partner in Facebook's digital currency Libra , but became the first to pull out of the alliance, just a few months after it was announced. The scheme was controversial, attracting attention from financial regulators in several countries. Earlier this year, Facebook was reported to be "rethinking" the idea amid the resistance.
You can now buy a Tesla with bitcoin in the US - The Verge
How do crypto-currencies work? Cryptoqueen: How this woman scammed the world, then ran. UK government mulls Bitcoin regulation. Carney warns on crypto-currency 'mania'. PayPal pulls out of Facebook cryptocurrency plans. All could be stored "directly within the PayPal digital wallet", the company said.
Paying with crypto. But it is not PayPal's first venture into the area.
Related Topics. Facebook Cryptocurrency PayPal Bitcoin. More on this story. Published 12 February Published 20 October Published 7 March Published 25 September Published 24 November Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Bitcoin , the most popular cryptocurrency, has been dubbed by some as the secure money of the Internet. Using proper caution, one can make or receive payments to anyone without revealing any sensitive information linked to their bitcoin accounts or wallets.
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Other cryptocurrencies like Litecoin and Ripple are also seeing a surge in transactions. Riding high on the increasing acceptance of bitcoin and other virtual currencies, many businesses have started offering payment-related services that make and receive payments in crypto. This article explains how bitcoin payment services work, the advantages, associated costs that users should be aware of, and whether these services are a threat to the traditional fiat currency based payment systems.
In a nutshell, bitcoin payment services, or bitcoin merchant services, enable merchants and businesses to receive payments in bitcoins from individuals for the goods and services being sold or delivered. It works similarly to the processing of a standard credit or debit card payment service , with some specifics to bitcoins. For example, you visit a Walmart store to make a purchase, swipe your Amex or Visa credit card at the counter, and punch in the PIN number to make the necessary payment.
Similarly, you can make an online purchase at the Walmart website, and make the payment using the same credit card by entering the details on the payment page of the website. In both cases the in-store swipe machine or the online web portal , a payment service system works behind the scenes and enables authentication and processing of your credit card for making the payment. Bitcoin payment services work in a similar fashion. They act as an intermediary layer between the payer and receiver for processing of the bitcoin payments, which also involves recording the transaction on the blockchain public ledger.
They allow merchants to accept payments in bitcoins both online and at physical locations without the buyer or the seller worrying about the complex background process of bitcoin payments that gets executed in the background.
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All popular bitcoin payment services offer multiple mediums for merchants to accept bitcoin payments. They include solutions for various platforms, like integration with e-commerce platforms like Shopify, PrestaShop, and Magento; for payment through in-store point-of-sale POS systems, like Soft Touch and DC POS; and for direct payments from within the popular billing and accounting solutions, like Host Bill and Invoice Ninja.
One can also find solutions for accepting donations in bitcoins through such services, which include integration with donor services like NationBuilder and Targeted Victory. Essentially, anyone who signs up for bitcoin merchant services can start receiving bitcoin payments from the customers via any and all kinds of transaction mediums from across the globe. A bright kid in Ethiopia can develop a great Android app and receive bitcoin payments from global users using the bitcoin payment integrated with the Android software development kit; or a prominent restaurant in Venice, Italy can use the bitcoin payment-enabled Soft Touch POS to receive bitcoin payments from its patrons.
In terms of steps, the following workflow gets executed:. The bitcoin payment service instantly converts the received bitcoins into the currency of the merchant's choice, eliminating the volatility risk. One can even opt to get the bitcoins in their own wallet, instead of exchanging them for fiat currencies. The service also sends the necessary details in a secure manner to the blockchain network for the transaction to be authenticated and recorded on the public ledger.
Miners, who verify and add the transactions to the blockchain, receive a bitcoin miner fee.
This fee does not go to the payment service but is given to reward the miners for their work done for verification and authentication. Compared to a standard credit card payment, bitcoin payments purport to be relatively cheaper due to lower transaction costs. Bitcoin payment services claim to maintain transparency in the highly dynamic exchange rates between bitcoin and the fiat currency. Using such services, a merchant not only gets various mediums to accept global payments, but he also gets a reliable and authentic identity in the virtual world of cryptocurrencies, which is much safer, transparent, and dependable for getting payments.
The basics
Imagine being asked to make a direct payment to an individual bitcoin wallet, versus seeing the payment being processed through the network of an established payment service provider — a customer would find the latter more trustworthy to proceed with. That is the value-add a business gets from such services. BitPay is one of the early and popular offerings available in the U. Coinbase, a cryptocurrency exchange, also offers a merchant app for businesses for bitcoin payment services.
CoinGate, SpectroCoin, and CoinsBank are other leading players offering similar services in a variety of flavors to suit the needs of merchants and payers willing to deal with bitcoins. A settlement is available in a variety of fiat currencies by the different operators. It supports direct bank deposits in 38 different countries and bitcoin settlements in countries across the globe. Bitcoin and other cryptocurrencies have recently come on the radar of regulatory agencies and monetary authorities across the globe.
While many nations, like Japan and the U. For more, see Is Bitcoin Banned in China? However, the overall increasing acceptance of bitcoins is indicative of more and more global users willing to transact in them.