Serge: Can you tell our readers what Bitpay is and does? What is your perspective on Bitpay as a company?
BitPay is a payment processor for bitcoins. Essentially, we make it easy for merchants to accept bitcoin as a form of payment. BitPay has over 35,000 merchants worldwide with about 50% in the US, 30% in Europe and 20% in the rest of the world processing just over $1 million daily. Some of our biggest named merchants include Newegg, TigerDirect, ESPN, Virgin Galactic and the Sacramento Kings . We integrated with the most popular shopping carts and POS solutions including WordPress, Shopify and VisualTouch.
Serge: Some of our readers are small and middle sized business holders. They do see an opportunity and possibilities digital currencies have but they are a bit reluctant to commit. The security aspect is also one of their major concerns. Can you negate some of the fears these business owners have by explaining the services that Bitpay offers to them?
Bitcoin is a new technology and is still in its very early stages. As with anything new, we recommend that the user educated themselves on the benefits as well as the risks of using bitcoins.
BitPay is attracting online merchants who are selling low-priced goods where credit card fees are expensive and high ticket items (like jewellery, electronics and gold/silver) where chargebacks are becoming common. The ability for merchants to accept bitcoins makes these transactions irreversible and for the buyer the risk of fraud and identity theft is eliminated.
To help business mitigate risks, BitPay processes the transaction accepting the bitcoins from the merchant’s customer and letting the merchant know the order had been paid. If the item is priced at $10, the merchant receives $10. BitPay settles with the merchant the next business day and offers the merchant the option of depositing dollars (or one of 9 other local currencies: https://bitpay.com/bitcoin-direct-deposit) or bitcoins or a percentage split between the two.
Serge: What will the fee be that Bitpay will ask? What makes Bitpay different from the banks?
BitPay’s fee structure starts at 1% of the transaction and goes down from there. In the above example, the merchant sells an item for $10, BitPay’s fee for the entire transaction is 10 cents. We also offer a software as a service model where merchants play a flat monthly rate.
BitPay is a business to business firm, we do not offer consumer facing products.
Serge: Last week a couple of interesting developments happened in the digital currency world The first was the creation of the Chamber of digital commerce. What do you think about all of this? A step in the right direction or is it a bit too soon?
BitPay is all for companies and organizations that want to move Bitcoin forward. The creation of the chamber a step in the right direction and we support their efforts.
Serge: The other “important” thing that happened last week is the announcement of a proposal by Benjamin M. Lawsky, Superintendent of Financial Services at NY state. In that proposal nearly everything crypto related activities will be limited, such as providing financial services. Do you think this “proposition” would ever get approved? If so what would that mean for Bitpay?
For this question, Tim Byun, BitPay’s Chief Compliance Officer offered the following thoughts:
I. It is commendable that NY DFS and Ben Lawsky are supporting innovation while ensuring balanced regulations.
II. The proposed framework reflects DFS’:
· Strong understanding of the bitcoin ecosystem, including valuable services to consumers that would benefit from an emerging, efficient and cheaper payment system
· Strong understanding of Anti-Money Laundering/Anti-Terrorist Financing and Trade Sanction obligations, including existing Virtual Currency regulations and exemptions at the Federal level.
· Ability to leverage the Bank Secrecy Act and the significant resources that are already expended by the bitcoin ecosystem to comply with anti-money laundering and anti-terrorist financing requirements.
· Openness in setting a standard in the next 45 days that will likely be followed by other states.
III. BitPay welcomes the comment period for DFS to engage and receive feedback from the all stakeholders, including the bitcoinindustry.
· BitPay wants to ensure consumers and merchants have access to innovation, and the true potential for an efficient, cheaper, faster payment system
· BitPay and others may want to seek clarity on the following:
o VC Transaction Reporting – especially purchases over $10K per day could represent an unlevel playing field as purchases via credit or debit cards over $10K are not reported
o Identification for Large Transactions – whether transactions represent purchases of goods and services. This rule may be reasonable for exchanging of BTCs with fiat currencies and vice versa, at VC custodians; however, it may be unnecessary for purchases of goods and services similar to commerce today.
o Cyber Security Program – having sound security controls is paramount; however, the requirements of annual penetration test and others may inhibit further innovation, as smaller ecosystem entrants would face significant costs. The framework may benefit from a more risk based program or establishing nominal thresholds that would enable innovation while ensuring controls or transparency to protect consumers
Serge: You recently announced a new project of yours called Get Bit. Can you give our readers some information about what it does and why you created it?
One of the biggest challenges for the bitcoin market is acquiring bitcoins. We developed Get Bits as an easy way to get bitcoins through a Facebook friend.
Serge: The last question will be about the future of Bitpay. Nobody has a crystal ball to see how the future is going to be but can you possibly give your prediction on how you see where Bitpay will be a year from now? Do you have some projects in development that you can unveil a little bit?
Earlier this year we took in $30 million in funding and as a payment processor we are always looking at ways to acquire merchants and make it easy for them to accept bitcoin. This year our goal is to reach 100,000 merchants and offer tools to help them succeed with accepting bitcoin.