Stripe Returns To Bitcoin Payments After Four-Year Hiatus

May 30, 2022
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US fintech Stripe has returned to the bitcoin payments space after a four-year break, following the launch of its Stripe Apps Marketplace.

US fintech Stripe has returned to the bitcoin payments space after a four-year break, following the launch of its Stripe Apps Marketplace.

Stripe has announced that it will be supporting bitcoin payments again using the Lightning Network, a second-layer solution that claims to make bitcoin payments fast, frictionless and almost free to use.

The news follows the launch of Stripe Apps, a marketplace for third-party developers to build and publish apps for use either within their own company, or within the millions of businesses that use Stripe.

One such app will be provided by OpenNode, a company that specialises in building Lightning Network payment tools.

OpenNode’s new web-based app will allow Stripe merchants to convert incoming payments into bitcoin in real time, either automatically or on demand.

Once the OpenNode app has been installed, merchants will be prompted to connect to their bank using the Stripe ACH Direct Debit Payments API.

Stripe users will then have two options for converting incoming payments into bitcoin: (1) real-time, automatic conversion of a fixed percentage of each incoming Stripe payment to bitcoin, or (2) on-demand bitcoin conversions.

For each bitcoin request, OpenNode will initiate an ACH Direct Debit from the connected bank account.

From the Stripe Dashboard, users can then transfer bitcoin instantly and for near-zero fees to their designated bitcoin wallet using the Lightning Network.

What brings Stripe back to bitcoin?

The solution offered by OpenNode now seems light-years away from Stripe’s previous experience with bitcoin payments.

In 2014, Stripe became the first major payments company to support bitcoin payments, but by January 2018, it was forced to admit that high fees and slow transaction times made it unviable as a payment method.

Tom Karlo, then product manager for global payment methods at Stripe, wrote in a company statement that bitcoin had evolved to become “better-suited” as an asset than as a means of exchange.

Increasing transfer times, failure rates and costs made it increasingly impractical as a payment option.

“By the time the transaction is confirmed, fluctuations in bitcoin price mean that it’s for the ‘wrong’ amount,” noted Karlo at the time.

Karlo nevertheless left the door open, saying that Stripe remained “very optimistic” about the potential of cryptocurrencies and, in particular, the Lightning Network and other proposals to enable faster bitcoin payments.

“Bitcoin itself may become viable for payments again. And, of course, there’ll be more ideas and technologies in the years ahead,” he said.

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