Crypto payments get a boost

Fintech giant Stripe just announced support for payments in cryptocurrency

Stripe is one of those companies which many people are unaware of, even though they use them all the time. It provides a lot of essential services for businesses though. First and foremost, Stripe is known for processing payments.

If you run an online shop, you can use Stripe to accept various types of payments. If you buy something online, you can use different credit cards and other methods to pay thanks to Stripe. In the background, the company handles everything. And now, they will also handle payments in cryptocurrency – a big step for crypto going mainstream.

So what’s up?

We'll explain:

  • What does Stripe actually do?

  • What is about to happen?

  • Why does it matter?

Let’s get started! 🤓

On 25 April, Stripe's co-founder John Collison took the stage at the company's developer conference. Following on from some other launches, Collison said that crypto is 'coming back to Stripe'.

The comeback reference was a reminder that Stripe already offered crypto payment integration many years ago. As early as 2014, it was one of the earliest providers to accept payments in bitcoin. In 2018, however, support was dropped for several reasons.

So why was this announcement big news for crypto? Let's look at Stripe to answer that.

What does Stripe actually do?

Stripe was founded in 2010 and has grown rapidly. In 2023, the company processed more than $1 trillion in payments. That was a 25% increase on the previous year, according to the company's annual letter.

As Stripe is not listed on the stock market, there are no detailed public figures. The numbers which are available suggest a healthy business though. For every payment Stripe processes, the company charges a fee 

That's the core business. Stripe offers companies a lot of flexibility. Customers pay with their preferred methods, Stripe takes care of the processing in the background. For the vast majority of businesses, that's a lot easier than integrating separate payment options individually.

When you're shopping online, it's useful because you get a lot of payment options. Whether these are processed by Stripe or another company doesn't really matter on the payment side.

Obviously some competitors offer similar services. Stripe has gained a huge market share in many countries due to some benefits though. It's easily scalable, offers a relatively simple integration and has global reach with lots of countries and currencies already supported.

What is about to happen?

Businesses which are using Stripe will soon be able to accept payments in cryptocurrency. To start, payments will be possible in the USDC stablecoin on different blockchain networks (Ethereum, Solana and Polygon).

When you're shopping online, you will be able to pay from your crypto wallet. The payment is then converted automatically so that the merchant receives 'real' US dollar (or another currency) into the Stripe account.

In a nutshell, you'll merely get an additional method of payment. It's another use case for crypto payments. Other blockchains and stablecoins will likely be integrated into this service as well, but that's not the main point.

Are there broader impacts?

In the short term, another method to spend a stablecoin is not going to have a major impact on the crypto industry. Overall, however, this move highlights that cryptocurrencies have at least the potential to disrupt the financial sector.

Stripe – as well as other payment processors – could lose a lot of market share when online shops offer a seamless integration of crypto payments. The technology isn't quite there yet, but it's not far off – and it would simply cut out the middleman.

Whether and when this potential will be realised depends not merely on tech though. Regulation is extremely important as well. Any responsible company executive has to look at developments very carefully when they could be a threat to your own core business.

The fact that Stripe has been busy to integrate its new feature seems like a sign that the company believes that regulation will pave the way for more crypto payments in the future. It might take some time but considering the regulatory efforts around the world at the moment it's definitely not an unrealistic outlook. Stripe wants to be part of the conversation, not just a footnote.

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That’s the end for today! 😢

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