$30 Billion Online Merchant Processor Digital River Adds Bitcoin Payments
UPDATE (18th June 15:00 BST): Updated to include information on Digital River's bitcoin pricing policy.
Commerce-as-a-service solutions provider Digital River – a company that processed more than $30bn in online transactions in 2013, has announced that it has added bitcoin as a payment option for its online merchants.
The offering is now available to merchants using the Minnesota-based company's SWREG solution for small and mid-sized businesses.
Notably, Digital River said it is seeking to allow customers to take advantage of the savings bitcoin can bring to international transactions, indicating it now sees bitcoin as one of a number of competing options for this use.
The company stated:
"Bitcoin will now be available along with other international payment options, such as credit and debit cards, wire transfers, bank transfers and third-party wallets."
Founded in 1994, Digital River is one of the first more traditional online payments businesses to embrace bitcoin. In addition to facilitating e-commerce, Digital River also offers site design, development, web store hosting, order management and fraud prevention, in addition to a list of other services.
Digital River clients include personal computer accessory specialist Logitech, subscription music streaming service Spotify, Internet security software provider Trend Micro and game developer Ubisoft, among others.
The formal partnership with California-based bitcoin merchant processor Coinbase follows Digital River's January announcement that it would seek to integrate bitcoin payments into its product offerings in 2014.
Bitcoin a 'game-changer'
Speaking to The Wall Street Journal, Souheil Badran, vice president and general manager at Digital River, indicated that he believes bitcoin is more than just a fad, and that his company's decision to accept the digital currency is a validation of this sentiment.
Badran told the media outlet:
“We see it as something that is here to stay, even if people are seeing it as just a payment method in general. But for me it is a game-changer.”
SWREG was previously the product of an independent, Minnesota-based payment processing company of the same name. It was purchased in 2005 and now operates as a subsidiary of Digital River, according to Businessweek.
Tom Peterson, executive vice president and general manager of commerce at Digital River, said that the decision will allow its customers to access the benefits of bitcoin without the risks of some of its more well-known drawbacks.
For example, Peterson noted that merchants who have been eager to test out bitcoin payments can now avoid the currency's price volatility through Digital River, stating:
"This business model creates an opportunity for our customers to offer payment solutions that may be in earlier stages of adoption in their domestic markets."
Fee pricing unknown
Notably, at press time, Digital River did not provide information on any fees it would charge merchants for accepting bitcoin transactions through its offerings.
Other merchant-focused e-commerce solutions – such as those provided by Square and Stripe – have drawn criticism from the bitcoin community for charging merchant fees comparable to traditional payment products for bitcoin services.
A spokesperson for Digital River later confirmed that its pricing policy will not differ from other payment options, saying:
"There is no separate pricing for bitcoin. Bitcoin is being offered just like any other payment option through our small to mid-sized commerce solution."
According to the company's SWREG pricing chart, Digital River offers merchants two plans, meaning they could be charged 2.9% of each transaction plus $1 or 0% of each purchase plus $.99 depending on their choice of enrollment.
Online merchant via Shutterstock
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