Earlier today (27th March), San Francisco-based online payments provider Stripe made a game-changing announcement, revealing that it is now testing bitcoin support with online data backup service Tarsnap.
The big picture implication of the move - that online bitcoin merchants would have yet another potential processing partner to choose from - was clear. However, many questions about the specifics of exactly how Stripe - which has traditionally focused on making online credit card acceptance easier - would adapt its service remained unanswered.
Now, Stripe has provided new details.
In a Q&A with CoinDesk, Christian Anderson, Stripe's lead bitcoin engineer, provided more information about the program, which he said will find Stripe taking bitcoin on behalf of merchants, then exchanging the digital currency for whatever fiat currency customers prefer.
Most notably, Anderson indicated that Stripe's beta test has a long-term focus.
"This is a long-term investment for us. People selling online aren't going to shift all their sales to bitcoin overnight, or even in the next few months. There's some education needed on what accepting bitcoin means and what the advantages are.
We also need to make the consumer buying experience better. That'll take time."
Speaking to CoinDesk, Anderson addressed a number of subjects, including the most recent IRS ruling that bitcoin would be treated as property, how Apple might react to the mobile payments implications of its decision and whether Stripe sees itself as a competitor of companies like Coinbase.
Said Andreson on the latter subject:
"We would like interoperability to be the winning path, and we want to support the ecosystem. Think about a South African consumer using their Coinbase wallet to buy services from a German Stripe merchant. That's a very cool world to live in."
Read excerpts from our Q&A with Andreson below:
CoinDesk: How will Stripe set the exchange rate on bitcoin transactions?
Christian Anderson: We peer directly with several existing companies, and they in turn peer with many markets. The exchange rate for a given transaction is set by one [of] the partners who exchanges that transaction. In the implementation, Stripe does not make money off of spread. Our goal is to find the best exchange rate for our merchants.
How will Stripe hedge its risk to cope with bitcoin's volatility?
Anderson: Stripe users will not handle Bitcoin directly and Stripe will not hold Bitcoin on behalf of its merchants.
We have partnerships with multiple entities that convert Bitcoin to currencies immediately. This mitigates volatility for Stripe and its merchants.
Will you be building bitcoin support into the mobile app, and if so for which platforms?
Anderson: Stripe has SDKs for web, mobile web, iOS and Android. These SDKs give merchants a range of flexibility over how they take payments: they can drop in Stripe Checkout, or they can build their own payment form from scratch. Bitcoin will be available across all these SDKs.
Do you anticipate any pushback from Apple, which has been traditionally censorious when it comes to bitcoin apps?
Anderson: Fundamentally, we have to wait and see what rules shake out in iOS
apps. Plenty of Stripe merchants - like Lyft, Postmates and Grindr - accept credit card payments from within mobile apps, so we hope that bitcoin won't be treated too much differently.
Much of the furor has been over *wallet* apps rather than apps that accept Bitcoin payments.
Will Stripe's app support the new payment mechanism released in Bitcoin Core 0.9.0?
Anderson: If this refers to the Payment Protocol (BIP 70) [then] yes. Stripe is very enthusiastic about the Payment Protocol and will support it and encourage its adoption.
How will you cope with the inability to revoke (charge back) transactions with bitcoin? Will this be a problem for merchants or customers?
Anderson: As we do today, Stripe will monitor all of its merchants for fraud and other malicious behavior.
Have you any reaction to this week's IRS announcement regarding bitcoin? Does it change your operations materially?
Anderson: First off, the ruling doesn't affect merchants using Stripe to accept BTC. Merchants never take possession of any Bitcoin and are paid out in dollars, so they should not be affected by the IRS's decision to treat Bitcoin as property.
It's too early to say how the ruling will affect Bitcoin adoption overall, but our general feeling is that it contributes to its legitimacy.
Will there be an option to deliver bitcoin directly into a merchant's account, rather than handling the conversion immediately and sending them fiat?
Anderson: We haven't seen as much demand for this, so it's not on our roadmap yet. That said, our mission is to build better payment infrastructure for the Internet, so we would find Bitcoin payouts exciting inasmuch as they help us achieve that.
Additional reporting provided by Danny Bradbury.