BIPS is a two-year-old payment processor cited by Crunchbase as the largest provider of bitcoin payments in Europe. The Copenhagen-based firm, founded by Kris Henriksen, had been using Mt. Gox to convert between fiat currency and bitcoin. It threw in the towel with Mt. Gox early this week, explaining that the number of sell orders is increasing as merchants embrace bitcoin payments. Mt. Gox continues to be slow processing withdrawals, and is having problems keeping up, BIPS explained.
Henriksen refused to provide statistics about the company's bitcoin processing volumes, or growth rate, other than to say "quite a few," and "very quickly". But it does depend on a steady flow of conversion between bitcoin and fiat currency, he explained.
Dealing with Mt. Gox was becoming increasingly unworkable, he told CoinDesk. Withdrawal times were the biggest bugbear. "In BIPS' case, each withdrawal had a pending period of over eight weeks. This was devastating on BIPS’ fiat buffer, as we process withdrawals in 1 to 5 business days,” he complained. Conversions between bitcoin and fiat currency is a basic business need for a payment processor.
Bitstamp has promised to do it more quickly, and Henriksen expects this to happen in less than eight weeks.
The news just seems to get worse for Mt. Gox, and better for Bitstamp. The incumbent exchange has been losing market share following a series of technical and regulatory problems that have seen account seizures. This week, trading volumes on Bitstamp climbed above those on Mt. Gox for the first time.
The BIPS defection may be more of a symbolic win for Bitstamp, and unlikely to boost market share significantly for the exchange, though, Henriksen says. “However, in the long run it would probably benefit both of the companies. And as I met the Bitstamp team in San Jose, I am more inclined to trust them than Mt. Gox.”