SumUp Brings No-Fee Bitcoin Transactions to European Merchants

Pete Rizzo
Nov 6, 2014 at 18:35 UTC
Updated Nov 6, 2014 at 21:42 UTC

SumUp

SumUp has integrated bitcoin into its mobile point-of-sale (mPOS) solution, allowing merchants across Europe to offer the payment option without paying any transaction fees through 2015.

Enabled through an integration with BitPay, SumUp boasts that it now provides the first mPOS solution powered by its bitcoin payment processing partner in Europe. In turn, BitPay framed the partnership as the latest evidence it will reach its target of enlisting 1 million merchants on its platform by 2017.

Speaking to CoinDesk, Marc Christ CSO and co-founder of SumUp emphasized that the decision is one that finds the mobile payments company embracing a broad array of new and alternative payment solutions, from bitcoin to Apple Pay.

Christ said:

“We really want to enable our merchants to accept all kinds of payments. There’s a lot of new payment options out there, but we saw that bitcoin is probably the most advanced at the moment, so we decided to first to learn how bitcoin can enable interaction between the consumer and the merchant.”

Launched in 2011, SumUp has raised $33m in investment to date, allowing it to compete with the number of European mPOS solutions, including iZettle and Payleven, that have proliferated in the wake of Square‘s international success.

SumUp said it has no plans to introduce fees on the service until the end of next year, but that such costs could be added at a later date.

“We will evaluate the need for fees, but they might very well stay at 0% also thereafter,” Christ explained.

Keeping costs low

Existing SumUp merchants interested in adopting the new payment method can now opt-in to the service.

At checkout, customers are presented with a bitcoin QR code, which then allows them to select a wallet for payment. SumUp uses BitPay’s instant confirmation tools, so that merchants can settle payment in just a few seconds, the company said.

“BitPay calls our back-end and our back-end connects with the merchant apps, and it all takes a few seconds. It’s faster than a credit card,” SumUp senior Android developer Dirk Jäckel said.

Developer Gustav Simonsson went on to say that SumUp had wanted to preserve what it considers to be one of bitcoin’s main benefits – low-cost transactions, explaining:

“We realized that since BitPay charges no fees at all, we had a unique opportunity to also charge no fees, in turn passing on this to our merchants.”

The only cost for payments completed through SumUp will be a miners’ fee paid by the end customer.

Inspired by developers

Like many companies, SumUp indicated that it was inspired to adopt bitcoin payments by its own developers, who were intrigued by the technology.

In this case, Christ said it was Simonsson and Jäckel who convinced him – and by extension the company – that bitcoin “was the greatest thing”.

The two developers began to take an interest in bitcoin in 2013, discovering the technology as it rose in value. Eventually, this interest led to hands-on experience, when the developers created the early prototype for SumUp’s current bitcoin solution at a hackathon hosted at its Dublin office in the summer of last year.

“During that weekend, we produced a working prototype, but there was no plan to put that product into production,” Jäckel said. “It was a very rough prototype.”

Notably, the developers initially used the Coinbase API, which they reported as being “a bit rough around the edges”.

Jäckel added:

“It was very much just a quick hack, but it was working and I think we even had NFC.”

Christ reported that he was personally impressed by what the developers had achieved, but that the company was focused at the time on developing its chip-and-PIN card reader.

“Now that that is live and very successfully employed, we had the opportunity to do this again and the hackathon made it all the way into production,” Christ said.

A final version of the integration was completed this October, over a three-day period.

Strong customer feedback

Christ indicated that he is excited by a number of new payment technologies, but that for SumUp, technology is only useful if it will be used by the end consumer.

To date, Christ said he has been pleasantly surprised by the number of new sign-ups, estimating that 100 merchants have so far enrolled because of the new bitcoin payment option.

Still, he suggested that SumUp won’t go to lengths to promote bitcoin to customers who may not benefit from the option.

For example, Christ said that while the company was able to test the solution with enthusiastic merchants in the tech hotbed of Berlin, its customers in more rural areas may not have a compelling reason to accept bitcoin just yet.

Christ said

“We don’t want to push bitcoin on you if you don’t have any customers. We want customers to push merchants to add the service.”

BitPay advances in Europe

The news can also be seen as a boon for BitPay’s European strategy, as the addition of a major name in emerging payments technology is likely to reverberate in a merchant market that is still warming to bitcoin.

BitPay’s Moe Levin said:

“Leveraging a payment service provider’s existing merchants, as opposed to taking on merchants one at a time through our sign-up process, gives us the ability to scale incredible quickly and reliably.”

He went on to suggest that BitPay intends to stay focused on acquiring new merchants in Germany, the Netherlands and the UK – areas where SumUp has so far been able to assist with merchant enrolment.

Going forward, Levin hinted that similar future partnerships could be in the works, adding that BitPay is seeking to partner with “the most important payment services providers” in an effort to scale its presence in the region.

Images via SumUp; Shutterstock

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