Over the years, the online payment processor Stripe has been paying close attention to the bitcoin and crypto space, waiting for the right moment to jump in. The company has now partnered with FTX and Blockchain.com to start its crypto journey. They had started to form a crypto-focused team in October 2021.
Originally, Stripe said in 2018 that Bitcoin had become “less useful for payments” and was better-suited to being an asset, but they changed paths after noticing that “crypto is going mainstream.”
“To better support our customers and continue to grow the GDP of the internet, we are working to give crypto businesses access to today’s global financial infrastructure”
Now, Co-founder John Collinson announced that “Stripe now supports crypto businesses: exchanges, on-ramps, wallets, and NFT marketplaces. Not just pay-ins but payouts, KYC and identity verification, fraud prevention, and lots more.”
However, similar to Visa or Paypal’s limited integration of crypto, this does not seem to mean that Stripe strictly supports crypto payments, rather they allow crypto users to “process payments for fiat currencies globally through a single integration.”
Simply put, the fiat payments API integration facilitates crypto to be quickly converted into fiat for payments. This means you are not directly paying in crypto, but you can still use your digital coins to pay for services and products linked to Stripe.
What seemed most innovative from the announcement was directed toward the NFT space and crypto exchanges.
Stripe’s on-ramps support the purchase of crypto using credit and debit cards, enabling fiat deposits and withdrawals for crypto exchanges. The exchange FTX partnered with the payment solution company to power their payments and use their automated ID verification system.
“We’re seeing greatly increased speed of KYC processing, higher rates of automated approvals, and a smoother UX for our customers”, said FTX President Bret Harrison.
Moreover, Stripe announced that their APIs can “help you launch your first NFT or crypto project fast, while fulfilling regulatory requirements, reducing fraud losses, and keeping sensitive data secure.”
Related Reading | Payments Giant Stripe Is Not Ruling Out Crypto Payments, Says Co-Founder
But Stripe Has Nothing On Bitcoin
The crypto community responded to the announcement with excitement. It was widely seen as a major step toward mainstream adoption. However, can traditional money management services like Stripe keep up with the fundamental values of bitcoin?
Since Stripe took off, it has been portrayed as a competitive alternative to PayPal and gained a better reputation. But there have also been many complaints from users who were not satisfied. In some cases, sellers ended up wishing for the mainstream adoption of bitcoin so they would no longer have to rely on payment solution companies.
Last year, an unhappy seller wrote a post about a bad experience with Stripe. Mark Gavalda reported recurrent fraudulent activity was affecting their business.
Apparently, Stripe’s scam protection was not so sharp at the moment and the seller was losing money because of the $15 chargeback fee applied to each transaction they had to refund because of fraudulent activity. “In my opinion, should’ve been stopped by Stripe even before they happened,” they added.
“Not long ago Stripe was just a startup happy for all new clients, set out to disrupt the way PayPal handled customer care and business in general. A few years in and they’ve become the same faceless enterprise.”
As this user sought a company that specialized in online fraud prevention, Stripe closed down their account “in the middle of the night without fair notice. Or help.”
“They could’ve given us advice on how to minimize frauds, what we could have changed in our form or anything. Plus a warning like “if this continues, we will have to suspend your account” a couple of weeks before the final decision would’ve been nice, too.”
Although Stripe took long to reply to their inquiries and the seller complained about the poor handling of customer relations, the company reached out to them after the blog post and it all apparently had a happy ending in which the account got reactivated and Gavalda got to chat with Stripe co-founder Patrick Collison.
The seller’s opinion gave an u-turn: “As I mentioned earlier, we do really like Stripe. As the lead developer of our team, I’d say it’s the best thing that happened to online payments since PayPal.”
Also before the change of heart, the seller had an interesting approach to their disappointment:
“We sincerely hope that Bitcoin (or something else based on the groundwork laid out by Bitcoin) will get mainstream in the coming years, it makes all this so simple (no disputes, no chargebacks, ridiculously low fees).”
Overall, Stripe still holds a better reputation than PayPal, but it is nothing compared to being able to directly use Bitcoin’s lighting network for payments like people living in El Salvador are able to do.
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