Bitcoin payment processor startup BitPay has exceeded 10,000 Bitcoin-accepting merchants using its services to take payments via the decentralised digital cryptocurrency. Around this time last year BitPay had accepted its 1,000th merchant — so it’s a measure of the momentum behind Bitcoin that BitPay is growing at such a rate.
The Atlanta-based startup, which was founded in 2011, raised $2 million led by Founders Fund back in May — bolstering an initial $501,000 round it closed in January. At the time of that initial raise, BitPay had some 2,100 merchants on its books.
BitPay said its 10,000+ merchant network spans 164 countries, underlining one of the key differentiators for Bitcoin vs other digital payment methods: it’s ability to cross borders and carry on working. Lower fees is another reason merchants are taking more of an interest in Bitcoin, plus the lack of chargebacks — effectively eliminating the risk of fraud for merchants (albeit, fraud may be taking place but the merchant won’t be the one losing out).
The largest proportion of merchants in BitPay’s directory are in North America, where around half its merchants are located, with a quarter in Europe, and another quarter in the rest of the world.
In terms of the types of merchants BitPay is attracting, ecommerce merchants make up the vast majority as you might expect — accounting for more than 90% of its business. It said these include consumer electronics, precious metals and IT services merchants. A key problem for online merchants is of course card-not-present fraud — which Bitcoin neatly circumvents.
When it comes to transaction volume, thus far in 2013, more than $34 million worth of Bitcoins have been spent on goods and services through merchants using BitPay’s platform. August was another record month for BitPay, with the service processing transactions worth more than $6.4 million.
Commenting on BitPay’s 10,000 merchant milestone, investor Shakil Khan told TechCrunch: “BitPay is doing a great job at educating merchants to the benefits of accepting Bitcoin, 10,000 merchants on board is excellent news for such a young company in a very new industry, and YES, as an investor I am very happy with the progress being made by Tony and his team.”
Khan has taken a personal interest in Bitcoin, launching a Bitcoin news resource called Coindesk earlier this year as his personal contribution to educating more people about the fledgling Bitcoin ecosystem. He says the key problem Bitcoin fixes is that “we have a banking system that’s slower than it’s ever been”. “Bitcoin has shown there is appetite for a new form of payment/currency system,” he added.
BitPay said it is continuing to expand its feature-set. Today it’s added the ability for merchants using the Quickbooks small business accounting software to download and import their BitPay sales into Quickbooks for easier reporting of Bitcoin sales.
The BitPay offering includes pre-built plugins or embedded solutions for 20 of the most popular shopping cart platforms, allowing Bitcoin to be added as a payment option to a merchant’s webstore “in a few minutes, without any programming code”.
Bitcoin is many things to many people — in addition to being used as a form of digital money to buy stuff, it has, among other things, attracted investors who are more keen to hoard it than exchange it for goods and services. So BitPay’s growth rate is notable in terms of the development of Bitcoin’s use in trade. The more places there are to spend Bitcoin, the more Bitcoin can double for money — even though it remains far more flexible. At TechCrunch Disrupt last week the cryptocurrency was described by Naval Ravikant of AngelList as “an API for programmable cash transactions”.