BitPay CEO sees more people becoming crypto-natives

While using crypto to make payments isn’t exactly mainstream yet, there are signs that consumer desire to pay with digital assets remains strong despite the slowdown of the crypto winter. Most notably, more merchants are starting to accept it, and more FinTechs are starting to support it.

And it’s not just merchants. Traditional banks and financial institutions are also starting to get involved. Just this month, BNY Mellon, America’s oldest bank, announced that it had received regulatory approval to offer clients crypto custody – the first major mainstream bank to do so. And on October 17, Mastercard rolled out Crypto Source, a white-labeled cryptocurrency trading service aimed at mainstream banks.

None of this would happen if people didn’t want to buy, sell and use crypto.

In this article, part of PYMNTS’ Executive Insight series, we’ll explore what the next three years hold for crypto payments.

“The macro trends that we expect over the next three years are really more and more consumers and companies becoming crypto-native or crypto-first,” Stephen Pair, CEO of crypto payment technology firm BitPay, told PYMNTS Editor-in-Chief Matt Nesto.

That means “being much more open and willing to deal with crypto directly and not rely on other companies or service providers to handle crypto or store crypto for them,” he said.

Becomes a native

“I think they’re going to experience the same thing that we’ve experienced as a company, which is that it’s much easier to interact with a blockchain than it is to make payments through legacy providers,” Pair said. “The days of uploading NACHA files, I believe, are fast becoming behind us. And having to do bank transfers and things like that where a lot of manual intervention is required.”

More broadly, he predicted that businesses will become more interested in learning how to set up digital wallets to manage digital assets and make payments.

“There’s no telling in the next three years, every company is going to do it,” Pair said. “But I think we’re going to see increasing interest in it. More and more companies on our platform want to do that.”

Another big trend he sees is both retail users and companies choosing to make or accept payments in dollar-pegged stablecoins.

“It solves some of the problems of dealing with volatile cryptocurrencies directly,” Pair noted. And it’s not just an American trend — BitPay recently added a euro-pegged stablecoin to its offerings, he said.

Make it simple

Over the past few years, a big priority for BitPay has been to integrate its services into major e-commerce platforms like Shopify, Pair said. The goal is to make it as easy as possible for merchants using these platforms to add crypto to their payment options.

With some, like Shopify, turning on crypto payments can take as little as a few hours, although that depends on the level of integration required by a specific e-commerce site.

Beyond enabling payments, another service BitPay focuses on is education, Pair said. Helping “these companies really raise awareness of their products and services among the crypto community” is critical to helping “these companies market and sell their products and services to crypto users,” he said. “It’s a big area of ​​investment for us in the next few years.”

From a business perspective, Pair noted, not much investment is needed to “dip their toe” in the crypto waters before deciding whether to hold crypto instead of automatically exchanging it for dollars or another fiat currency at the time of sale – which is what most sellers who work with firms like his who take crypto do.

“Maybe they own crypto themselves, or they want to be more cryptonative and have some of their assets stored in crypto and use that to make payments, initiate payments,” he said. “We can start with a very novice company and help them grow as their interest level develops over time.”

Give and take

Another reason some companies — especially tech firms — are looking at crypto payments is for wages, Pair said.

“There’s a lot of interest among employees to get a portion of their paycheck in crypto,” he said, noting that adding a small, regular amount of bitcoin or other cryptocurrencies to their holdings is “a great way for people to actually start accumulating cryptocurrency, start getting exposure.”

Overall, Pair told PYMNTS, the biggest hurdle for companies adopting crypto payroll deductions is “recognizing that there’s an interest among their employees and that it’s a great benefit to offer their employees.”

From the employer’s perspective, “it can be as simple as sending dollars to BitPay with instructions on which employees get paid,” he added. “We handle the employee registering and linking the wallet to be able to receive the cryptocurrency. We make it very turnkey for the company.”

Rules and regulations

Another stumbling block for merchants looking to get paid in crypto is compliance with banking anti-money laundering (AML) regulations and ensuring they meet tax and regulatory requirements. The latter can be a major obstacle, since the regulations are in many cases unclear or simply unwritten.

By handling things like know-your-customer (KYC) data collection needs and monitoring and flagging suspicious transactions, third-party services like Pairs can take on one of the most potentially time-consuming and pitfall-laden parts of crypto payments. merchant hands, he said.

On the security side, Pair said that crypto can be safer as the phishing campaigns that search for personal information that can be used to bypass password requirements simply do not apply.

And despite bitcoin’s rather exaggerated reputation for anonymity, “all transactions on blockchains are public and leave a permanent trace,” he noted. “So illegal activity related to cryptocurrencies is not as anonymous as cash, as physical dollars.”

But at the same time, he adds, pseudonymous crypto transactions are “probably a bit more privacy-protective than bank accounts, which allow anyone with access to see what you’re spending money on.”