Stripe, the Ireland-based payment platform, seems to be backtracking on its previously enthusiastic stance on cryptocurrencies as a mode of payment. In a statement issued January 23, the company announced that it is winding down support for Bitcoin and plans to ditch the cryptocurrency.
The announcement was made by Stripe product manager Tom Karlo in a blog post on the company’s website. According to Karlo, the company will slowly wind down its support for BTC and, in three months, will totally end support for the cryptocurrency by April 23. Of course, this move is a reversal of its position on cryptocurrencies four years ago, when it proudly announced that it was the first payment platform to accept bitcoin as a mode of payment for transactions.
Karlo gave three major reasons why Stripe is ending Bitcoin support. One reason for the company’s withdrawal is lengthy transaction confirmation which sometimes leads to failed transactions. “Transaction confirmation times have risen substantially,” Karlo explained. “This, in turn, has led to an increase in the failure rate of transactions denominated in fiat currencies.”
Another reason is that Bitcoin’s price volatility makes it less than ideal as a means of payment. In fact, it is said that it sometimes takes hours for entering a transfer into a blockchain. Coupled with Bitcoin’s lengthy transaction confirmation, its price fluctuations could spell disaster for either of the transacting parties. “By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it’s for the ‘wrong’ amount,” Karlo points out.
And, lastly, Karlo explained that the hefty transactions fees were another reason for dropping Bitcoin. He pointed out that BTC fees cost about as much as bank transfers, making it less attractive as a payment option. “For a regular Bitcoin transaction,“ a fee of tens of U.S. dollars is common, making Bitcoin transactions about as expensive as bank wires,” Karlo observed. “Bitcoin has evolved to become better-suited to being an asset than being a means of exchange.”
But Stripe is not totally discounting cryptocurrencies as payment options and is closely monitoring developments in the segment which might justify “enabling support for in the future.”[Featured image via Stripe]