US financial transaction firm Stripe has announced that it is to stop supporting Bitcoin for payments.
The company, which serves more than 100,000 businesses, said that Bitcoin users now view the cryptocurrency as an ‘asset’ as opposed to an actual form of payment, and that fewer online merchants were willing to accept Bitcoin. Stripe also said that price fluctuations causing longer transaction times and rising fees were a factor.
Stripe made the news in 2014 when it became the first major payments company to support Bitcoin. The firm said that it hoped Bitcoin would help customers in areas with low credit card penetration or high credit card fees to shop online.
After over three years of Bitcoin compatibility, Stripe now feels that Bitcoin is "better-suited to being an asset than being a means of exchange". Huge swathes of interest in cryptocurrencies in the past 18 months has led to massive price increases – and subsequent crashes. Those fluctuations meant that the amount of time needed to complete a sale had risen. "By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it’s for the ‘wrong’ amount," Stripe’s product manager Tom Karlo said in a blog post explaining the decision.
"For a regular Bitcoin transaction, a fee of tens of US dollars is common, making Bitcoin transactions about as expensive as bank wires," Karlo continued.
"Because of this, we’ve seen the desire from our customers to accept Bitcoin decrease. And of the businesses that are accepting Bitcoin on Stripe, we’ve seen their revenues from Bitcoin decline substantially."
Bitcoin is not being abandoned by Stripe immediately, but it is starting to wind down support, with all transactions ceasing by April 23rd.
Karlo assured that Stripe is not giving up on cryptocurrencies on the whole though. "We’re interested in what’s happening with Lightning and other proposals to enable faster payments," he said. "OmiseGO is an ambitious and clever proposal; more broadly, Ethereum continues to spawn many high-potential projects."