In another validation of the bitcoin space, YC’s biggest payments company, Stripe, said it has started to test bitcoin and ACH payments with a select number of users.
They didn’t disclose who they’re partnering with, so it appears that they might be going their own way on this. Two of their better-known and funded competitors for processing merchant payments using bitcoin are Coinbase, another YC-backed startup, and Bitpay, which is backed by Founders Fund. (Founders Fund also backs Stripe).
The company isn’t sharing its fee structure for the time being. “We’re still testing the technology,” said spokesperson Kelly Sims.
Stripe did not reveal its banking partners. It says it’s doing instant exchanges as well, so merchants don’t need to handle bitcoin directly or deal with the cryptocurrency’s volatility risks. Sims clarified this further by adding that Stripe doesn’t take possession of the crypto-currency at any time; its partners on the back-end are handling the actual bitcoin exchanges.
The tests are only for U.S. Stripe customers, but Sims said that geographic coverage will likely expand in the “coming days.”
One of Stripe’s first tests is with Tarsnap, a secure online backup system for UNIX.
“Stripe’s support is crucial here due to the nature of Bitcoin: It doesn’t have all the qualities normally expected of money. In particular, Bitcoin’s deflationary nature makes it very prone to speculative bubbles, making it a terrible store of value. and a poor unit of account. However, Bitcoin truly shines as a medium of exchange — with its low transaction costs and irreversibility, Bitcoin is the cash of the internet — but since it’s not practical to quote long-term prices in bitcoins, people typically deal in terms of ‘X dollars worth of bitcoins.'”
While eBay’s PayPal has yet to dip its toes into bitcoin, PayPal’s president David Marcus has expressed support for the cryptocurrency.