Fintech startup Stripe was one of the first major payments companies to support Bitcoin payments back in 2014, but now the firm has announced that it is ending support for cryptocurrency payments, citing expensive transaction fees and long wait times.
Bitcoin and other cryptocurrencies have seen an explosion in interest since they were first launched, with prices rocketing as high as $15,000 (£10,550) earlier this month. However, the focus has largely been on cryptocurrencies as an asset for investment, and the same level of interest that has driven prices high has brought concerns over whether they can feasibly be used for everyday payments.
"Our hope was that Bitcoin could become a universal, decentralised substrate for online transactions and help our customers enable buyers in palces that had less credit card penetration or use cases where credit card fees were prohibitive," said Tom Karlo, product manager at Stripe, in the announcement that the firm would be ending support.
"Over the past year or two, as block size limits have been reached, Bitcoin has evolved to become better-suited to being an asset than being a means of exchange. Given the overall success that the Bitcoin community has achieved, it's hard to quibble with the decisions that have been made along the way."
As Bitcoin has gained success, transaction confirmation times have risen substantially, which in turn has led to an increase in transation failure rates, as by the time the transaction is confirmed, fluctuations in Bitcoin prices mean that it's for the 'wrong' amount. Fees have also risen, making Bitcoin transactions about as expensive as bank wires for regular transactions.
According to Stripe, this has led to fewer customers looking to accept Bitcoin as a payment method, and those that still do have seen revenues in Bitcoin decline, leading the firm to conclude that "there are fewer and fewer use cases for which accepting or paying with Bitcoin makes sense".
As a result, the company is winding down support for Bitcoin payments, working with customers over the next three months to ensure a smooth transition before finally ending support on 23 April.
"Despite this, we remain very optimistic about cryptocurrencies overall," said Karlo. "There are a lot of efforts that we view as promising and that we can certainly imagine enabling support for in the future."