Four years ago Stripe said it would be the first major online payments processor to accept Bitcoin. This week, the $9 billion online payments company says they’re giving up on the idea.
The company stated that cryptocurrency had almost become a victim of its own popularity — the time needed to complete a transaction has increased, meaning that payments sometimes fail.
Skyrocketing transaction fees caused Stripe to view Bitcoin as more of an asset, less than a currency used for online payments. Mining fees — the cost paid to the people who provide the computing infrastructure behind each bitcoin transaction — peaked in late December, when people were required to pay $37 on top of any transaction just to make sure their payment went through in a timely manner.
Transactions submitted without a high-end mining fee could take hours or days to process, at which point the value of bitcoin in USD likely had changed.
“By the time the transaction is confirmed, fluctuations in bitcoin price mean that it’s for the ‘wrong’ amount,” Stripe’s Tom Karlo said. “For a regular bitcoin transaction, a fee of tens of U.S. dollars is common, making bitcoin transactions about as expensive as bank wires.”
Stripe says it remains bullish on the crypto-economy, and CEO Patrick Collison was certainly ahead of the curve on bitcoin’s rise. Collison told Recode back in 2014 that it was important for the payments platform to accept a currency that anyone around the world could access, and that it could be a cheaper option than credit cards like Visa, which charge seller-side customers a fee on top of each transaction.