Shopify rolls out Coinbase integration, makes accepting bitcoin easier than ever for 100k+ merchants
What’s the fastest way to get a message, product, or service out to a large number of people? Often it’s to distribute that message through an influential node in a network. A former sales manager of mine used to call them COINs, for centers of influence in networks. The result is a bit like the game of telephone on steroids, hopefully without the problems of message degradation as word spreads.
Today we saw bitcoin payment processor and consumer wallet startup Coinbase apply this strategy. The company recently crossed 30,000 merchants on its platform, many of which it acquired directly in one-to-one sales calls. This can be an effective strategy when the numbers are small but is tough to scale to world domination-type proportions.
Apparently recognizing this fact, Coinbase did the next best thing by partnering with one of the world’s largest commerce platforms in Shopify and relying on it to spread the word. Through this integration, Shopify’s more than 100,000 merchants can now accept bitcoin as easily as creating a Coinbase account and flipping the switch in their Shopify settings to make bitcoin a payment option.
The benefit of working with Coinbase is that merchants can instantly transfer some or all of their incoming bitcoin into dollars, removing nearly all price volatility and exchange rate risk from the process. Coinbase also allows simple bitcoin refunds, the option of offering automatic discounts to customers paying in bitcoin, and a quick two-click checkout flow to consumers with a Coinbase consumer wallet account.
Leap Motion, Boosted Boards, Soylent, and iOgrapher are the launch partners for this announcement meaning that each have enabled the Coinbase integration following a recent private beta testing period. (It has to be said that bitcoin and Soylent seem like an anti-establishment match made in heaven.) Coinbase is already used by large merchants like Overstock.com, Expedia, and Google to process their bitcoin payments.
As Shopify points out on its blog, the benefits of accepting bitcoin are many. First, it allows small merchants to easily and inexpensively accept payments from customers around the world, regardless of their native fiat currency or banking relationship. Also, unlike credit card and PayPal transactions, bitcoin transactions cannot be reversed by the buyer, removing the risk of a merchant delivering a product or service only to later lose payment. Finally, Shopify cites the security of the bitcoin protocol and the Coinbase platform.
Shopify first began accepting bitcoin via a BitPay integration in November 2013, now it’s added that company’s largest competitor. Like Coinbase, BitPay allows merchants to instantly transfer out of bitcoin and into fiat currency to avoid volatility risk. But, until recently, that was where the similarities ended. Because Coinbase has always offered both merchant processing and consumer wallet services, it’s been able to deliver a far more user-friendly checkout experience, including two-click checkout and bitcoin refunds, options that BitPay couldn’t match.
Consumers transacting through BitPay have to manually enter a bitcoin wallet address – an awkward string of random letters and numbers that is several dozen characters long – and been relegated to receiving refunds in cash. With the recent addition of the company’s Copay, open-source multi-sig wallet, however, this may soon change. But for now, Coinbase remains the gold standard in bitcoin checkout user experience and now Shopify merchants are just a few steps away from offering it to their customers.
Bitcoin’s biggest issue remains crossing the chasm from experimental technology to mainstream financial tool. In that sense, every merchant that accepts the digital currency as a payment option is a step in the right direction for the protocol and the broader community. This announcement pits Coinbase against Bitpay – unsurprisingly, as the two are natural rivals – but it is more a story of a rising tide that stands to lift all boats.
It once seemed like a long-shot that bitcoin would survive the early trials and tribulations to achieve mainstream legitimacy and sustainability. Now, with financial thought leaders like Mark Andreessen*, Danny Rimer, and Reid Hoffman* advocating on behalf of the technology, it seems more and more like an inevitability. The pressing question, however, is how long will the process take and how much many more bumps in the road will early adopters have to endure?
(*Disclosure: Marc Andreessen and Reid Hoffman are investors in Pando.)