Stripe will begin accepting cryptocurrency payments from businesses. This is the latest indication of how large financial institutions are open to digital assets.
Stripe, an online payments provider, is back in the cryptocurrency space four years after suspending support for Bitcoin. The company will begin to offer merchants the option of accepting cryptocurrency payments from customers. Twitter is the first merchant to accept cryptocurrency payments. After Twitter, it will expand to additional merchants.
Introducing crypto payouts: https://t.co/xJnpLmsBKn. pic.twitter.com/PJQ2oTaU7J
— Stripe (@stripe) April 22, 2022
Stripe will only accept payments in the USD Coin (USDC) stablecoin at the moment. USDC is a stablecoin backed by the U.S. dollar. This means it has price stability, which isn’t often the case with many popular digital tokens. Stripe noted Bitcoin’s volatility as one of the reasons it stopped accepting cryptocurrency payments in 2018.
The Polygon network will power the Stripe’s cryptocurrency payouts functionality. Polygon is a “Layer 2” solution that sits on top of the Ethereum network to execute transactions faster and at lower cost. Slow transaction times and hefty fees have been a source of criticism for Bitcoin, Ether, and other cryptocurrencies.
Stripe will extend support for more cryptocurrencies and blockchain networks later this year. In the Stripe Dashboard, platforms and their end customers may easily monitor and manage payouts.
Stripe Chief Product Officer Will Gaybrick stated, “One of the most successful ways we’re approaching our goal of expanding the internet’s GDP is to make business more global. Crypto protocols are a natural vector for this because they are worldwide by default. Platforms that use Stripe can deliver money to verified recipients almost anywhere in the globe instantly with crypto payouts.”
Stripe isn’t the only payment provider introducing digital tokens into its platform. PayPal, Mastercard, and other large payment service providers have announced their intentions to enter the crypto market.
How Will This Payment Work?
Stripe has simplified the experience of worldwide payouts for platforms and online marketplaces over the last 10 years. Stripe Connect allows businesses to pay people in their local currency in over 70 countries.
Platforms using Connect can now participate in the Web3 economy without needing to acquire and hold crypto themselves. They can now quickly pay out to their subscribers in even more nations. Also, they can improve their services for those who prefer crypto to traditional currency.
Connect is already being used by Twitter to pay creators for their earnings through monetization products like Ticketed Spaces and Super Follows. With cryptocurrency payouts for Connect, creators who opt in will be able to receive their earnings in a cryptocurrency wallet. Stripe will take care of all crypto-related operations and complexity. Platforms can avoid the issues of acquiring, storing, and transferring crypto by not requiring any code changes.
Connect allows platforms to easily onboard, manage, and pay out to users. Stripe’s normal onboarding routines will be followed by creators and freelancers who choose to be paid in cryptocurrency. Stripe will conduct a thorough KYC process, and the flow will adapt as cryptocurrency regulations change. With the Stripe Express app, creators can simply manage their account data, track payments in real time, and see upcoming payouts.
Why Polygon Network?
Payments will be made using the Polygon network. They chose it because of its:
- low fees
- speed
- Ethereum integration
- wallet compatibility (MetaMask, Coinbase Wallet, Rainbow, etc.)
When creators receive their payments, they have the option of keeping their balance on Polygon. Also, they can bridge to Ethereum and exchange it for a different currency. Over time, they hope to introduce support for more rails and payout currencies.
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