The Bitcoin: Can It Disrupt The Payment Industry?

Does the Bitcoin threaten you Stripe or the business model of PayPal? This question was posed on Quora: the site where to learn and share knowledge, which makes it possible to better understand the world.

Answer by Peter Berg on Quora. To the question "Is the Bitcoin a threat to Stripe or the very existence of PayPal?" It is without nuance: "Certainly not!".

However, it can be envisaged that if the Bitcoin repents and is to be used more regularly during transactions, it can "disrupt" the payment platforms. And even then, traders will still need to be framed to use the Bitcoin. A seller will need to create and manage a Bitcoins wallet before receiving funds. And once the amount is received, he will have to be able to use the Bitcoin in turn to pay his costs (costs of his goods, wages ...) or he will have to spend time converting them into Euros to be able to make Each time the Bitcoin is not accepted.

It is much more likely that Stripe, PayPal and other payment platforms will also be positioned on this currency by offering payment services to Bitcoin as they provide services for all payments based on fiduciary currency (eg credit cards ). Before Bitcoins become popular and the world is using them (which may also never happen), users will still need the help of payment platforms to settle a transaction in the vendor's local currency.

Most merchants who accept Bitcoin today do it mostly for the positive publicity that surrounds it or to touch a specific segment of customers. Most of the transactions in Bitcoin are not finalized. In the few transactions that use the Bitcoin, the seller almost always passes through Stripe to also have the possibility of converting his Bitcoins into a fiduciary to limit the instability of the Bitcoin. For example, if 1 BTC (Bitcoin) is worth $ 2,500 at the time of the transaction and is worth only $ 2,000 when the merchant needs to use it to settle his bills, this represents a 20% loss. To prevent this kind of bad experiences, Stripe and other platforms (like Coinbase) provide users with an instant conversion into fiduciary currency. This reassures the seller on the negotiations in BTC, it does not lose value or its purchasing power (as it misses a nice added value if the price goes up).

But we have to take into account the return of goods, reimbursements and the resolution of conflicts. Payment methods such as Visa or MasterCard are associated with rules and guarantees for merchants and consumers. If you buy an iPad by paying with your Visa card and if the seller sends you a brick, you (as buyers) are protected during this fraud. On the other hand, if you had sent your settlement in the form of Bitcoins to this fraudulent trader, it would have been "so much the worse for you". Bitcoin transactions are irreversible (at least for now).

Consumer protection procedures, dispute resolution, all the guarantees offered by more traditional means of payment (eg credit cards), are not foreseen for trade in Bitcoins. Stripe and PayPal (but also Visa and issuing banks) play an important role in protecting transactions, both for sellers and for buyers.

So, the exchange of capital, the protection of purchases and the many services offered by the payment platforms continue to reassure users ... Stripe, PayPal and the others have nothing to fear Bitcoins ... for now.