Welcome to our new Payments Insights newsletter, a morning email with the top news and analysis on the digital payments industry, produced by BI Intelligence. Sign up to receive it in your inbox every morning.
A BIG RETAILER WARMS UP TO BITCOIN: Overstock.com CEO Patrick Byrne says that Overstock will begin accepting Bitcoin sometime in June. According to The New York Times, Byrne said that “some fraction, tiny now, of the population” currently wants to transact using a digital currency like Bitcoin. He also appeared intrigued by the currency’s structure, which places strict parameters that guide the amount of Bitcoin that can be created: “You want money to be based on something that no government mandarin can wish into existence with the stroke of a pen.” Byrne said the company would protect itself from oscillations in Bitcoin’s value with derivatives. (The New York Times)
MUM-AND-POPS LOVE BITCOIN: Already, there’s many small businesses across the U.S. and Europe that accept Bitcoin. This includes bodegas and barber shops in New York , according to The New York Post. Daniel Lee, who owns bodegas, restaurants, and a nail salon in Brooklyn, has been accepting the digital currency since March: ” … He now counts between five and 10 bitcoin transactions a day among his businesses. Though this makes up ‘probably not even 1 per cent’ of his business, Lee said, accepting the currency is beneficial.” Apparently, there are two big benefits to accepting bitcoin, a low processing fee of 1% — compared to over 2% for conventional credit cards — and no charge-backs, which is when a customer later disputes a credit card payment. (The New York Post)
E-COMMERCE SITES, TOO: Shopify, an e-commerce platform, has allowed its 75,000 online retailers to accept Bitcoin as of November. Beloved and Mindzai are among Shopify-powered e-commerce sites already accepting Bitcoin. (Shopify)
Meanwhile, Bitcoin platform Coinbase has released software that allows any retailer to accept Bitcoin at point-of-sale. (Coinbase)
In other news …
IS BITCOIN EVIL?: Paul Krugman has set off a huge debate on the Internet about Bitcoin after publishing a Dec. 28 column, provocatively headlined “Bitcoin Is Evil,” in which he stated that Bitcoin might be OK as a medium of exchange but it is a terrible store of value. Plus, Krugman argued, he doesn’t like Bitcoin’s agenda. He quoted this bit from author Charlie Stross to make his case: “Bitcoin looks like it was designed as a weapon intended to damage central banking and money-issuing banks, with a Libertarian political agenda in mind — to damage states ability to collect tax and monitor their citizens’ financial transactions.” (The New York Times)
THE KRUGMAN-BITCOIN SAGA CONTINUED: In order to discredit Krugman’s view and paint him as clueless on tech, Bitcoin fans circulated a quote from 1998 in which Krugman compared the Internet to the fax machine and said its growth would slow “drastically.” Krugman, no slouch when it comes to Internet fights, issued a response: “The issues about Bitcoin … are not technological! Everyone agrees that it’s technically very sweet. But does it work as money? That’s a very different kind of question.” (Business Insider)
BITCOIN MICROPAYMENTS ON TWITTER: A new startup, TipperCoin, “allows users to send bitcoins by posting a Twitter message containing the hashtag #TipperCoin … Users cannot send bitcoins through retweets and are encouraged not to store too many bitcoins in the account, which is meant for tipping.” (Payments Source)
TARGET UPDATE: After initially minimising claims of stolen personal identification numbers, Target has admitted that encrypted PIN numbers were stolen by hackers’ malware installed on Target’s point-of-sale systems during a security breach between Nov. 27 and Dec. 15. But Target, in its fourth media update on the breach, says the PINs that were stolen can’t actually be used: “The PIN information was fully encrypted at the keypad, remained encrypted within our system, and remained encrypted when it was removed from our systems.” (Target)
RUSSIAN PAYMENTS COMPANY EXPANDS: Qiwi, which provides offline, online and mobile payments solutions, (and claims to have deployed 15 million “virtual wallets”) has acquired Blestgroup, which places terminals at retailers. (Investor’s Business Daily)
MORE RUMOURS OF TROUBLES AT CLINKLE: Valleywag excerpts bits from a Quora post alleging that mobile payments startup Clinkle has been mismanaged by 20-something CEO Lucas Duplan. The problems supposedly range from miscommunication about salaries, fund-raising, and options, to frustration over constantly shifting goal posts for when the platform will actually launch. In a June 2013 blog post, Duplan summarized Clinkle’s goal: “There are close to one million apps in the Apple App Store. Yet, none let you comfortably go a week or even a couple of days without paper bills or plastic cards.” Clinkle has raised over $US20 million, much of it from big-name investors including Sir Richard Branson. (Valleywag)
THE ENEMY IS CASH: Jeffrey Bower, international director of mobile payments at Scotiabank, can be heard giving a December 2013 talk on interoperability — the lack of common standards that allow consumers to transact in a simple way across devices and technologies — at the link below. “I believe that the interoperability that consumers need is not being delivered by any of us today … The competitors in this business aren’t in this room … [it’s cash], it’s just that much easier.” No signup required to hear the audio. (M For Mobile)
IN CASE YOU MISSED IT: Inside Zenroll’s sprint to reimagine how you get paid. (TechCrunch)
Business Insider Emails & Alerts
Site highlights each day to your inbox.