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.
ZYNGA PARTNERS WITH BITPAY TO ACCEPT BITCOIN. Zynga, a company that builds social games including Farmville, is partnering with Bitpay, a Bitcoin payments processor. The partnership will allow gamers to make payments for in-game virtual goods using Bitcoin.
Zynga announced the deal in a post on the social networking site Reddit, which hosts a large community of Bitcoin enthusiasts.
During the trial, the availability of Bitcoin as a payment method will be limited to FarmVille 2, CastleVille, ChefVille, CoasterVille, Hidden Chronicles, Hidden Shadows, and CityVille.
IT’S A BIG DEAL FOR BITCOIN, BITPAY, AND ZYNGA. The success and value of Bitcoin as a method of payment is highly dependent on the number of businesses that accept it. The fact that large, well-known businesses like Zynga and Overstock.com are making moves to accept Bitcoin is an indicator that Bitcoin may get the legs it needs to become a robust method of transaction.
The deal is a huge win for Bitpay because it will increase the company’s brand recognition and help to diversify the types of businesses that use the company’s services.
Zynga’s daily active users dropped by half in the last year and the company is making moves to plug holes and cut costs. The low cost of processing Bitcoin transactions could help the company achieve this goal, assuming Zynga gamers are willing to adopt Bitcoin as a method of transaction. The move also gains Zynga some much-needed attention. (TechCrunch)
In other news…
BITCOIN MINING HARDWARE SALES ARE EXPLODING. Computing components used for mining Bitcoin generated $US200 million last year in new sales for the companies that produce these products. Bitcoin mining requires solving mathematical puzzles with computers. There are a limited number of bitcoins that can be mined and as these un-mined coins become more scarce the computing power required to find new bitcoins increases, creating demand for specialised computing components. (Payments Source)
A PAYMENT CARD WITH A FINGERPRINT READER. A Houston based start-up, Epic One, is hoping to help prevent Target-style data breaches by developing a new payment card. The card will require users to swipe their fingers across a biometric scanner before it can be used to make a purchase. No credit card information will be stored on the card either. Instead that information will be stored in a digital wallet in the cloud. (Forbes)
STARBUCKS INTRODUCES GIFT CARDS IN CHINA. Starbucks is introducing gift cards in China. While the Asia-Pacific region only accounts for about 6% of the coffee company’s revenue, the addressable market in China is huge and revenue is expected to grow quickly which should also have a positive effect on gift card sales. To give you an idea of how big gift card sales are for Starbucks, consider that during the 2012 holiday season one in 10 American adults recieved a Starbucks gift card. (Payments Source)
BUNDLED PAYMENTS SERVICES ARE A HIT WITH MERCHANTS. Independent sales organisations (ISOs), which sell payments services on behalf of processors, are having success selling bundled payments services to merchants. Transmodus, for example, is an ISO that bundles a number of products like mobile payments, online payment forms, email billing, and virtual terminals together. This provides a one-stop solution for merchants. (ISO and Agent)
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THE WORLD’S SECOND-LARGEST INSURER IS LAUNCHING A FINANCIAL SERVICES APP. Ping An Insurance Company of China, the world’s second-largest insurer, plans to offer a mobile financial services app at the end of January, according to the Global Times. The services will include online payments and social networking services. (Global Times)
COINBASE OFFERS BITCOIN POINT OF SALE SOFTWARE. Coinbase, a Bitcoin wallet provider, released a point-of-sale app that allows merchants to use their mobile devices to accept Bitcoin for products and services. (Mobile Payments Today)
WALL STREET IS HUNTING FOR BITCOIN TRADERS. Wall Street recruiting firm Glocap posted a position for a “Junior Bitcoin Execution Trader” last week. The news comes on the heels of the announcement that Fortress Investment Group and Pantera Capital are opening their own Bitcoin funds. (The Street)
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