BitPay, a Bitcoin merchant services provider, wants its hired sales people to concentrate on high-volume clients, so it’s launched a referral program to provide incentives to digital currency enthusiasts who sign up small merchants.
“From a sales team perspective they need to focus on the enterprise clients, like the Newegg’s and the TigerDirect’s—the volume merchants that need massive integrations,” says Stephanie Wargo, vice president of marketing at BitPay. “In the payments space payments processors have ISOs; this is a mini version of an ISO for BitPay.”
Bitcoin enthusiasts are serious about Bitcoin merchant adoption—some might even say obsessed. But cryptocurrency nerds may find their obsession lucrative with BitPay’s referral program., observers tell ISO&Agent Weekly.
Putting small business adoption in the hands of Bitcoin enthusiasts is a way “to get Bitcoin to the masses without having a staff of 5,000 running around the world,” Wargo says.
BitPay offers individuals that sign up merchants onto its platform a percentage of the sales it makes from the merchant.
For example, if a merchant signs up for the $30 a month unlimited transactions package, the referral partner will receive 15% of those profits. Such partnerss also get 15% of the revenue BitPay makes if the merchant signs up to take a 1% fee per transaction instead of the monthly fee.
The referral program “is a fantastic way to let people talk about and promote Bitcoin,” says Wargo. “It’s a way to reward all this enthusiasm…so [Bitcoin enthusiasts] can spend bitcoin and really have a true Bitcoin ecosystem around them.”
After initially shutting down the referral program near the end of 2013, BitPay re-opened it two or three months ago. Since then, 140 people from all over the world, the majority from the U.S. and Canada, have signed up as referral partners, Wargo says. “So far they’ve pushed through a little over 1,000 merchants,” she says.
Top referral partners who have signed up active merchants make an average of $200 to $400 in monthly commission, says Wargo.
“We kind of hope that when we talk to [potential referral partners] they have a business plan…with a target list, if you will, of merchants to sign up,” Wargo says. “We want them to be really involved in their community…almost a mini version of Bitcoin Boulevard.”
Bitcoin Boulevard, a group of independent small businesses located along a walkable road in the Cedar and Lee business district in Cleveland Heights, Ohio, have all begun accepting bitcoin.
The referral program was shut down temporarily because participants weren’t as engaged as BitPay had wanted. They were signing up only their favorite bar or coffee shop and did not pursue other merchants.
Now individuals set up a contractual relationship with BitPay when signing up to become a referral partner. They then get a referral link which merchants must sign up through for the individual to get the commission.
Matt Russell, a New York-based Bitcoin strategist and consultant, has helped three merchants begin accepting bitcoin. But only one of those merchants—Paul Peterson, a home repair and improvement contractor—signed up using the referral link. Until the contractor does a job and gets paid in bitcoin, Russell won’t start making money from the referral.
“I have no specific allegiance to BitPay or Coinbase or anybody,” says Russell. “But BitPay offers a slick and intuitive service for people that want to get set up in 10 minutes and be compatible with Quickbooks and whatnot.”
He also helped Flat 128, a boutique fashion retailer in New York City’s West Village, start accepting bitcoin through BitPay, but that was before the merchant services provider re-opened the referral program.
“I walk the merchant through the process…so I can provide hands-on support in the future,” Russell says. “I want to be the total point person for people that want to learn about Bitcoin.”
Russell is one the many entrepreneurs in the Bitcoin world, building a consultancy startup to counsel merchants and others about how they can use cryptocurrency.
So far, all his work has been pro bono, but Russell will begin charging for additional work, outside setting up a merchant services account, once he builds a client base.
Making sure merchants publicize that they accept bitcoin and offer discounts to those who use the digital currency are important steps to bringing in new customers, Russell says.
“I haven’t had any purchases other than an item that Matt purchased as my inaugural bitcoin purchase, but I am excited that I am now setup…and I have mentioned it on Yelp,” says Elizabeth DuBois, owner of Flat 128. “When people with bitcoin come in to spend their money—they will receive 10% off—I will be ready.”
DuBois says Russell was able to download the BitPay app and sync it with Flat 128’s ShopKeep mobile point of sale.
“The (number) of people using and merchants accepting Bitcoin keeps growing and I don’t see it going anywhere but up. Therefore, it’s exciting to be one of the first fashion retail brick-and-mortar stores in NYC to accept Bitcoin as a form of payment,” DuBois says.
For merchants that don’t complete a lot of their transactions in bitcoin and want to hold onto the digital currency, Russell helps set up a wallet and makes sure they know how to secure it and exchange or spend their bitcoin.
Accepting bitcoin “will help businesses instantly engage the entire world and help the community grow. And I have bitcoin and want to be able to spend them more, so it’s a little selfish in a way,” Russell says.
BitPay is enhancing the referral program by automating the sign-up process and developing marketing material, such as “Bitcoin accepted here” stickers, for referral partners s to give to merchants, says Wargo.