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.
The referral program "is a fantastic way to let people talk about and promote Bitcoin," says Stephanie Wargo, vice president of marketing at BitPay. "It's a way to reward all this enthusiasm…so [Bitcoin enthusiasts] can spend bitcoin and really have a true Bitcoin ecosystem around them."
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 individual will receive 15% of those profits. Individuals 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.
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 is a group of independent small businesses located along a walkable road within the Cedar and Lee business district in Cleveland Heights, Ohio who have all begun accepting bitcoin.
The referral program was shut down formerly because individuals weren't as engaged as BitPay had wanted, instead only caring to sign up their favorite bar or coffee shop and not pursue other merchants.
Now individuals set up a contractual relationship with BitPay when signing up to be a referral partner. They then get a referral link which merchants must sign up through for the individual to get commission.
Matt Russell, a New York-based Bitcoin strategist and consultant, has helped three merchants begin accepting bitcoin. But only one of these merchants—Paul Peterson, a home repairs 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 off 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 what not."
He also helped Flat 128, a boutique fashion retailer in the West Village, start accepting bitcoin through BitPay, but this 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 ecosystem, 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 that 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 amount 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 & mortar store in NYC to accept Bitcoin as a form of payment," DuBois says.
For merchants that won't be doing a high volume of their transactions in bitcoin and want to hold onto the digital currency, Russell helps the merchant set up a wallet and makes sure they know how to secure that wallet 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 currently working on enhancing the referral program, automating the sign up process and developing marketing material, such as "Bitcoin accepted here" stickers, for individuals to give to merchants, says Wargo.
"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," she says. "In the payments space payments processors have ISOs (independent sales organizations); this is a mini version of an ISO for BitPay."
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.