Global Payments Inc., a global processor servicing more than one million merchants, will enable its clients to accept digital currency in a move that may attract more international shoppers to brick-and-mortar merchants.
The processor's deal with Bitpay, a Bitcoin service provider, makes it possible for merchants to accept payments from mobile Bitcoin wallets as an alternative to requiring travelers to obtain local currency or pay a fee to convert their funds when swiping a card.
"A lot of consumers are using Bitcoin on their mobile phone now; when you start to use Bitcoin on your mobile phone you can use that anywhere in the world," said Tony Gallippi, co-founder and CEO of Atlanta, Ga.-based BitPay. "Businesses that cater to international travelers would love to accept Bitcoin."
Hotels and restaurants are the two biggest industries that BitPay expects to be early adopters of the digital currency through the Global Payments agreement.
For example, Gallippi was recently in Brazil for the World Cup. Most major hotels would accept his U.S. credit card, but many restaurants would not. Brazil is a cash-based economy and also uses Boleto Bancario, a local payment method similar to a wire transfer, but the latter is difficult for foreigners to access, said Gallippi. But as a global currency, Bitcoin could bridge this gap, he said.
Global Payments is based in Atlanta, and has 12% of the U.S. processing business by merchant acquiring revenue, according to a company report. It also has 25% of the Asia-Pacific market by the same metric. In Europe, it has 20% of the market in the U.K., 24% of Spain, 29% of Russia and 50% of the Czech Republic by transaction volume, according to the same report.
"It is important for us as to provide our partners, our merchants and our customers with the ability to accept any payment, anytime, anywhere and that means they have to be provided the choice," said Amy Corn, senior vice president of marketing and corporate communications at Global Payments. "In addition to providing the ability for our merchants to easily accept Bitcoin payments, other examples of value-added products offered by Global Payments include accepting PayPal or a tablet form of acceptance like ShopKeep."
Global Payments received specific requests about Bitcoin acceptance from its merchant customers, according to Gallippi.
"Some of the things merchants are asking them for are, 'What can you do about my interchange fees?' and 'How can you help me reduce fraud?' and 'How can I get more customers?'" said Gallippi. Global Payments "understands the value of the technology and how it can solve the pain points their customers are complaining about," he said.
As part of the agreement, BitPay will work with Global Payments' account managers on marketing campaigns to get merchants to accept the digital currency.
The processor also services e-commerce merchants, which have been an essential target for Bitcoin adoption. BitPay also works with Newegg and TigerDirect, both online technology retailers; Wordpress, an online publishing platform; and Gyft, a mobile gift card provider which is being acquired by First Data (Gyft indirectly helps merchants accept Bitcoin by accepting the currency as payment for its digital gift cards).
"Global Payments is one of the biggest payment processors in the world and has enormous reach that will now be available to BitPay," said Gil Luria, an analyst with Wedbush Securities. "This could help create a step function for merchant acceptance over the next couple of years. Combined with the acquisition of Gyft by First Dataan even bigger processorwe are seeing a major move for mainstreaming bitcoin acceptance."
14-Day Free Trial
Corrected August 6, 2014 at 2:07PM: An earlier version of this story misspelled Amy Corn's name.