BitPay has launched a partnership with the world’s largest digital asset exchange that the Atlanta-based blockchain payments pioneer believes could help normalize the use of cryptocurrency in mainstream cross-border transactions.
BitPay will process payments for Binance, a Singapore-based exchange which counts 15 million users globally and through which nearly $3 billion in value is traded every year.
Specifically, BitPay will add support for its merchant customers to transact in Binance’s stablecoin, BUSD, a blockchain-based currency pegged to the U.S. dollar and approved by the state of New York’s financial regulator. BUSD is also now supported in BitPay’s consumer-facing mobile wallet, which has 2 million users globally.
Stablecoins, such as Facebook’s proposed digital currency, Libra, or a new digital currency introduced by China, are tied to the value of a fiat currency, bolstering trust by eliminating wide swings in value. Just in the past three days, for instance, the value of Bitcoin rose 20 percent amid a pandemic-wracked global economy.
“And it can fall just as easily,” Sean Rolland, head of product for BitPay, told Global Atlanta.
BitPay’s tools let companies sending and receiving payments across borders use blockchain “rails” to circumvent traditional bank wire transfers, which are relatively expensive and can take days to reach the recipient.
While BitPay processes crypto payments for huge companies like AT&T and Microsoft and online retailers like NewEgg, it also can support importers sourcing from overseas or multinationals sending intra-company payments to their international offices.
“We’re really building the tools for these international businesses to more easily, compliantly and securely interact with the blockchain and cryptocurrency,” Mr. Rolland said.
The transactions are free to the party sending the payment and a 1 percent transaction fee for the receiving merchant. BitPay is processing more than a billion dollars in payments per year.
So far, BitPay’s services are popular on trading corridors where the global payment infrastructure is underdeveloped, expensive or slow. It’s relatively affordable for now to send money from the U.S. to Europe, for instance.
But routings like Mexico to South Korea or Cambodia to Brazil present different challenges, Mr. Rolland said. When companies realize blockchain will help them avoid dealing with cumbersome, expensive intermediary banks, they are enticed to sign on.
“They’re like, ‘Wait…what? I can get paid the same day as when they send the money for a fraction of the cost?’ Mr. Rolland said. “The speed is really a big part of it too.”
BitPay CEO Stephen Pair said in a news release that the Binance collaboration will be a game-changer because it combines “flexibility of paying on the blockchain with the stability of the U.S. dollar.”
“The partnership with Binance is about more than supporting another stablecoin; it is about making cross-border payments simple and easy for both businesses by leveraging the global influence of Binance Exchange,” said Mr. Pair. BitPay also supports three other USD-pegged stablecoins.
In the interview, Mr. Rolland conceded that transacting in cryptocurrency can seem “scary” to the uninitiated. Prized by some for its anonymity, bitcoin and other cryptocurrencies are sometimes associated with shady online activity or speculative currency investment.
But Mr. Rolland pointed to the blue-chip companies that use BitPay’s services, noting that smaller ones can also benefit from the blockchain technology with the right tools and partner.
“It’s an education process. Instead of just reading the headlines, dig a little deeper. At BitPay we do over a billion dollars a year in payments, and I promise not one of them is involve in a dark market,” he said.
CZ Changpeng Zhao, founder and CEO of Binance, pointed to BitPay’s longstanding reputation as
“We believe a growing number of merchants and businesses will start adopting crypto, and we are glad to provide the payment solution together with BitPay, making the process simpler and easier.”
To help get U.S. consumers get familiar with cryptocurrency, BitPay has a downloadable wallet app on iOS or Android, and it even offers a Visa debit card.
BitPay has raised $70 million since its founding in 2011, including from investors in Asia. Its partnership with Binance came after it as a result of a newfound focus on business development in Singapore late last year.
The deal could open doors for Atlanta’s fintech community, which has taken delegations to Singapore’s Money 20/20 Asia conference in years past.
It’s unclear whether a group is still planning to attend this year after the pandemic pushed the conference back until August.