If you’re lucky enough to have bitcoins burning a hole in your digital wallet, you can now spend them over on whatever you want (or can afford) at Square Market. And, no, it’s not a lame April Fool’s PR stunt. We promise.
It’s true. We confirmed today that Square has indeed joined forces with Coinbase, a popular global Bitcoin wallet service, to allow merchants selling their wares through the mobile payment platform’s online store to easily, mostly painlessly accept the cryptocurrency as payment. And, of course, shoppers to pay with it.
The pain is in the per-transaction price, but it’s not really that much of a raw deal. As Recode pointed out, Square Market merchants will have to eat a 2.75-percent fee for each Bitcoin transaction. That’s the same cut Square takes for credit card purchases, yet notably more than a smidge higher than the 1 percent or less per transaction fee that most Bitcoin payment processors charge.
Square Market Lead Ajit Varma announced the Bitcoin news yesterday in a blog post. He laid out exactly how Square Market Bitcoin payments will go down. It’s a “simple” process, Varma said, and it’s “seamless” and “pretty magical to witness first hand!”
Seamless. Hmmm. Interesting word choice for a multi-step process that works like so: When a Square Market customer chooses the “Pay with Bitcoin” option, the e-retailer produces a new Bitcoin address to connect to his or her order. Then the company monitors that address throughout the checkout process to ensure that the payment is received.
Next, the customer submits their payment by opening their mobile Bitcoin wallet and scanning the QR code to bring up the transaction details. If a buyer has a web hosted Bitcoin wallet, they’ll be instructed on exactly how to enter the necessary information.
Hey, wait. Whatever happened to simple? Right. We are talking about Bitcoin here.
So, when the payment details are delivered to the customer’s wallet, they submit their payment to the network, Varma said. Then Square Market confirms that their receiving address was “successfully funded and automatically advance the buy to the order confirmation page.”
Also “keeping it simple for the seller,” Square Market merchants receive Bitcoin payments in USD “in the amount of USD advertised to the sellers’ customer at the time of transaction, so the seller takes no risk of Bitcoin value fluctuations.”
Coinbase will reportedly process Square’s BTC to USD exchanges. Then -- phew -- at last, the seller fulfills the buyer’s order. (We contacted Coinbase for additional details, but company officials declined to comment, deferring to Square public relations. Square was also contacted, but did not comment.)
Twitter co-founder Jack Dorsey launched San Francisco-based Square, best known for its small, slick and innovative iOS and Android plug-in mobile credit card readers, in 2010. The startup raised a total of $341 million in venture capital, with backing by heavy-hitter investors like billionaire Richard Branson, Yahoo’s Marissa Mayer, Biz Stone (Dorsey’s original Twitter wingman) and about two dozen others. According to TechCrunch, the steadily skyrocketing company is slated to process some $30 billion payments “this calendar year” and is reported to be valued at $5 billion.
Starbucks and Whole Foods recently partnered with Square to bring the company’s Square Stand iPad retail POS systems to their in-store checkout operations. Now, with Bitcoin payments expected to pour into Square Marketplace, we’re wondering how soon we’ll be able to pay for purchases with the virtual currency inside both and other Square-partnered brick-and-mortar businesses, if at all. We asked a Square spokesperson, who did not comment.
We’ll have to wait and see, but a Venti Starbucks Caramel Flan Latte paid for in BTC sure sounds good right about now. Anyone want to hook us up with a Starbucks gift card number to plug in over at Card For Coin? Uh, oh. Scratch that. It looks like Card For Coin, which once let Starbucks gift card holders trade gift cards for bitcoins, is down for the count while its owners predictably “sort out some regulatory issues.”Bummer. No Bitcoin Starbucks brew for you. Not yet at least.