BitPay Signs 1,000 Merchants to Accept Bitcoin Payments

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It may be getting easier to buy with Bitcoin.

BitPay, an Orlando-based company that helps online merchants accept the digitized currency as payment, said Tuesday more than 1,000 merchants have signed up for its service in the past year.

Merchants who have signed up for BitPay include GamerKeys, a seller of downloadable computer games; the 2012 campaign of Erik Olson, a libertarian candidate for Congress from North Dakota; and Whiskey Dicks bar in Orlando.

About 60% of merchants who use BitPay's service are in the U.S., with another 25% in the U.K. and Europe. In all, merchants in about 98 countries process bitcoins via BitPay.

"Businesses suddenly get it in terms of seeing the value proposition once they realize credit cards were never designed for the Internet," BitPay co-founder and chief executive Anthony Gallippi told American Banker.

Bitcoin lets users move money instantaneously to others on the bitcoin network. The virtual tender had an estimated 740,000 users worldwide in 2011. Gallippi estimates the number now stands at more than a million.

Though BitPay markets a mobile checkout application that enables merchants to process transactions from customers who pay with bitcoins in person, the company aims to fuel its growth online.

"We want to focus our growth on the Internet because that's where we've solved the fraud problems and eased collecting payments across international borders," Gallippi added.

Merchants who use BitPay for online payments pay a fee of 2.69% of the gross transaction. Square, a mobile payment vendor, charges 2.75% per swipe for all major credit cards. PayPal charges merchants 2.9% plus $0.30 per transaction, though the rate can vary with volume. But neither Square nor PayPal processes bitcoins.

BitInstant, a New York-based start-up, told American Banker recently the company plans to introduce a reloadable, pre-paid debit card that will enable users to convert bitcoins to dollars for use wherever MasterCard is accepted.

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