AMSTERDAM | Adyen - in partnership with BitPay - today announces it has enabled the acceptance of Bitcoin payments for Jagex, the UK-based developer behind the popular game MMORPG RuneScape. Jagex is the first merchant to accept bitcoins with the Adyen payments platform and is the first customer live with Adyen’s integration of BitPay, world’s largest bitcoin payment processor.
The Rise of Bitcoin
The announcement by Adyen and BitPay follows increasing investments in the Bitcoin ecosystem. Many bitcoin exchange services, bitcoin wallet providers and bitcoin processors like BitPay saw additional investments - over $400 million - to further boost bitcoin acceptance and usage. Last year, the cryptocurrency bitcoin has been adopted by a growing number of leading global brands, including Microsoft, Newegg, Virgin, and Takeaway.com.
Despite the horror stories of bitcoin exchange services being hacked and bitcoin rates going down, the bitcoin system itself seems untouched and still well-positioned for future expansion. The bitcoin volumes processed by bitcoin acquirers and exchange services have grown substantially in 2014. The total of bitcoin trading volume processed last year surpassed the 23 billion US dollar (+53% compared to 2013). As a person-to-person payment mechanism and payment method for e-commerce and in-app purchases - with fairly limited costs for both consumers and merchants - bitcoin has definitely its advantages over other types of online payment methods.
Bitcoin payments are irreversible which means transactions can not result in a chargeback to the merchant. The fees that online merchants need to pay for the acceptance of bitcoin transactions are most often fixed and not a commission or percentage of the purchase amount. In addition, Bitcoin processors like BitPay fully absorb the currency conversion risk when converting bitcoin into the merchant's home currency (e.g. US dollar or euro). In other words - for merchants willing to accept bitcoin payments - the risk is low and transaction costs limited.
Expand bitcoin adoption
“Interest in bitcoin continues to grow among merchants. And as a business focused on merchant needs, we are excited to give merchants the ability to securely accept bitcoin payments, alongside over 250 payment methods and 187 transaction currencies that we currently offer,” said Roelant Prins, chief commercial officer, Adyen.
“Merchants choosing Adyen and BitPay will receive all the advantages of working with a stable, scalable payments platform, where bitcoin is seamlessly integrated into the Adyen payments flow, reporting, and settlement,” said Tony Gallippi, BitPay’s Co-founder and Executive Chairman. “Adyen is a great company and a great partner to help expand bitcoin adoption worldwide.”
To understand the phenomenon bitcoin a little bit better, it might be best to determine bitcoin as virtual coins (money) that can be transferred across the web without using banks or other financial institutions. Bitcoin payments are confirmed by the bitcoin network itself - without any central authority controlling it - consisting of many computers called 'bitcoin miners'.
Every bitcoin payment is send to some sort of publicly open database - called the 'blockchain' - wherein all bitcoin transactions are contained. Upon entry of a new bitcoin payment, the miners need to 'enclose' and encrypt the new bitcoin transaction in this database and add it to the blockchain. Computers involved in the transaction confirmation are rewarded with bitcoin.
Well-suited for gaming and digital goods
Jagex - being an early adopter of the now-common free-to-play gaming model - is now offering bitcoin as a payment method. By offering bitcoin – a digital payment method ideally suited for gaming and digital goods - it is reinforcing its position as a gaming technology leader among its tech-savvy users.
David Parrott, payment services director at Jagex, said, “An advantage of bitcoin is that it is still new and shiny enough to generate interest in the payment experience simply through the fact that it exists. As a business that operates on a freemium model - where the payment process needs to be compelling enough to convert cost free customers into paying ones - not having a barrier to entry for bitcoin users makes sense.”
Adyen is a leading payments technology company that provides businesses a single global platform to accept payments anywhere in the world. Adyen enables businesses to process payments across online, mobile and Point-of-Sale (POS) with over 250 payment methods and 187 transaction currencies. Headquartered in Amsterdam and San Francisco, Adyen serves more than 3,500 businesses and four of the five largest U.S. Internet companies, including well-known brands such as Facebook, Airbnb, Spotify, Groupon, and Booking.com.
BitPay is the global leader in Bitcoin payment processing with offices throughout North America, Europe, and South America. The company has raised over $32 million from top investors including Index Ventures, Founders Fund, and Sir Richard Branson.
Article sourced from Press Release by Adyen and BitPay, February 3rd, 2015.