It used to be that all you had to do was keep up with the speed of business and monitor your ever-evolving industry. Now, even money is different. In developed markets, people used to pay primarily with cash and check, then credit cards, and then debit cards coming in last. Thanks in large part to the millennial contribution to the market, there is now a huge shift away from cash and check payments to mobile payments. Large chain establishments like Burger King and Starbucks have gone to the extent of developing and launching their own payment apps. It may seem like no one uses cash anymore and members of younger generations can’t actually identify a check; however, 40 percent of people in the developed market still use cash and check, with 60 percent of people doing the same in emerging markets. Although the industry appears to some to be mature and static, there is still a lot of room for growth.
It’s not just payment processing that’s changing, but money as we know it. Bitcoin, the digital money that is exchangeable for real-world currencies, has been in the news for a while, but was commonly referred to as a joke, a passing fad. However, tens of millions of dollars in investment and important backers have made Bitcoin the little currency that could.
Last week, BitPay, a Bitcoin startup, announced that it raised $30 million in a funding round that included famous investors like Peter Thiel, the founder of PayPal, Li Ka-shing, a Hong Kong billionaire, and Sir Richard Branson, the British entrepreneur behind Virgin. Branson also announced that his luxury commercial spaceflight company called Virgin Galactic will accept Bitcoins as payment. It seems like Li Ka-shing may Branson’s target audience: exorbitant money to spend on recreational spaceflight and an avid believer in Bitcoin. However, Bitcoins have spread to nearly every market on the planet. BitPay reportedly processes $2 million in Bitcoin payments daily for a roster of more than 30,000 merchants.
On May 20, it was reported that eBay CEO John Donahue is considering integrating Bitcoin into PayPal, as he believes that it is the currency of the future. This marks the evolution in currency and in the public opinion of Bitcoin. Previously, eBay listed Bitcoin as a competitor and then PayPal CEO David Marcus said that he was interested by Bitcoin - and now there is speculation of linking the systems. This is not the evolution of generations that Darwin wrote about - these changes are occurring at the speed of business.
Recently, The Bitcoin Foundation held its annual conference in Amsterdam. Overstock.com CEP Patrick Byrne delivered the keynote speech, Circle Internet Financial revealed plans to create a free service that uses Bitcoin as a platform for money transfers, and BitPay CEO Tony Gallippi discussed the payment processor’s growth. It is full steam ahead behind the Bitcoin system and it appears that the question is “When will Bitcoin change the way we process payment as we know it?” not “if.”
By all accounts Bitcoin is still a burgeoning technology that will not alter the way Jane Smith sells socks online… yet. Bitcoin will most likely not replace other, more traditional forms of payment, but it will aid in the industry’s change - and your business better be prepared to change with it.
Posted By Svetlana Binshtok