The collapse of Bitcoin and many other cryptocurrencies in 2018 led to a general feeling of pessimism in the mainstream payments industry about the prospects for digital currencies, but at least one specialist processor apparently bucked the trend toward malaise.
In a year-end review of its performance, Atlanta-based BitPay Inc. said late Wednesday it processed more than $1 billion in payments in 2018 for the second year in a row. This is despite a harrowing slide in Bitcoin’s value that saw the digital coin drop from $13,791 Jan. 1 to $3,768 by the end of the year. “To process over a $1 billion for a second year in a row despite Bitcoin’s large price drop shows that Bitcoin is being used to solve real pain points around the world,” said Stephen Pair, BitPay’s co-founder and chief executive, in a statement.
The 7-year-old company also said it set a new record for transaction-fee revenue during the year, without stating the number, and added several major new accounts, including Dish Networks, HackerOne, and the state of Ohio.
The company highlighted its performance in business-to-business payments, where it said its volume grew 255% with the addition of “many” law firms, data centers, and information-technology vendors as clients. “BitPay’s B2B business continues to grow rapidly as our solution is cheaper and quicker than a bank wire from most regions of the world,” said Pair.
BitPay underscored the importance of B2B payments with the hiring of Rolf Haag during the year as head of industry solutions with responsibility for B2B. Haag is a former Western Union and PayPal executive.
Another move forward during the year, Bitpay said, came in its campaign to cut transaction error rates. The dollar volume involved in cryptocurrency payment errors fell to less than 1% of total dollar volume from a rate exceeding 8% in December 2017.
BitPay says the credit for this goes to a feature called Payment Protocol that the company introduced in April as part of a refresh of its Checkout app. At the time, the company touted the feature’s effectiveness in correcting mistakes such as over- or under-payments and payments sent to the wrong address or with insufficient miners’ fees. Instead, the programming locks in the correct information for each transaction.
“The adoption of support for Payment Protocol wallets has made a big difference for our merchants,” said Sean Rolland, head of product at BitPay, in Wednesday’s release. “Merchants are now able to easily accept Bitcoin payments in a simple, easy way without any support issues. This was our biggest request by our enterprise merchants.” The feature was intended to bring Bitcoin to more brick-and-mortar merchants, but the company did not specify a merchant count.
While BitPay added support for Bitcoin Cash and a few other coins during the year, it says it remains “laser-focused” on Bitcoin. “Bitcoin has the network effect around the world and we are still extremely bullish on Bitcoin and the Bitcoin ecosystem,” Rolland said.
Head count at the company grew 78% during the year to nearly 80, Bitpay said, while it raised $40 million in Series B funding, bringing its total raised capital to more than $70 million.