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The up-and-down course Bitcoin has followed in recent months continued on Monday as Square Inc. announced it has started accepting the digital currency on Square Market, the online marketplace it unveiled last June. The news lent some legitimacy to Bitcoin just as the currency was reeling from an Internal Revenue Service ruling last week classifying it as property rather than as a currency.
Square is relying on San Francisco-based processor Coinbase Inc. to handle Bitcoin transactions, including instant conversion to U.S. dollars. But the transaction fee to merchants for payments with Bitcoin remains the same 2.75% Square charges for all other Square Market transactions, a Square spokesperson tells Digital Transactions News.
Best known for its iconic, cube-shaped card reader for smart phones, Square decided to allow merchants on its marketplace to accept Bitcoin so they could capture sales they might otherwise miss, a Square executive says in a blog post. The company has also programmed a streamlined process to ease Bitcoin acceptance, according to the post. “What was in it for us was to make commerce easier for our merchants,” the spokesperson says.
The spokesperson could not break out the number of merchants now selling on Square Market, though the e-commerce platform had 500,000 sellers by late October, according to press reports at the time.
In the blog post, Ajit Varma, Square Market lead, says Bitcoin users can start a transaction by selecting “Pay with Bitcoin” at checkout. This action generates a so-called Bitcoin address that Square can use to verify that payment has been received. Mobile-wallet users can scan the wallet’s QR code. Those using a Web-based wallet can enter their information according to instructions from Square.
Once details are submitted, the Bitcoin address attached to the order detects the order has been paid for and sends the user to the confirmation page. The seller receives payment in dollars at the advertised price and fulfills the order. “It’s exciting to take another step towards helping sellers reach more customers and making commerce easy for everyone,” Varma says in the post.
Square Market’s decision to accept Bitcoin is the latest in a string of good news/bad news developments for the digital currency in the last few months. The good news includes acceptance by major merchants Overstock.com and Lord & Taylor. Besides the IRS decision, the bad news includes wild price swings and the collapse of Mt. Gox, a major Bitcoin exchange. Last week, authentication-technology provider Jumio Inc. announced the formation of a network, including major exchanges, to verify Bitcoin buyers.
