A few days back i wrote about Stripe beginning to test payments for Bitcoins among certain users. In another major development, payments giant Square announced today (1st April, 2014) that Bitcoins could now be utilized to purchase goods and services via Square Market.
“We’re building tools so sellers can accept any form of payment their customers want to use. Making commerce easy means creating easy ways to exchange value for everything from a massage to a DODO case for your iPad. In that spirit, starting today, buyers can purchase goods and services on Square Market with Bitcoin,” stated Square’s blog post.
How does it work?
- When a buyer opts to “Pay with Bitcoin” Square will first generate a new Bitcoin address and attach it to the order.
- They will constantly monitor this address all through the checkout process to realize when they have received payment.
- The buyer then submits their payment, explains the blog post.
- Buyers with a mobile Bitcoin wallet, can just open their wallet and scan the QR code to load the transaction details.
- People that possess a hosted Bitcoin wallet receive instructions for entering the required information.
- The buyers submit their payment to the network as soon as the payment details are loaded into the buyer’s wallet.
- Thereafter, Square detects that their receiving address was successfully funded and automatically advances the buyer to the order confirmation page.
- The seller receives the amount of the purchased goods or services in USD and in the amount of USD advertised to the sellers' customer at the time of transaction, and then the seller fulfills their customer's order.
Square’s integration with Coinbase means that online merchants who already use Square Market can now accept Bitcoin with a single click - this could have significant impact on the cryptocurrency world. However, merchants will not be allowed to retain the Bitcoins sent by their customers. Rather they will be converted into dollars instantly.
This is a good move in the direction towards enabling Brick and Mortar retailers such as KFC and Starbucks to accept Bitcoin payments in the future. Square has not yet revealed a transaction fee for Bitcoin transactions but it is expected to be lower than the current rate of 2.75% per transaction.