Coinbase unveiled another incentive for merchants to start accepting Bitcoins. Starting today, payment processing is now free for everyone for your first $1 million in orders. After that, the regular 1 percent fee kicks in. While Bitcoin payment is still a novelty, removing the processing fee makes it a compelling alternative compared to PayPal’s fee (2.9 percent + $0.30 per transaction).
Coinbase provides all the tools you need to accept payments on your website. The API allows you to easily integrate Coinbase’s checkout screen into your website’s workflow. In other words, from the user’s standpoint, it makes paying in Bitcoins as easy as paying with PayPal, Amazon Payments or Google Wallet.
The company currently supports one-time payments, donations and recurring subscriptions. And if you don’t have Bitcoins on your account, Coinbase uses your regular bank account to purchase Bitcoins and pay for the transaction. Reddit and OkCupid already use Coinbase to process Bitcoins.
The two other advantages of accepting Bitcoin payments is that there’s no chargeback and transactions are instantaneous — a Bitcoin is just a chain of characters. Removing the merchant fee will appeal to merchants who handle micro transactions, as fees can add up pretty quickly when you take into account PayPal’s $0.30 flat fee.
There’s a catch. If you want to exchange your Bitcoins into USD, EUR or any local currency, you’ll have to pay 1 percent + $0.15 per transaction. It is still a lot cheaper than PayPal, but you have to take this into account. This is a non-issue if you’re ready to keep Bitcoins in your Coinbase account and use it for Bitcoin payments, but many high-profile websites will probably want to exchange their Bitcoins to reinvest the money.
One last thing to take into account: The value of a Bitcoin changes a lot over time due to volatility. And of course, it is still a very marginal currency. Before breaking the $1 million barrier, you’ll have to wait a long time. That’s what Coinbase wants you to think. Why wouldn’t you try Bitcoin payments on your website? Now it’s free.
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