Payments processor Stripe announced Friday (April 22) that it has added support for cryptocurrency payments on its Stripe Connect platform, with Twitter as its first customer.
Initially, payments will be made in Circle’s USD Coin, the second-largest of the dollar-pegged stablecoins, with support for other cryptocurrencies are coming soon, Stripe CEO John Collison said in a tweet.
Businesses can now use Stripe to send crypto payouts. We’re excited to power Twitter as our first partner—enabling their creators around the world to get paid in $USDC.
More to come—we’re adding support for other currencies and rails! https://t.co/mp4nOFFFEo https://t.co/LH2lJKwTrF
— John Collison (@collision) April 22, 2022
Saying the product is aimed at “creators, freelancers, sellers and solopreneurs,” Stripe Crypto Product Manager Karan Sharma noted in a Friday blog post that while “it’s easier than ever before to find customers and fans, getting paid can still be difficult, especially outside of major markets.”
While Connect currently supports programmatic payouts in more than 70 countries’ currencies, many other nations are still out of reach because of the complexity involved with adding local payments capabilities, Sharma said.
“Unfortunately, this makes participation in the online economy harder for many of those who stand to benefit most,” he said in the post. “… We’re excited about what this represents and about the potential for cryptocurrencies to help solve real-world problems, especially outside of major markets.”
Noting that crypto’s ability to support “open-access global financial rails” can unlock broader access, he added that plans call for Stripe’s Global Payments and Treasury Network (GPTN) infrastructure for global, programmable money movement to support crypto payouts in more than 120 countries by the end of the year.
It can also handle anti-money laundering (AML) identify verification requirements of crypto payments.
Stripe announced March 10 that its Stripe Radar product would handle those services for leading cryptocurrency exchange FTX and FTX US.
Starting With Twitter
Stripe has piloted crypto payments on Twitter, which already uses Stripe Connect to pay content creators in its Ticketed Spaces and Super Follows monetization programs.
Read more: Stripe Connect Launches Crypto Payouts to Help Freelancers Get Paid
“Twitter is where people go to have conversations about what’s happening,” said Esther Crawford, the social media giant’s product lead for creators. “We’re focused on helping creators who drive those conversations earn money and connect with their audiences in new ways.”
The addition of Connect crypto payouts will be handled behind the scenes, with no code changes required, Sharma said. And, Connect will acquire, hold and send the cryptocurrency, so customers will never have to manage the regulatory and security issues associated with cryptocurrencies as they will never handle it.
“We’re excited to begin offering crypto payouts to creators via Stripe so they have more choice in how they get paid,” Crawford added.
This isn’t Twitter’s first foray into crypto, however. Last September, the company added bitcoin payments to the tipping program using bitcoin payments provider Strike’s application programming interface (API). That happened when the company was still run by Jack Dorsey, now CEO of Cash App builder Block. He’s what the crypto industry calls a bitcoin maximalist, meaning he only believed in using bitcoin for payments.
See more: Twitter Adds Strike API for Tips Paid in Bitcoin
Strike announced April 8 partnerships to bring crypto payments to Shopify, NCR point-of-sale (POS) terminals and prepaid payments provider Blackhawk Network. To avoid the high transaction fees and slow finalization speed issues with bitcoin’s blockchain, Strike handles the transactions on the Lightning Network, a so-called Layer 2 solution that essentially piggybacks another blockchain that is faster and cheaper on top of bitcoin, merely sending bundles of finalized transaction data back to the Layer 1, where it is added to the permanent blockchain ledger.
Read more: Bringing Bitcoin Firmly Into Payments, Strike Partners With NCR, Shopify, Blackhawk
Built on Polygon
That is very similar to what Stripe is doing to create its Stripe Connect platform’s cryptocurrency capabilities. It is built on Ethereum, the No. 2 blockchain, which has the same speed and transaction fee issues as bitcoin.
To get around those limitations, Stripe is using Polygon, an Ethereum-based Layer 2 solution that processes transactions — including more complex smart contract-based transactions available on Ethereum — while sending bundles of processed transaction data to be written onto Ethereum.
While it’s generally lumped in with the “Ethereum killer” blockchains like Algorand, Avalanche, Cardano and Solana, which are competing blockchains, Polygon is aimed at making Ethereum transactions more efficient, making it more of an “Ethereum savior.”
See also: What is Polygon? An Ethereum Killer Hedges Its Bets
One difference is that many cryptocurrencies are either built on Ethereum-standard or Ethereum-compatible tokens.
Along with additional cryptocurrencies, Stripe said it plans to add more crypto payments rails to Connect.
NEW PYMNTS DATA: THE FUTURE OF BUSINESS PAYABLES INNOVATION STUDY– APRIL 2022
About: While over half of SMBs believe that an all-in-one payment platform can save them time and improve visibility into cash flows, 56% believe that the solution could be difficult to integrate with existing AP and AR systems. The Future Of Business Payables Innovation Report, a PYMNTS and Plastiq collaboration, surveyed 500 SMBs with revenues between $500,000 and $100 million to explore how all-in-one solutions can exceed SMBs’ expectations and help future-proof their businesses.
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