CEX.IO News Education

What are Bitcoin Payment Service Providers?

, October 3, 2014

Bitcoin payment service providers (PSP) enable customers and merchants to buy easily and sell goods over the internet using Bitcoins. Bitpay, one of the leading Bitcoin payment service providers, is the main processor for many leading industries such as Newegg, Shopify, and Gyft. Before checkout, most websites normally have a sign that reads “Bitcoins Accepted Here.” If customers choose the option to pay for their goods in Bitcoins then, more often than not, they a PSP such as Bitpay or Coinbase. Merchants also have the option to accept Bitcoin payments on their own using applications such as multibit if they choose not to have any third party involvement.

There are many benefits of Bitcoin payment service providers, but first, and most important of all, is that they are not only free to integrate but also free to run forever. This, however, is nothing new since other more tradition payment service providers, such as PayPal, already offer this. To stand out from any ordinary PSP, many Bitcoin payment service providers do not charge a processing fee on any transactions. Bitpay, for instance, does not charge any fees on their basic plan, but provides premium options in which they do charge extra for perks such as phone support and sales integration.

The growing popularity of most Bitcoin service provides is due to its basic simplicity. Upon checkout, customers choose to pay with Bitcoins and are redirected to the page of the Bitcoin payment service provider. Customers are then given the choice to send their Bitcoins by copying and pasting the receiving address or scanning the QR code provided. Once the Bitcoins are sent initial confirmation is instant, and the checkout process is complete. This method only takes a fraction of the time it would take to enter in credit card and billing information.

PayPal, the most popular payment service provider, is accepted at nearly seventy percent of all online retailers. Recently, PayPal has integrated Bitcoin into their system making it possible for customers to spend their Bitcoins at any online store that accepts PayPal. With the integration of all of these Bitcoin payment service processors, goods are slowly becoming more easily bought with Bitcoins rather than having to convert to fiat money first. They are the backbone of Bitcoin economy making it much easier to adopt and spend.

By Rocky Patel for CEX.IO

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