According to a recent study, more than half of retailers using Square have said that they would like to be able to accept payments in Bitcoin instead of USD. Nomura Instinet surveyed merchants who made at least $100,000 in annual revenue. 60% of respondents said they would rather accept Bitcoin over USD.
As more people are starting to get involved with Bitcoin and other cryptocurrencies, consumers are looking for more ways to use them. With the development of the Lightning Network well under way, the current demos using the network are looking very promising.
Square is Set to Open the Door
Jack Dorsey (Square CEO) is a well-known supporter of Bitcoin, as he has heavily backed the Lightning Network with a large investment into Lightning Labs. Earlier this year, Square Cash enabled users to buy and sell Bitcoin directly through their mobile app.Many believe this was a forerunner to enabling Square’s merchant terminals into accepting Bitcoin. By familiarizing users with Bitcoin and creating a Square Bitcoin user base, this could be seen as preparation work to roll out a new merchant feature.
Since this feature was added to the Square Cash app, merchant users have been begging Square to add Bitcoin as an accepted payment method. Within the Square seller community, this question has been asked frequently, and customer service staff appear to be keeping a tight lid on what’s happening.
How Could Square Make Bitcoin Payments a Reality?
If Square was to go ahead and integrate Bitcoin payments with their POS terminals for merchants, it would most likely not be until the Lightning Network is fully tested and active. With Dorsey being such a heavy investor in Lighting Labs, there is good reason to believe that Square has access to the latest features and advanced support from the developers. This means that Square could already have a Bitcoin payment system in the developmental stage.
The much discussed merchant Bitcoin payment system would have to run on the Lightning Network, as currently the transaction fees for Bitcoin are prohibitive of microtransactions. On the Lightning Network beta 0.4 however, microtransactions appear to be working very well – one developer even built a microtransaction version of Pokémon.
What Will 2 million New Bitcoin Merchants Mean?
Square does boast over 2 million merchant accounts, so if it does roll out a Bitcoin payment method, there is a good chance that only half of those merchant terminals will ever receive Bitcoin. When you consider there are roughly 7 billion people around the globe, 2 million Square merchants begin to feel like a drop in the ocean.
If Square does implement a Bitcoin merchant solution, it would be a huge boost for the Lightning Network and Square. However, a handful of competitors have made leaps and bounds to catch up with Square over the last few months. BitPay has been making serious waves in Bitcoin merchant adoption, processing $1 billion in payments during 2017 alone.
In addition to BitPay, Coinbase announced Coinbase Commerce last year. Coinbase is interesting, as it has over 13 million active retail users, who actively trade on the platform.
All three of these businesses are approaching a Bitcoin merchant terminal in a slightly different way, so there are certainly some exciting months ahead.