Will Payment Giants Really Allow Merchants to Accept Bitcoin?

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  • The news that Visa is planning to join MasterCard in implementing bitcoin into its payment processing platforms has stocked an ‘accepting Bitcoin’ debate
  • Payment processors will convert the bitcoin at point of sale, which some will say does not constitute acceptance
  • Can Bitcoin supporters really say that millions of merchants will suddenly accept bitcoin?

Visa recently announced that it is to join MasterCard in the race to facilitate bitcoin payments on its platform, news that was greeted with great fanfare within the cryptocurrency community. However, as with MasterCard, Visa’s process will involve converting the bitcoin to the local currency prior to the sale going through, much as cryptocurrency debit cards do now, so can we really say that millions of merchants will suddenly ‘accept bitcoin’?

A Matter of Semantics

The concept of ‘accepting’ bitcoin is the crux of the issue, and indeed it could come down to semantics. Bitcoiners would argue that if you can use your bitcoin to pay for anything where Visa and MasterCard are accepted then those merchants therefore accept bitcoin. Critics however would argue that because MasterCard and Visa are swapping the bitcoin for the local currency at point of sale, the merchants are in fact not accepting bitcoin but their local currency instead.

Both have a point – such integrations will allow you to use your bitcoin as a means to pay for something, but the merchant is not taking your bitcoin as payment. If the payment went from your bitcoin wallet to the merchant’s bitcoin wallet without being converted, as is the case with the likes of Scan and Newegg, then we can definitively say that those companies accept bitcoin. Otherwise, from a purely technical standpoint, merchants that accept bitcoin through any MasterCard or Visa integration, or almost all crypto debit cards out there today, they are not even touching bitcoin – they could just as well say ‘turtles accepted here’ if those turtles were converted to the local currency before the sale concluded.

Ideological Arguments Behind Bitcoin Acceptance

There is also a more ideological side to the ‘accepting Bitcoin’ debate – what the merchant does with it. If a merchant sells a customer’s bitcoin as soon as it arrives, then can we truly say that merchant ‘accepts’ bitcoin? In the most literal definition it accepts Bitcoin, in that it willingly receives it in exchange for goods and services, but it doesn’t accept bitcoin in an ideological sense.

Those merchants with ‘bitcoin accepted here’ stickers in their windows have made a deliberate choice to accept bitcoin as a form of payment. They will likely hold that bitcoin through a belief in the fundamentals of the protocol, only selling what they need to sell in order to pay the bills. Those whose bitcoin payments are converted to fiat currency at point of sale can’t technically say that they accept bitcoin, and probably wouldn’t know anything about it either way, while those who accept bitcoin and then sell it straight away operate in a kind of middle ground, neither one thing nor the other.

Crypto Feels the Benefit Either Way

Of course, the fact that Visa and MasterCard are putting time and resources into adopting cryptocurrencies at all is great for the space, and creates headlines that counter the argument that ‘you can’t buy anything with bitcoin’. However, if you look at the nuts and bolts of what is coming down the line, the number of stores that ‘accept’ bitcoin in the truest sense is not going to change with any large scale adoption that major payment processors might bring.