Paige Freeman, VP Sales – Bitpay

With bitcoin at the forefront of currency innovation and payment discussion, we at Payment Magnates want to keep merchants informed

With bitcoin at the forefront of currency innovation and payment discussion, we at Payment Magnates want to keep merchants informed about their options when it comes to processing payments and bitcoin as an alternative payment method should be considered seriously.

We were given the opportunity to pick Paige Freeman’s brain. As Bitpay’s Vice president of Sales, bitcoin payment processing provider and co-founder of Women in Bitcoin, her knowledge of the crypto-currency is extensive. We hope that you find her input to be both informative and helpful for your businesses. We aimed our questions toward topics that are relevant for you to assess whether you should add bitcoin to your payment methods arsenal or not

Join the iFX EXPO Asia and discover your gateway to the Asian Markets


Payment Magnates: Is Bitpay a Payment processing provider or an alternative payment method provider?

Paige Freeman: The best way to describe BitPay is that we are the leading payment processor for bitcoin. Our mission is to make it easy for businesses to accept bitcoin as a form of payment.


PM: Are you required to have a Compliance and underwriting department to assess merchant applications? For instance do gambling operators or forex brokers have to be licensed or regulated to be able to process bitcoins?

PF: We are not required; however, we do have a thorough application process for every merchant requesting to use BitPay’s services. We have three different tiers of approval based on transaction volume. BitPay also requires extensive background information and certification from our merchants selling high ticket items.


PM: Please describe in detail to our online merchants readership the process of using Bitpay to offer bitcoin payments to end-users: where are the funds held, how often are they settled, the involved rates and fees, the timeframe for account opening etc.

PF: The first step for a merchant is to sign up at It’s free to get started and we only need your contact information, website, and general details about your business. Once we receive the application, it takes approximately 24-48 hours to get approved. We only charge a low 0.99% transaction fee which is a third of the cost of credit card and PayPal transactions.

Once approved, the next step is to start using one of BitPay’s tools on your ecommerce store, or integrate your shop with our API directly. If your company has already worked with credit card gateways and/or PayPal, then it will be easy to do.  When a customer selects that they want to pay with bitcoin, BitPay takes the total amount in your local currency, calculates the equivalent number of bitcoins at that moment in time, and presents the amount on your checkout page. Once BitPay receives the payment and confirms that the invoice has been paid in full, we notify your website’s server that the order is paid. Our merchants do have the option to receive settlement in their own currency, or keep the bitcoins. If a merchant chooses their local currency, BitPay settles each business day with a direct deposit to the merchant’s bank account.


PM: Is the bitcoin processing solution suitable for high volume accounts (500K$, 1M$ or more each month), and could high volumes potentially be an issue for USD or EUR settlements?

PF: It is absolutely suitable for high volume accounts.  BitPay currently processes more than $6M/month and that number is growing. Over the last two years, we have processed over 50,000 transactions without any issues. Some of our merchants have processed more than $500K/day!


PM: With the discrepancy between MtGox bitcoin rate and the other exchanges, how do you ensure a fair and accurate rate when settling your merchants’ funds?

PF: BitPay does not work with Mt.Gox and we haven’t for a while now. What we do is pull the full level II market depth, on the bid side, from multiple exchanges. We then merge the market depths into one Consolidated Level II table. After that, we calculate the blended clearing price for the amount of the invoice, assuming an auto-routing market sell order across all exchanges, with zero commission.


Suggested articles

GIBX Swap: Sky is the Limit for the Best Decentralized Exchange PlatformGo to article >>

PM: What are the advantages for Ecommerce businesses to start accepting bitcoin and what are the challenges?

PF: There are so many advantages! For starters, much lower transaction fees compared to Visa, Mastercard and PayPal and you can now accept an irreversible payment from anyone on the planet. There is also no payment fraud because bitcoin doesn’t require identification like typical credit card companies or PayPal. The only challenge I see is that you will need a technical resource who knows how to integrate with our API. Other than that, you may need to educate customers on how to buy and pay with bitcoin if they don’t already know how to do it.


PM: Many merchants need features like recurring billing to charge for subscriptions each month, how does Bitpay deal with this?

PF: At this point, the merchant will need to notify their customers wishing to pay in bitcoin each month and we recommend requesting an email address to contact them. One advantage is that bitcoin payments are irreversible so there won’t be any chargebacks, and it gives merchants the opportunity to upsell on a more frequent basis.


PM: In our interview with Jeffrey Tucker, we discussed the accounting aspect of processing and holding bitcoins. Can you please describe the financial and accounting aspects that merchants must take into account when dealing with bitcoin and how this is not more administrative headaches (tax, VAT …) than a convenient and new solution? For instance, if a merchant settlement in his local currency occurs after a week for instance and during this time the value of bitcoin has increased, would the merchant need to declare interest on the currency in addition to the income?

PF: We guarantee the exchange rate for our merchants and insulate them from the volatility of bitcoin. It doesn’t matter if the price of bitcoin goes up or down in a week prior to a merchant settlement, because BitPay assumes all risk. If you sell an item for $100, you will get your $100 minus our 0.99% fee. Everything the merchants see will be in dollars or their local currency so there will never be any accounting headaches since you never have to handle bitcoin. Also, BitPay now lets merchants track bitcoin sales in Quickbooks! It’s just another way we are making it easy for merchants to accept bitcoin.


PM: According to a recent survey from Glenbrook Partners, 44% of the payment industry professionals believe that regulation on bitcoin like the recent FinCen ruling on digital currencies could very well slow the online merchant adoption of bitcoin. Do you believe that all the recent actions by the governments around the globe to regulate or even ban the usage of bitcoin could have such a negative impact on the adoption of bitcoin by online merchants?

PF: Any press about regulation, whether it’s positive or negative towards bitcoin, will draw attention to how this global payment system is changing the world and that’s a great thing. I actually believe it will only increase the speed of adoption because as more companies learn about bitcoin, they are going to want to start accepting it.


PM: A lot of interest for bitcoin relies on the belief that its value will increase. Why would bitcoin really turn into a currency massively used for paying goods and services? Do you forecast, and how do you see it happening, that this switch will eventually happen and that bitcoin will not just remain a commodity that people hoard as a saving like gold?

Bitcoin will have faster adoption in countries where there are real currency problems. People want to take back control of their earnings and have access to their money whenever they need it. As the price of bitcoin rises, we actually see more people spending it and it’s a more portable way of spending your investment unlike gold.


PM: Finally, can you make a forecast on the future of bitcoin in terms of value and usage, within a year and within 5 years from now?

PF: I believe bitcoin is undervalued and that the price is going to increase dramatically. It’s hard to predict what will happen in the future, but we had 1,000 merchants accepting bitcoin a year ago and now we have over 10,000. I’d say that’s a great sign that things are heading in the right direction.



Got a news tip? Let Us Know