Interview with Merrick Theobald VP Marketing at Bitpay on accepting Crypto Payments in Ecommerce and Retail

Accepting Crypto Payments in Ecommerce and Retail. Interview with Merrick Theobald VP Marketing at Bitpay

Transcript:

Darius 0:01 Welcome to the retail tech podcast where we speak with leaders and entrepreneurs involved in all aspects of retail and commerce. My name is Darius Vasefi the host and producer. This interview is being recorded on clubhouse and will be published on retailtechpodcast.com. After this first set of questions, we'll be answering the audience questions. So if anybody joins and wants to ask questions, you can raise your hand later on. Today I'm speaking with Merrick Theobald from Bitpay. And we are going to talk about and learn about how to use cryptocurrencies like Bitcoin and other types of digital currencies in retail for payments. Welcome, Merrick.

Merrick 0:53 Thank you Darius for having me. It's a pleasure to be here.

Darius 0:56 Thank you. Let's start by just a brief intro on yourself and how you got to be working at bitpay.

Merrick 1:07 Yeah, absolutely. I've been in financial services FinTech community for over 20 years. Many years ago, I started with a company called check free. I don't know if you're familiar with check free, but

Darius 1:21 Yes heard the name actually

Merrick 1:23 started online Bill presentment. And payment. So that's what we were known for, then we were actually acquired by a much larger company today, five serve, probably no five serve. So I was with them for a number of years. And then I eventually moved on to a couple different startups, both in the money transfer arena, and worked for two different startups. And then ultimately, I've been with bitpay for the last year. So I'm excited to be in blockchain payments. I like payments in general, but I found blockchain payments. Very interesting. And that's why I'm with bitpay. Today.

Darius 2:02 Alright, so that's probably an interesting background to go from traditional payments into digital payments. Did did it take you some time to convince yourself that this was the future? Or?

Merrick 2:17 Well, if you look at each company that I was with, we were really trying to disrupt the payment industry with what we were doing, you know, when when I was with checkfree, the internet first started, people were still writing paper checks, but there's a better way to to pay for things. And that was through a, you know, electronic check or an a CH transaction online. So every company that I've been with, we are disrupting and trying to improve the payment infrastructure and payment industry. So it wasn't that big of a jump to move into blockchain payments. Okay,

Darius 2:51 so I guess the common theme for you is disruption.

Merrick 2:56 Correct. Right. And I say disruption in a positive way, because it's improving, improving what we were doing in what we are doing so disruption, right, in a positive way. Absolutely.

Darius 3:07 Positive disruption. Yeah, I guess. Innovative disruption.

Merrick 3:12 Yes. Very much. So.

Darius 3:13 Yeah. Okay, that's cool. So So What bitpay?

Merrick 3:20 Well, I did a lot of research. bitpay has a great brand, a great brand recognition. In fact, you know, they are the number one crypto blockchain Bitcoin payment processor in the world. They are actually about we are about to celebrate our 10 year anniversary. So they've been around for some time. And they're local. They're here in Georgia, have an office North Atlanta. And it was convenient and it was just a great time to move to bitpay

Darius 3:52 Okay, so let's talk about just the whole concept of you know, cryptocurrencies for retail and e commerce. And I say retail we can maybe go into this in more detail later. I'm talking about like physical retail and I'm interested to see how physical retailers are actually using cryptocurrency so what's the what's the state of commerce in general as far as like taking payments using crypto today?

Merrick 4:31 It's extremely hot. As you can imagine, within the last three months with the price of bitcoin and the price of all crypto coins in general, you know, Dogecoin has finally taken off. So because of the interest in the community, it's becoming more mainstream. So you know, we, we have many ecommerce providers, retailers, as well as traditional retailers. You know, wanting to have discussions on how they can accept print. Go in, and what do we do? And what can we provide to them? So it's no, it's a very great time right now to be to learn about crypto and to get involved in crypto acceptance.

Darius 5:11 Can you share any kind of like data or numbers as far as how the transaction volume is increasing? Which coins?

Merrick 5:22 Yes, so actually, you know, Bitcoin is still King, they account for most of our transactions. But within the last month, we recently added Dogecoin as one of the coins that we will accept. And to within the last six weeks, since adding them they account just about 10%, or a little more of all of our transactions, which is amazing, since we've added them, you know, six, eight weeks ago. So Bitcoin is by far the number one aetherium is up there Bitcoin cash, but Dogecoin is the second most popular coin right now. Acceptance coin for bitpay.

Darius 5:59 Wow. That's pretty interesting. Yeah, I think Well, I mean, what what I think it just like 10x, the price 10x in the last few weeks, something like that. So yes,

Merrick 6:13 yeah. So so once you find you'll find each coin has a community and they're very strong and loyal. And the Dogecoin community is extremely strong and loyal. It doesn't have the value that Bitcoin has. You know, in fact, you know, it started off as a meme as a joke. But to anyone that holds Dogecoin, it isn't a joke. They they actually, like, why it was developed, and believe in it. So they're a very loyal community behind Dogecoin.

Darius 6:43 Well, I think everything's a joke to someone. So I wouldn't take that too seriously. That? Yeah, I mean, it's just like, if you look at all the coins, they all have some areas where some group is going to question them. So

Unknown Speaker 7:01 absolutely,

Darius 7:02 yeah. What's the demographic of the people who are shopping using crypto? You know,

Merrick 7:10 we do know. And it's, it's changing, it's evolving. You know, it is primarily male. Still today, it's primarily male, although more females are getting involved in crypto and our understanding crypto, but it has been primarily male, that the age is generally younger as well. So it's, you know, the 21 year old all the way up to the 45 year old is the is the key age group. But that's, that's changing as well as more and more people feel comfortable with cryptocurrency, that age is a is going up a little bit. And yeah, so those are the two big demographics, you know, male, and then the age of 21 to 45.

Darius 7:53 location, what about where people live?

Merrick 7:57 There, it's all over. You know, there are, of course, we're in the United States, and there is a very large crypto community in the United States, because the United States does actually recognize cryptocurrency not as a form, not as a payment or as, as a true currency but as an asset. So they do recognize it. But you know, we're in Europe, we're all over. There are some countries that are have not jumped on board yet. But we expect that to change as well. So it's really hard to say the United States is definitely leading it, but Europe is not far behind. And then there are many other countries, including the Asia territory is is very well, in depth with Bitcoin as well.

Darius 8:44 Okay, so do you do you work with any retailers in like Southeast Asia?

Merrick 8:50 We do. We don't have a lot. We just don't have an office over there. But we are a global company. So we can work with any retailer in any country that we're allowed to work with. Because we're based in United States, there are certain countries that we cannot operate in or work with. But if you are in a country we can work with. Yeah, we have. We have merchants all over the world and will continue to identify merchants in Southeast Asia as well.

Darius 9:21 Okay, let's talk about if we can a couple of your high profile customers retailers that people might know them their names.

Merrick 9:34 Well, we have a new egg, and ew eg G. I don't know if you've been there before, but they are a top ecommerce provider. And they've done very well with accepting cryptocurrency and they are one of our best partners. We do a lot of work with them in marketing. I don't know if you recently saw some of their social media posts but they were asking their social community if they should accept Dogecoin so they created a lot of awareness around that. But new egg, new egg is definitely one of our premier partners and we're happy to have them. We also have, you know, apmex jM bullion, so we're really heavy into bullion sales, gold, silver, items like that. And they're very good partners of ours as well.

Darius 10:28 So I think Newegg was probably one of the first companies to actually accept cryptocurrencies.

Merrick 10:36 So yeah, they were definitely one of the first e commerce top e commerce companies to accept it. But we have a relationship with many other companies that go back as far or further, you know, some of that private air charter companies actually go back from the beginning. So but Newegg has definitely been with us a very long time.

Darius 10:58 Okay. What do you think about what, how about any of like, major retailers that have brick and mortar? So is there a difference between just online versus in store plus online?

Merrick 11:13 So we do both. But we were definitely built for e commerce. That's where we Excel and exceed. But we do have products for in store only. You know, we do have a checkout app. We also have some integrations with some POS providers. So we can do in store. But cryptocurrency in general, blockchain is ideal for the e commerce and internet world.

Darius 11:48 Okay, well, I mean, as a method of payment, ultimately shouldn't really make a difference, right? For the customer for the for the shopper. Correct, it

Merrick 11:57 shouldn't make a difference. It's just the integration that that that makes the difference in you know, I think the e commerce world has readily adopted it, because it's easier to integrate into promote into market versus those that only have brick and mortar stores. So it's a little bit harder for them to market and to integrate into their systems. So we're still evaluating and willing to work with all POS systems and providers out there, and we are in discussions with some of the largest. But you know, we're waiting for one of the large ones to actually bite and say, Yes, we need to add crypto acceptance to our our software and included on our POS platform. And when that happens, you will see in store brick and mortar crypto acceptance take off as well.

Darius 12:46 Right. Yeah, I think that's, that's one of the challenges with POS software is that most of it is like very old. And not, I guess not as innovative as the online payment providers.

Merrick 13:00 So correct, right. And just in general, it's easier to add, if I have a website, and I'm an e commerce company, it's easier for me to add a payment if there's still some pain that has to be involved, right. But because of the code and the way that blockchain was developed, it's easier to add crypto acceptance to my website than it would be to go into a POS provider and ask that they integrate. So

Darius 13:29 okay. Do you think Amazon is ever going to accept crypto?

Merrick 13:35 Yeah, that's a great story we reached out. And you know, we have asked if they would be interested today, they are not partnering with us. I don't know when they will start accepting it. I don't know what their fear is behind accepting crypto. But I will tell you this, just because they don't technically have an integration with bitpay. We do have users that are shopping at Amazon with their crypto, they just found a different way to do that. So I don't know if you're aware, but we bitpay have, we have our own digital wallet. And in our wallet, you can buy an Amazon gift card while you're shopping. So immediately, you can buy that Amazon gift card and shop at amazon with your crypto although Amazon only sees it as a gift card transaction and they get paid in US dollars versus crypto transaction. We also have our own prepaid MasterCard. So we have many users that are using their prepaid MasterCard at Amazon to shop. So we don't have that direct integration with Amazon. But many ecommerce providers like Amazon, customers are shopping there with their crypto, they just found a different way to do it. Whether it's through a prepaid card like our MasterCard or through gift cards.

Darius 14:50 That's interesting. Yeah, that's the indirect way I guess. And yeah, I mean, I'm sure knowing Amazon they are looking into it and They probably have several projects, experimenting and testing it. So they just haven't announced anything yet.

Merrick 15:07 Right? I'm sure. It's only a matter of time before you see Amazon and Walmart, the large ecommerce providers adopted. And once one does, you know, the wall just found and all of them are gonna jump on board. And we just want to be here when they do.

Darius 15:22 Right. So how does also let's let's talk about a typical implementation and onboarding for a, I guess, a vendor or client. How does that work?

Merrick 15:36 So from a crypto acceptance perspective, we have two different ways that a merchant can accept crypto. One way is that they could, they could be up and running within hours. And that is what we call email invoicing or email billing. So that it's essentially capturing the customer's email entering what information that they want to the most important information would be their email address, and how much they are actually charging the customer. And then an email invoices generated to that customer. So they're in that regard, there's no integration from the company or merchants to start accepting crypto today. And many of our merchants do this while they evaluate the traditional checkout option or online payment option. So you could be up and running within hours with our email billing or email invoicing. The other option is more of the integration into your payment, flow of Checkout, that can require additional development effort all depends on their requirements on how difficult it can be. We've had merchants up and running within days or a couple of weeks. And then we've had other merchants, you know, it would take four or five, six weeks or longer. And it depends on, you know, what platform they're using? Is it proprietary, and information like that. So it can be as quick as they want, or it can be slightly longer than they probably want.

Darius 17:11 So, so to the first one, the email billing, I haven't heard of that one before. So is it like a manual process?

Merrick 17:22 So yeah, in that regards, it is. And we see this a lot with a lot of our merchants that sell high value items. So maybe our luxury auto merchants, we see it with our private jet companies, we see it with large luxury jewelry purchases. We even have an escrow company where you could put money down on a house or buy your house. So in those cases, it's manual in that you go to our merchant dashboard, and you add bit customer's email address, the purchase information most important being how much in US dollar, and then you generate that and that's sent to the customer to complete payment. Everything is done quickly, the payment has to be done within 15 minutes. Regardless if it's email billing or through our traditional product online payment and check out the the window for a crypto payment has to be done in 15 minutes, or everything has to be reset because of the price changes in cryptocurrency.

Darius 18:26 Okay, so that's one of my questions is, is that fluctuation so 15 minutes is, I guess that unless you're actually doing it via the second method, which is just checkout integration, right? That's immediate.

Merrick 18:44 Well, you still have 15 minutes, you know, a customer is at checkout, they hit pay with crypto button or pay with bitpay button. And once that invoice is generated, they still have 15 minutes to complete it. Because cryptocurrency is constantly changing, the price is constantly changing. So that is only good for 15 minutes, if they leave it in their shopping cart and don't continue with Checkout or make that payment, then after 15 minutes, it'll have to refresh and they'll have to start again and that the price in crypto could change based off of what happened in the market.

Darius 19:19 So the the the price that you you use for that transaction is what happened at I guess the time that the person said Add To Cart or select the not add to cart but select the payment and then for the next 15 minutes you keep that price constant.

Merrick 19:39 Correct that in the merchants eyes, it doesn't matter. They're going to get paid. If they ask for 1000 US dollars. They're going to get paid in 1000 US dollars. That that that doesn't change but what does change is what crypto amount the customer is going to have to pay if it goes beyond the 15 but for the 15 minutes weekend. Guaranteed, that's the amount that we will deduct from their account for that purchase. And after 15 minutes, depending on the change in crypto prices, it could go up or it could go down, it could be positive or negative. But it does reset after 15 minutes. But again, in the merchants, eyes, they will always receive in US dollar or or their preferred fee, what they expect to receive so that it doesn't really matter to them, it just matters to the end customer.

Darius 20:29 Okay, so I'm an end customer, I'm looking at a, I don't know, a TV, that's $2,000 right now. And I'm going to use, let's say, Bitcoin, and the price of bitcoin is 50,000. When I do that, when I when I guess start to check out, and you know, I take 15 minutes and the price has gone up to 51,000. What, what happens then, is that, am I just getting a better deal on the TV or nobody loses everything, or

Merrick 21:07 the conversion will definitely adjust. So yes, if you go beyond 15 minutes, and we have to reset the conversion price, then in that case, they're actually using less Bitcoin than when it was at 50, because it went up to 51. But it could also go down to 49. And they'd have to use more Bitcoin. So the conversion will change after 15 minutes. But most as as, as you said earlier, most transactions will occur immediately. But they do have 15 minutes from when they start the payment process to complete the payment process before we have to reset just because of price fluctuations with cryptocurrency.

Darius 21:48 Yeah, it seems like this would really be a time sensitive thing, especially for the first version with the email so that you have to do it really quickly. And the customer has to get the email within 15 minutes. So

Merrick 22:05 it all happens within seconds. So after you hit Submit of that email, it said, the customer will have it within seconds. It's a fast process. That's one of the great things about blockchain payments is it's fast, there's not much they have to do. You know, after they receive that email, you know, they just select their crypto wallet that they they want to pay for them, they select the coin that they want to use. And then they complete payment. There's a QR code that's generated and they complete payment. So the process of buying online or buying through the email invoicing, or completing that payment is is very quick. So you can do it within seconds if you wanted to.

Darius 22:43 What are the fees involved for merchants.

Merrick 22:48 So that's the great one of the great benefits of accepting cryptocurrency is bitpay, our fee is 1%. So it much less than credit card or other fees a CH or wire. So 1% is the fee that we charge merchants and that fee, beans that we're also covering all risk associated with that payment. So any price volatility in crypto, we handle and manage they get paid in US dollar or their preferred fee. So they really never have to hold crypto, manage crypto, buy crypto store crypto to them, they're still getting paid in US dollar which is which is great. So they're getting the benefit of accepting crypto, but not having to do any of the work behind it. And that's why we're here. So 1% is that is the fee that bitpay charges merchants.

Darius 23:40 Okay. So that's Yeah, that's definitely better than the credit card fees. And and it is, as you said, it is it is also the and the timing of it is it's immediate. You don't have to wait up to three days.

Merrick 23:55 So we we will Yes, absolutely. It's it's our settlement happens next business day, depending on the cut off for that day. But we always settle next business day. So you don't have to wait two or three days to receive the payment into your bank account. You know, you get it from bitpay You're the next business day, of course, depending on cut off. But that that's important. That's another benefit that we have. Right? Yeah,

Darius 24:19 that's that's another I mean, Every Day Counts for retailers. So absolutely. Now what about returns How are returns managed with crypto.

Merrick 24:31 So, returns there is no refund capability. There are some times that we have to do something but generally it's whatever the merchant their policy is. Most merchants because of cryptocurrency and the volatility and pricing. You know, they will say if you pay in crypto, we will you want to return something we're going to give you store credit for that purchase. What you don't want to happen is someone that buys something today, and then sees the price of crypto go up in two weeks dramatically say, oh, wow, I, I need to sell this item or return this item so I can get my crypto back is my kryptos worth more now than it was two weeks ago? So most stores and merchants have a policy, a return or refund policy and a lot of them say, you know, they will issue store credit for that. And that seems to be the most popular method for returns and refunds.

Darius 25:31 But the credit is it is the credit in the form of that coin that was used or in the in the field.

Merrick 25:40 It's in Fiat. And in very rare circumstances will it be issued in the coin that was used? Most refunds will be issued as store credit in Fiat.

Darius 25:52 Okay.

Unknown Speaker 25:54 Okay, so the,

Merrick 25:55 the great thing about another great benefit to blockchain payments over any other payment is that there are no chargebacks there is no fraud because of the way that blockchain payments was built. So because of that, you know, there's also it's not an easy way to return or refund money. But that's okay. When most people buy something, they're going to keep it and if there's an issue with the item, then they want the store to make it right. And that's what the store will do. They'll make it right, or they'll issue a store credit for that. So in their minds, that's fine, too. They're doing the right thing.

Darius 26:32 Okay, well, I mean, returns are a major part of e commerce, especially in some product categories, like, you know, apparel, you can have up to 50% returns. And that's like one of the one of the benefits of a lot of people shopping on Amazon or other places is that you can do a return really quickly, you don't even have to talk to anybody. So

Merrick 26:56 Oh, yeah. And that this won't change, we don't, we don't have anything to do with the product or returns, what does change is, you know, instead of, instead of getting something added back to your credit card, the way that you you pay before, it will just be issued as a store credit from that merchant. So if you return something to Amazon, Amazon will just add something to your Amazon account and store credit. And I don't think there's anybody that would not use up their Amazon store credit quickly. And or any other store that they shop that so returns have never been an issue and refunds have never been an issue. It's just been, you know, handled a different way. So it's not added back to your credit card like some people ask for, it's actually given to you as store credit.

Darius 27:36 Okay. So for the retailers that start to use bitpay, what's typically the process? I mean, do they start like, testing the water first and seeing how things are working out and then somehow expanding it? Or? Or do they just jump in? That's

Merrick 27:55 a good question. So yeah, exactly. That's what they what they do, and many do. You can go today to bitpay.com and register for a merchant account yourself. And anybody any retailer, whether you're new egg, or a small mom and pop that wants to offer cryptocurrency has to have a merchant account with bitpay. So that's one thing that they do. And after they they get that merchant account, they can actually start email building that day if they wanted to. So a lot of them actually start by putting some type of messaging on their website or have if someone calls customer care or emails, customers care asking about crypto acceptance and crypto payments, they'll use the email invoicing until they feel like they have a good comfort level with cryptocurrency and they have time to integrate within their checkout system. So yeah, they do they kind of do, you know, walk run type of approach with cryptocurrency acceptance.

Darius 28:59 Okay. And on the customer's experience, so when they go through the checkout, and they and I haven't seen it myself, I have to maybe there's a video or something I can check out or see, or an example I can ask from you later. But I would go in, I would, let's say I mean, that app, right, I mean, somebody's app, and I add, you know, items to my cart, and I go I start Checkout, in the checkout flow. Are there any additional steps? Like Do I have to link my crypto wallet to bitpay to make that transaction or instead of adding, I guess, credit card information?

Merrick 29:46 So I mean, yes, we will have to know what you're bitpay but not not just your bitpay wallet, but what your wallet is. So here's the great thing is yes, we have our own wallet bitpay. And we have more than 3 million customers that use our own wallet. But we work with any or let me say most cryptocurrency wallets out there, including Coinbase. I know you know of Coinbase. So we were the Coinbase, the blockchain wallet. So there are some pretty large wallets out there that we also work with. So the first thing that you do is, you know, you select the pay with bitpay icon or button at the payment page, you know, you'll have the credit card, you might have a CH, you might have PayPal, you might have some others on there, but there's going to be a pay with bitpay. And then you select pay with bitpay. And we're going to ask you, what wallet Would you like to use, including bitpay, or Coinbase, or blockchain are one of the other 80 plus wallets that we support? And then after you select that wallet, then you're going to tell us, okay, what coin Are you going to use to make payment, and then that's it, then a QR code is generated. And then because we don't know what the conversion is going to be until we know what coin you're going to use. And at that point, we know a coin you're going to use, we can do the correct conversion, a QR code is generated, and then you you can check out or complete payment in the often it's, it's by scanning that QR code. It's it's a really easy process. And I'm happy to share some screengrabs with you after this. But you know, again, blockchain payments has made it super easy, simple and fast. So it's a great way to collect money. And again, it's disrupting traditional payment methods. It's fast and easy.

Darius 31:29 Yeah, I think that's definitely one of the one of the questions that I want. So you know, we have a company ourselves that is in the retail shopping experience, space. And payments is one of our key initiatives is trying to figure out what payments to, to offer to our customers, which are merchants, I mean, retailers. So this is a special interest for myself, but just talking to a lot of other people in this in the in the industry. There's there are a lot more questions right now than answers. So and that's one of the reasons I wanted to talk to you because I think we need more answers from people that are doing this work. So what are so you mentioned PayPal, of course, and that's the other? You know, that maybe? I don't know if I can call him the 800 pound gorilla? Or are they like a 500 pound gorilla in the tech, crypto space? Or? What's the competitive landscape like for you for bitpay?

Merrick 32:41 So we are again, we've been around for 10 years. So we are the largest crypto payment processor around. That hasn't changed that I don't think that's going to change. I mean, PayPal entering this market is only good for the market, good for the industry, right? It really they have really helped generate awareness, and it really have made crypto become more mainstream. So I think it's only good, but there are some clear differences around what Pay Pal is doing and what we do. And that's, you know, maybe that's their crawl, walk, run, walk run approach. But you know, there are definitely some clear differences and how they manage it and what we're doing with true blockchain payments.

Darius 33:29 So Kim, so I think PayPal is using Paxos. Right. That's my understanding as well. Yes. Right. And I know I mean, one of my good friends works just went there. Mike do this and probably you probably know him. But the so what is what are some of the key differences between PayPal and bitpay? Right now, for for merchants?

Merrick 33:55 For the merchant perspective. Yes. Yeah. So there's some key differences. One being you know, and things are changing all the time, and it's very fluid. But my understanding as of today is that you know, PayPal really is only dealing with four coins. So they do Bitcoin Bitcoin cash, I believe a theory them as well as Litecoin. So that's for, whereas bitpay I think we're now up to 11 different coins, and we'll be adding more in the future. So that's one clear difference right there. The big difference between what we do and what PayPal does is PayPal is its own wallet, right? They eat a we have our own wallet, but we also work with other crypto wallets. So if I'm interested in accepting crypto through PayPal, I can only I only have access to that ecosystem to how much crypto PayPal has within their ecosystem. I don't have access to what bitpay has or Coinbase has or blockchain have, so That actually limits merchants tremendously. Because, you know, we like to say, you know, the total crypto market size is over $2 trillion. Right now, with, with Bitcoin being over 1 trillion, well, we have access to all of most of those customers. So we're about 1.6 trillion market size where merchants have access to those customers. But if you're working with PayPal, you only have access to what crypto they have sold, and are managing. So there's there's a huge difference there.

Darius 35:36 Yeah, I think that that is a key differentiator. So if you use PayPal, you can only draw money from your wallet on PayPal, basically, right? Your you have to transfer crypto to your PayPal wallet, and then you can use it. Is that how it works?

Merrick 35:54 You actually you actually you actually have to buy it with PayPal. There's no way to transfer crypto in or tech transfer crypto out of PayPal right now. Okay, yes. So that's unfortunate. Again, this might be because they just jumped into crypto acceptance and crypto payments. But right now you have to buy crypto in in your pay pal wallet. And you can't do anything with it. But you can't transfer it and take it with you as well. So it's really not a true blockchain wallet in that because if it was a blockchain wallet, you can move money from one wallet to another wallet seamlessly. So but yeah, you whatever you buy, PayPal stays in PayPal, and you can't take it with you and you can't bring anything else from outside of PayPal into PayPal at this moment.

Darius 36:42 Okay. Okay. So that's, that's a good clarification. Yeah, I think it probably is, like, you know, they're just getting started and testing the waters and seeing how things are, are shaping out for them. Now, you know, of course, Tesla. So let me just do a room reset quickly. I'm speaking with Merrick Theobald as Chief Marketing Officer at a company called bitpay, which is the largest crypto currency acceptance platform. They've worked with over What is that like, 17,000 merchants? Or is that?

Merrick 37:22 Well, yeah, we're in it. We're actually in the 10s of 1000s. Because we have a lot of small merchants, but yeah, we're, we're well over 17,000 merchants,

Darius 37:31 okay. So, we are talking about, you know, crypto using cryptocurrencies, as a as a retailer or merchant. So if anybody has a question, please. So do you have a few more minutes? I know, we were scheduled for a half an hour, but maybe another 1015 minutes? Are you okay,

Merrick 37:50 I can do that. Absolutely. Okay. Great. Thank

Darius 37:52 you. So So yeah, you know, of course, you know, Tesla is the first probably the most visible company with you know, alonza popularity, just accept started accepting payments. Do you know what? So how does a company like Tesla, actually, so they probably, who they working with to accept the payments?

Merrick 38:22 So my understanding is they are not working with anyone, they are actually accepting them themselves? We did have some discussions with them, but they want to hold the Bitcoin, they don't want to sell the Bitcoin. So when you only want to hold the Bitcoin, it's easy for you, for you, yourself to do it. So they want to control the full consumer experience, but they also want to hold the Bitcoin. So that's my understanding is what they're doing today. And they don't need to work with anybody else to do that.

Darius 38:53 Okay. Have you heard any kind of data as far as what's the volume that they have run? When they started? I haven't seen any reports myself.

Merrick 39:04 I personally have not had heard any data. I imagined. They are doing very well. I just know with with some of the, the luxury autos that we sell, I mean, we sell Lamborghinis. And when I say sell, we help with the payment of luxury autos, but we've seen a number of Lamborghinis and do Gandhi's and Aston Martin's. So we're seeing some very expensive cars come through our system. So I can imagine that Tesla is doing very well with the with them accepting Bitcoin. And there's a desire and a need for those that hold Bitcoin to buy cars like Tesla and Ducati and Lamborghini and Aston Martin and all the nice cars that are out there.

Darius 39:49 What's the largest purchase that he has gone through the bitpay.

Merrick 39:56 So and then actually, that's another great point, but a difference between us and someone Our competitors, and you know, one being PayPal, and that, you know, we don't really have a limit as much money or as much crypto you as you have in your wallet is the limit. So we've we've sold some very expensive items before, from, you know, mansion or a nice house to, again, luxury autos to a lot of gold. So it's it can be in the millions of dollars for a single purchase.

Darius 40:32 So on the purchase like that, I guess you said you also have like an escrow. That does does it probably like go through that escrow process? Or?

Merrick 40:45 Well, I mean, when we're dealing with real estate, it will go through the escrow process it has to, but when you're talking about any other any other purchase, or like a product, like a car or a plane or a yacht, it doesn't have to necessarily go through an escrow because you're buying it outright. But sometimes when you're when you're buying a multimillion dollar mansion, you only want to make a down payment or put a little bit down so it will go through that escrow process.

Darius 41:10 Okay. Yeah, I mean, even even if you're purchasing like a Bugatti what is a? What is it Bugatti these days? $2 million.

Merrick 41:20 One of the most famous luxury autos in the world right now. So if you if you if you google luxury autos, or top luxury autos, you're probably going to get at least three different categories in the top 10. So they can cost upwards of $3 million or more for a Bugatti. And we've actually helped with the payment of many of those this year.

Darius 41:42 Okay, well, we've got a lot of newly created crypto millionaires and billionaires probably in the last six months.

Unknown Speaker 41:53 Many, many,

Darius 41:54 so

Unknown Speaker 41:56 you're exactly right.

Darius 41:57 So, one, one other question I have is that, you know, so you probably talked to a lot of retailers and e commerce, you know, players, you know, merchants, what are the top like, really concerns or questions or doubts that they tell you about before starting to use crypto?

Merrick 42:17 Yeah, actually, it's changing. You know, the concerns today are not the concerns of yesterday. But the biggest concern with any e commerce provider is integration in that, you know, they have limited resources. So, once we overcome that, and we go through our integration, and you know, there's not a lot of effort involved on our end, and you know, if they can overcome the integration aspect of it, it really comes down to regulatory and compliance concerns. And, you know, we have a full regulatory and compliance department here. And we follow all the laws and regulations of not just the United States, but any country that we operate in. So we're on top of that, again, the United States has recognized cryptocurrency not as a currency, but as an asset. So it's there. More and more regulations are happening. But we are staying on top of that. So again, we we manage all of the KYC, that needs to be done. We manage all of the regulatory that needs to be done. So again, once they have that conversation with with with our regulatory and compliance team, they feel a little more comfortable after that as well. That's probably the biggest concern. But once we get through that, you know, everything moves fast. And actually, what's happening now is we're seeing more of a top down approach where the C CEO is actually saying we want to accept crypto, go talk to bitpay and figure out how we can make this work. So it used to be where the payment manager, or the head of payments or head of e commerce would approach us. But actually now it's the CEO saying, I want this, I want this to happen now go make it work and see how we can make this happen.

Darius 44:11 Yeah, that's that's, that's good to see that kind of a, I mean, it's just definitely becoming a lot more known as even like two three years ago. So

Merrick 44:23 yeah, it is. But if we did approach the head of e commerce or head of payments, they are not the ultimate decision maker. They might be with other forms of payment. They because of cryptocurrency and the industry that we're in, they will have to go to the board or to the CEO or both and get approval. And that's just the nature of the business we are in right now. So that's why we're seeing a lot of top down because the CEO is saying I have given you approval. I want to move forward with this. Now let's see how we can make this happen. And let's make this happen quickly.

Darius 44:57 What are some I guess? legal processes currently going on, like with the US government that we should like be on the watch for, like if the SEC doing something or looking into something on or the Treasury Department doing some, you know, something that is gonna impact cryptocurrencies that, you know,

Merrick 45:23 not that I'm aware of. I mean, they are watching it, and they are evaluating it. And you know that it's not something that you can not look into. But we're not aware of that, you know, you know, when you look at the federal government, the IRS specifically, they just want to make sure that any gains in crypto are being reported correctly. And I see some changes happening along those lines. You know, a couple years ago, you never saw on your tax return. Do you own crypto, but now you see that question on your tax return. So they're making small steps each year about that. So from from a federal government perspective, I think that's the biggest change is that they see the value in crypto and they see that people are buying and selling and making money off of crypto. So they just want to make sure that those people are reporting the gains that they're doing. And that's, that's with any asset class. So that's the biggest thing I see

Darius 46:26 moving forward. Is there I think I heard that there is a version of the US dollar digital dollar also being worked on is that correct?

Merrick 46:36 I heard that the federal government Yes, is working on their own type of the dollar or coin. So there is something called a stable coin. And I don't know if you've heard that term before. But the you know, we work with four different stable coins right now. And what that means is like Bitcoin can go up in value or drop in value, it's highly volatile. But when you deal with stable coins, they're not going to fluctuate in value that much. In fact, if if I say my stable coin is going to be pegged to the US dollar, what that means is if I sell $10 million in stable coin, I'm going to back that, that up with 10 million US dollars in a bank account somewhere. So it's always going to be right around one US dollar, it could go up a couple pennies, it could go down a couple pennies, but it's not going to fluctuate as much as Bitcoin or other alternative coins that are out there.

Darius 47:36 So do you think having more stable coins is better? Or not?

Merrick 47:43 I do, and I do, because that makes blockchain payments, even more valuable and more mainstream. And the reason I say that is, you know, blockchain payments, never close, they're always operating 24 hours a day, seven days a week, 365 days a year, there are no holidays, there are no banking holidays, there are no weekends, right. So we have many merchants that need to receive guaranteed payment before they release a product or an asset, right. And if it's Friday night, you want to make that purchase in it. And it's a wire transfer and a CH transaction. They're not going to get their funds, most likely until Monday or Tuesday of the following week. So they actually require some of their customers that make these after our holiday weekend purchases to use crypto as a form of payment because that's a guaranteed payment. And it settles quickly. So however they do that they might need to use multiple credit cards to buy the crypto and then use it. But that's what they do. Some of our merchants only accept cryptocurrency on holidays and weekends when an SSH transaction or a wire transfer, is it going to settle for many days after that?

Darius 49:06 So who are the I guess the key are the largest players, current players or traditional payment players that are going to be impacted? Or as we said, disrupted by what's happening in blockchain or cryptocurrency payments. You know, I

Merrick 49:25 don't think anybody's going to be impacted negatively. But what I think you're gonna see is more of the major payment. Players adopt cryptocurrency in some way. So the check hasn't gone away, right? It's evolved and it's used different ways today, but no one has, has totally dropped their checking account. It's just they use it in a different way today. So I think you're gonna see, you know, Pay Pal, make some advancements, make some more advancements, you're gonna see a lot of Mainstream merchants like Amazon, even social sites like Facebook, get involved into cryptocurrency and offer their own coins and payments, you're gonna see Visa, MasterCard, maybe American Express and discover, get involved and adopt and accept cryptocurrency. And I don't know if it will be coins that are already out there, or if they will be developing their own coins. But they see the value in that and they see that the wealth in the market right now in crypto is something that they want to participate in. So they're definitely gonna adopt it.

Darius 50:34 Yeah, I think that's a that's a question for myself is like how our Visa and MasterCard and American Express respond, are they going to respond to this? What's happening? I haven't heard anything, myself. As far as like what they're doing, like anything material. I mean, I'm sure everybody's researching and exploring and analyzing, but anything that actually says that they are going to introduce a new product or new model yet. So I think they should be they should be doing something as you know, quickly, because things are moving pretty fast.

Merrick 51:12 Yeah, I did read something recently, where visa is going to start accepting the USD coin usdc, which is one of the stable coins that we accept. So they are probably the first payment network to start working with crypto. I'm not really sure of how they're going to do it or what they're using the usdc for right now. But but that just shows again, like Pay Pal getting into crypto except this, this just shows that, you know, the other networks are also interested in they're evaluating it. And they're, they're probably at the crawl phase right now. But it wouldn't be a long time before they get up and start walking with it.

Darius 51:54 Right. Right. Awesome. Well, thank you so much, America. It's been a really interesting conversation and learned a lot from you and appreciate your time.

Merrick 52:05 Thank you, derrius. And I appreciate your time as well. And if anybody has any questions, they can definitely reach out to us at it paid calm.

Darius 52:12 Awesome. Thank you and have a great day. You

Interview with Merrick Theobald VP Marketing at Bitpay on accepting Crypto Payments in Ecommerce and Retail

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