Cheapair.com Considers Bitpay as Coinbase Terminates Merchant Processing Solutions
Cheapair.com is asking for customer feedback on using Bitpay to process bitcoin payments as its existing processor, Coinbase, is getting out of that business at the end of the month. Cheapair.com has also revealed additional plans for cryptocurrencies.
Travel booking website Cheapair.com has been accepting bitcoin as a payment option for flights and hotel bookings since 2013. The company currently uses Coinbase to process its bitcoin payments. However, CEO Jeff Klee announced on Friday:
We were recently informed by our processing partner, Coinbase, that they will no longer support ‘custodial’ solutions for merchants, and are removing a number of the tools and features that we rely on to accept bitcoin from Cheapair.com shoppers. These changes are scheduled to occur in a matter of weeks.
He explained that bitcoins received by Cheapair.com are immediately converted to fiat because the company has to immediately transfer them to its travel supplier partners such as airlines and hotels. “Coinbase has been providing that service for us, but at the end of the month they are getting out of that business, leaving us scrambling for an alternative.”
Cheapair.com’s rival, Expedia, also accepts bitcoin payments via Coinbase, with a disclaimer on its Terms and Conditions page. “We do not guarantee and are not responsible for the availability of Coinbase’s services.” While Cheapair.com allows bitcoin payments for flights and hotels, Expedia only offers the payment option for hotel bookings.
Migrating to Coinbase Commerce
Coinbase first announced the launch of its new service for merchants in March. With the launch of Coinbase Commerce, the company is “retiring Coinbase’s Merchant Tools product to focus on making Coinbase Commerce the best possible solution for online retailers,” Coinbase detailed at the time.
The new service “enables merchants to accept multiple cryptocurrencies directly into a user-controlled wallet,” the company described, adding that:
We’ve designed Coinbase Commerce to be a free non-custodial solution for accepting cryptocurrency so merchants can maintain full control over their funds.
Specifically, Coinbase says that on April 30, “Merchants will no longer be able to generate new orders using Coinbase Merchant Tools. Merchant Tool users will still be able to process refunds.” May 31 will be the “Final date for Coinbase Merchant Tool users to migrate to Coinbase Commerce,” the exchange warned, admitting that “We recognize that this decision may be disruptive to Coinbase Merchant Tool customers.”
Cheapair.com’s Future Crypto Plans
Klee proceeded to outline the company’s additional plans for cryptocurrencies. “In the coming weeks, we hope to..Begin accepting additional digital currencies like bitcoin cash, dash, and litecoin. We have already begun testing these,” he wrote.
At the time of this writing, the “Bitcoin and Altcoins” payment option on Cheapair.com includes four cryptocurrencies: bitcoin, bitcoin cash, litecoin and dash. Payments are facilitated by Gocoin.
The CEO also detailed Cheapair.com’s plans to establish “a dedicated customer service phone line and email inbox staffed with advisors who have a deeper understanding of digital currencies and how they work.” Furthermore, some processes will be automated that are currently “semi-manual, so we can issue refunds more quickly.”
According to Klee, Cheapair.com’s “intention at this point is to use Bitpay as a processor,” noting that the company has “had a great experience with them so far and our integration is largely complete.”
However, he pointed out:
But our one giant concern is that Bitpay does not support “non-payment protocol wallets” (wallets that aren’t BIP-70 compliant). So if you do not have a compatible wallet, you would have to get one and use it as an intermediate stage for your Bitcoin payment.
BIP-70, a controversial upgrade for bitcoin wallets written by Gavin Andresen and Mike Hearn in 2013, has had vociferous fans and detractors debating its use publicly since its introduction.
While designed to make bitcoin payments more secure and nearly foolproof, it limits the number of wallets that can be used to only the six that do support the upgrade. Anyone attempting to pay a merchant that uses Bitpay without coins in one of those wallets will have to download and install a BIP-70 compliant wallet first. This means an additional transaction from their wallet to the new wallet, thereby incurring a second transaction fee and delay.
While empathizing with Bitpay’s goal “to address–delayed or incorrect payments–are real and were especially rampant back in December and January when transaction volumes spiked,” Klee said:
I am not keen on the idea of asking our customers to, in many cases, do more work or change wallets just to be able to transact with us.
The CEO is now asking customers for their input. “Do you buy from other Bitpay merchants? Do you find the BIP-70 wallet requirement to be reasonable or too onerous? Candidly, would this make you more or less likely to do business with us?”
Do you think Cheapair.com should go with Bitpay? Let us know in the comments section below.
Images courtesy of Shutterstock, Bitpay, and Cheapair.com.
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