Tuesday, April 2, 2013

BitPay Processes $5 Million in March, Eclipses Silk Road

A week ago, BitPay CEO Tony Gallippi announced that his payment processing service had set a new record: a transaction volume of $2 million in the first twenty five days of March. Now, however, Gallippi has revealed that the popular Bitcoin payment processor has eclipsed that figure yet again, and in a third of the time – leading to a new record high transaction volume of 5.2 million dollars for the month of March.

BitPay’s growth in the past month has been very rapid; in February, Gallippi reports, the company only processed a total of $687,000 from 2,300 completed invoices. In March, the transaction volume of $5.2 million comes from 5,100 completed invoices, and the company also added 1,300 new merchants, raising their total to 4,500 as of the end of the month. Although it cannot be said for certain, the figure also likely places the total aggregate of BitPay merchant sales above those processed by the Silk Road, the notorious online black market for illegal drugs that uses Tor and Bitcoin, combined with a proprietary mixing service, to ensure that both the internet connections and the payments of its users remain anonymous.  
The site was last estimated to have a volume of $2 million by a researcher at Carnegie Mellon University in August 2012, and since then the one public statistic released by Silk Road – the number of users and posts on its forum, has increased by about 50-100%, suggesting a current volume of around $3 million to $5 million. From a public relations standpoint, this is a positive sign for Bitcoin: the legal Bitcoin economy is now almost certainly larger than the illegal one, especially when one takes other merchant services like WalletBit/BIPS and Coinbase into consideration, and is growing at a much faster rate.

Gallippi suggests several reasons that may be the driving factors behind BitPay’s sudden surge in volume. First of all, on March 25 the company lowered transaction fees for merchants receiving their revenue as bank deposits from 2.69% to 0.99%, making the round-trip process of buying Bitcoin (1.00% flat fee at Coinbase), sending it to a merchant and having the merchant convert the bitcoins back into fiat even cheaper than the 2.90% fee charged by Visa and MasterCard. And some merchants are even passing on the savings; “with our recent reduction in fees, our merchants are using our all-inclusive 0.99% fee to offer discounts to their customers for paying in bitcoin,” Gallippi writes. - Read more here: http://bitcoinmagazine.com/bitpay-processes-5-million-in-march-eclipses-silk-road/

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