These phone calls are common because credit card fraud is a serious and growing problem. New technology like the EMV chip better protects consumers against physical credit card fraud and theft. Unfortunately, there are few protections for credit card holders from a more common crime: identity theft. According to Javelin Strategy & Research, identity theft hurt 16.7 million U.S. consumers and caused the total theft of 16.8 billion dollars in 2018.
Online Credit Card Fraud
You are especially vulnerable to identity theft when shopping online. Why? To use a credit card online, you only need the card number, the name on the card, the CCV number, and the expiration date. When shopping online, you share this information over and over again. Nearly half of online shoppers in America store their credit card information with the merchant.
These online retailers are vulnerable to hacks that lead to the massive theft of personal information and credit card data. Why are these hacks so common? Stealing information from an online retailer has little risk for a criminal. They can keep trying and improving their techniques thousands of miles away from a company’s headquarters with only a small chance of punishment.
The Blockchain Advantage
This is why blockchain payments like Bitcoin are so useful. Blockchain payments are secure push transactions. That means you need to digitally send the payment, just like you have to take your cash and hand it to the cashier at a physical store. Traditional card payments are pull transactions. That means your funds are pulled from a third party, like a bank or a credit card company.
For these traditional pull transactions, a hacker or fraudster only needs to know some key information about you to make an online payment. For push transactions, they actually have to possess the funds: whether it’s physical cash or Bitcoin. So how does someone own cryptocurrencies like Bitcoin? Is there a physical coin to keep track of? No.
Instead of a physical coin, you have a public and a private key. Your Bitcoin private key is like a secure password only you know. Your password to Google or Facebook or any other website is stored with that website, but with the right practices, your private key is stored safely only with you.
Why Does This Matter?
When your identity is stolen, you have to spend time contesting charges made with your credit card. Your credit score can take a hit which can affect so many aspects of your life. Even if you get your money back, the implications can still linger for years. A simple step to protect yourself online is to use a password manager like LastPass or BitWarden. Sites like NerdWallet have additional tips to prevent identity theft.
But no matter how much you protect yourself, your information is vulnerable as long as online payments continue to rely on pull transactions instead of push transactions. Blockchain payments make online purchases safer. That’s just one of the reasons BitPay believes in blockchain payments.
Interested in blockchain payments? The BitPay app is the best introduction to Bitcoin and blockchain payments.
“Customer experience is the next battleground where crypto businesses will win or die.”
We’re not sure where that quote is from. I’m convinced it appeared out of the ether and into BitPay's office. Regardless, it’s at the heart of BitPay’s values. It’s why our head of front-end development insists on having it written up in the office.
Now, we've crafted a new and improved blockchain payment experience. Why? To fight and win the user experience battle.
It's all about our users. It's that simple. We wanted to make sure our payment experience solved problems our users were facing. But how exactly did we make a better experience?
Making blockchain payments can be hard for newcomers. How do I pay? Why are there fees? Which wallets work?
The upgrade answers these questions within the application. Now you won’t ever need to go down a rabbit hole of support articles to find out what you need to do. Two or three clicks lead to a short paragraph with the answers and solutions you need.
Have you ever been looking at a website on your phone while out and about? Has that website or app become painfully, unworkably slow? That is why performance matters for a website or or a web application.
So even if you can’t see it, not having to wait until you’re on your desktop with a strong wifi connection to make a blockchain payment is something worth bragging about.
The New Interface
Just look at the changes! Its minimalism is elegant, even beautiful. But enough gawking, let’s look at why these changes matter.
The new interface cuts out clutter and only leaves in the pieces that spark joy: the key features necessary for a great payment experience.
No, not that Ripple! The QR code’s ripple. The QR code is 25 years old and looks unchanged from 1994. Our new design brings delight to something as everyday as an online purchase. And if the ripply effect isn't delightful enough, the confetti will be:
The biggest thing about the new design is something you can’t see...yet! This new interface is scalable. This new design provides a firm foundation for BitPay to add new features and new blockchains.
With an eye towards the future, you could think of this new invoice as the visible, public part of the groundwork the BitPay team is building to easily accept more cryptocurrencies and add more features to our platform.
The original quote was unfortunately erased. This blog post was a good opportunity to make sure it's back up at the office as a reminder of our core value.
In 2018, the price of Bitcoin declined by around 80%. Despite that drastic downturn, BitPay’s volume of business to business or B2B payments grew 250%. Why? B2B payments, fueled by both small businesses and global enterprises, are increasing in volume while decreasing in size. In 2016, Cross-Border B2B made up 135 trillion USD in global payment flows and 200 billion USD in bank payment-related revenue.1 If everything is growing, then what’s the problem? We’re glad you asked.
The Problem with Cross-Border Payments
Analyzing the findings of SWIFT (Society for Worldwide Interbank Financial Telecommunication), the four biggest problems with cross-border payments are: visibility, certainty, cost, and consistency.2 More specifically, 40 to 50% of respondents had problems with:
Inconsistent processes and regulations
Unpredictable total costs
Inconsistency between the amount sent and the amount received
A lack of information about the payments sent and received
Knowing when payments would be credited
Why do these problems still persist in 2019? Because global payments are made across the correspondent banking network: a loose group of over 10,000 sender, intermediary, and receiving banks that follows the SWIFT messaging protocol. As Erin McCune points out in her piece There is No Such Thing as an International Wire and as the following diagram shows, this process is difficult to navigate because of the huge number of parties involved in getting a payment from point A to B.
Traditional Correspondent Banking Network
This vast web of connected banks creates complications which cost companies both time and money. Each point within in this network is a business and charges a fee for their service. And with so many points of failure, communication errors are inevitable.
If your company is large enough, you can employ specialists to manage this complicated relationship between your global customers, your global suppliers, and all of the banks involved in sending a cross-border payment from point A to B. If your business isn’t large enough to eat these expenses, you have to resign yourself to not having access to global payments without high costs.
What About Fintechs?
Non-bank payment providers like Earthport, WorldPay, and Western Union Business Solutions have attempted to bypass the correspondent banking network. They have established local bank accounts capable of accessing local banking networks, and facilitating cross-border payments in popular county corridors.
However, given the regulatory scrutiny, cost and operational overhead of opening and maintaining these bank accounts, the reach of these companies will always be limited. Even with hundreds of bank accounts, no one non-bank payment provider will be truly global.
FinTechs (Financial Technology Companies) like PayPal, TransferWise, and Veem layer better customer experience, increased price transparency, and modern technology on top of a mix of their own local bank accounts and the traditional correspondent banking network. But despite these improvements, FinTechs have to ultimately rely on a network of correspondent banking for global payments.
FinTech Layer on top of Correspondent Banking Network
Non-bank payment providers and FinTechs are able to improve some of the issues that the correspondent banking network creates but are unable to solve its core problems.
Are Blockchain Payments the Solution?
Blockchain payments solve all of the pain points that SWIFT itself recognizes with global B2B payments. The technology provides:
Transparent tracking of payments sent and received
A consistent process that cannot be arbitrarily changed
Upfront and transparent costs of sending payments
Exact amounts sent and received
Payment confirmation in less than an hour
In short, it is already challenging the old way of moving money across borders. However, there are two problems for businesses wanting to use blockchain payments.
First, the price of cryptocurrencies like Bitcoin is volatile. As a result, it is easy for company A to send company B exactly one bitcoin, but the value of that one bitcoin is likely to change. Second, because of its price volatility and how it is regulated and taxed, your financial team may have concerns using it.
BitPay Blockchain Payments as the Solution
This is where BitPay comes in. We remove price volatility and the need to handle cryptocurrency from the equation. This means the businesses that accept blockchain payments through BitPay never need to touch or manage any cryptocurrency unless they want to. We also allow businesses to receive settlement in a variety of traditional currencies and several stablecoins at a guaranteed exchange rate delivered to their bank account within two business days. This is all for a simple 1% fee. No foreign exchange spreads, no subscription fees, no other payment fees of any kind. Just the 1% fee.
Blockchain Payments with BitPay
BitPay B2B payments are also ideal for businesses that:
Need to receive international payments of any size, from less than $100 to over $1,000,000 USD
Want to expand into hard-to-reach regions
Want to sell products and services to the global crypto-economy (exchanges, wallet providers, hosting services, mining equipment manufacturers, gaming businesses, etc.)
Want to pay their traditional supplier base with bitcoin earned as revenue.
Are in the Global South and want an alternative to the high costs of sending payments to Western suppliers
International payments are complicated, messy, and costly for businesses. Blockchain payments solve that and BitPay eliminates the risk of price volatility and any regulatory uncertainty In short, BitPay solves international payment problems for a 1% fee. If you’re a business that wants a global reach, what are you waiting for? Contact our sales team to learn more.
"To process over a $1 Billion for a second year in a row despite Bitcoin's large price drop shows that Bitcoin is being used to solve real pain points around the world."
- Stephen Pair, Co-founder and CEO of BitPay
A lot happened in 2018. For cryptocurrency, you might have heard a lot of bad news. But in the world of blockchain payments, a lot of exciting things happened here at BitPay. Here's a list of some of the highlights:
Our team grew 78%, adding talented individuals to development, product, marketing, sales, support, compliance, and people operations.
"The adoption of support for Payment Protocol wallets has made a big difference for our merchants. Merchants are now able to easily accept Bitcoin payments in a simple easy way without any support issues. This was our biggest request by our enterprise merchants."
Our compliance team makes sure we respect the authority (authoritah!) of governments and regulators
Bitcoin and cryptocurrency have a lot of misconceptions surrounding them. Many people are unsure if they are legal or safe to use. These concerns are even more relevant for businesses that are thinking about accepting Bitcoin and other blockchain payments.
That's why we interviewed BitPay's compliance team about what they do to make sure our services are legal and compliant with relevant regulations.
What are the goals of the compliance team?
Our main goal is to grow BitPay soundly, in terms of compliance, strategically, financially and reputationally.
Compliance is a relatively new profession that has become increasingly defined, empowered, and impactful in the past two decades. Within the compliance team, our main goal is to grow BitPay soundly, in terms of compliance, strategically, financially and reputationally.
In order to do this, we have built a strong risk and compliance framework that tackles the main risks our business is facing. By making use of new technologies such as machine learning and integrating innovative third-party compliance tools, we stay "in-control" and are flexible enough to deal with new emerging risks in a fast-changing environment.
What is KYC and why is it important?
The reason we identify and verify businesses before signing them up is because we want to make sure we keep criminals off our platform.
KYC stands for Know Your Customer and it is one of the most important pillars of our Compliance Program. Prior to signing up up a new business to our platform, we want to make sure that we have identified and verified their business. The reason for this is not because the regulators tell us to do so, but because we want to make sure we keep criminals off our platform.
What is AML and why is it important?
AML stands for Anti-Money Laundering. What is understood under this term in the financial compliance world is generally a set of procedures and controls which companies adopt in order to prevent, detect and report suspicious practices which aim to introduce illegally obtained funds back in the financial system.
Financial institutions, like BitPay, are often referred to as the "gatekeepers" because of their regulatory obligation to have solid AML policies and procedures. However, what many people might not understand is that AML has much larger social and ethical implications than mere financial compliance.
AML compliance is much more than just a regulatory obligation for BitPay. It's also an ethical and moral obligation along with being simply a sustainable business practice.
The amount of money generated by criminal activity is staggering and that money is used to fund even more crimes. For specific details, Alastair Gray's TED talk explains the connection between fake goods and terrorist financing & money laundering:
Therefore, AML compliance is much more than just a regulatory obligation for BitPay. It's also an ethical and moral obligation along with being simply a sustainable business practice.
How has the compliance team changed and grown at BitPay?
BitPay's compliance team has been ever evolving but one thing has always been constant - the dedication each team member has for his or her work. Compliance is not the most fun job for most people, but it is for us. If you speak to any of our team members about what we do and why we do it, you will immediately see the spark and feel the enthusiasm with which we speak about our job.
We are constantly bouncing off ideas of one another and seeking new ways to stay sharp and expand our knowledge in and outside the field. We ask questions (a lot of questions) whenever something does not feel or seem right - that's what helps us grow and develop superhero-like spider senses.
What does the day-to-day work of the compliance team look like?
It's never the same. Each of the team members have different responsibilities and therefore tasks he or she needs to complete to make sure BitPay stays in business for a long time.
While Kayla, Nikola and Adriana are more focused on the daily time-sensitive tasks, Liya and Jeremie work on longer term compliance progress and maintenance of our company. Daily tasks include transaction monitoring, where we find out more about the source of funds for certain transactions about a given threshold or we have controls in place assessing the first transaction done by a merchant.
We also answer to law enforcement requests for further information. Conducting Enhanced Due Diligence on business models bearing higher potential risk is also part of our job. Getting through a lengthy process of obtaining licenses is another important role the compliance team has.
Furthermore, drafting policies, implementing procedures and representing the company on professional conferences is inherently connected with the financial technology (fintech) industry and thus with compliance department too. Maintaining trustworthy relationship with our banking partners and introducing our company to new banks is essential for enabling the company to expand the portfolio of fiat settlement options.
What are the biggest challenges the compliance team faces?
Interpreting and applying the various rules and regulatory requirements that face a company can be challenging, especially when the current legislation did not account for the existence of cryptocurrencies when it was drafted. Therefore, it is important to keep up with the ever-changing legal climate.
Another challenge our department faces is helping traditional banking institutions understanding blockchain technology and proving to them that we have a thorough compliance program with advanced procedures in place. Most of the time, these institutions are surprised by the progressive approach of our department towards traditional compliance concepts adjusted for the technology we work with.
Interpreting and applying the various rules and regulatory requirements that face a company can be challenging, especially when the current legislation did not account for the existence of cryptocurrencies when it was drafted.
Assessing business models and their legality as well as compliance with internal policies based on our risk appetite are some of the most important roles compliance has. If the review of a risky business model is not conducted properly or our policies and procedures are not correctly drafted and implemented, the legal consequences may also end up involving BitPay. That is the reason why the role of compliance department is crucial for the functioning of our company.
What do you think is the biggest misconception about cryptocurrency?
The biggest misconception is that cryptocurrencies, specifically Bitcoin and Bitcoin Cash, are totally anonymous and untraceable from an AML perspective. By using companies such as Chainalysis and Elliptic, many blockchains have comprehensive transaction details to remove the layer of "anonymity" that companies perceive as a threat. Using BitPay to accept blockchain payments should provide our clients a degree of comfort by having a strong AML/ATF compliance program.
The biggest misconception is that cryptocurrencies, specifically Bitcoin and Bitcoin Cash, are totally anonymous and untraceable
Interested in accepting blockchain payments? Visit bitpay.com to learn more. For more regulatory details, visit our licenses page.
In 2018, we added support for four additional cryptocurrency settlement options for BitPay merchants. In addition to Bitcoin (BTC), BitPay merchants can receive settlements in Bitcoin Cash (BCH) and three stablecoins (GUSD, USDC, and PAX).
Now we're happy to share a new improvement: merchants can receive their BitPay settlements in up to five of these cryptocurrencies at once, in addition to their supported local currency.
Here's a glimpse of the new settlements page merchants can see when they log into their BitPay accounts:
One day we believe that Bitcoin and cryptocurrency will be the backbone of payments everywhere. But for now? Many merchants don't accept our favorite form of payment yet.
We know how frustrating it can be to hear "We don't accept Bitcoin here."
That's part of why we created the BitPay Card, one of the fastest ways on the planet to turn Bitcoin into dollars you can spend with Visa® merchants. And now - in time for your holiday shopping - we're making it available for just $1.
Tens of thousands of Bitcoin users across the US have already chosen the BitPay Card as a way to make the purchases they can't use Bitcoin for (yet). The card also makes cash withdrawals easy at Visa®-compatible ATMs*.
So if you live on Bitcoin (or want to) but still need to do your holiday shopping, we've got you covered. And you can tell your friends and family you shopped for them using the first US-wide prepaid card made for Bitcoiners.
On November 26th, BitPay was made aware of malicious code in the Copay wallet (the BitPay wallet was not vulnerable) that was trying to capture the private keys of BitPay and Copay wallets. The malicious code was loaded into the Copay wallet through a modified NPM dependency. The malicious code was deployed on versions 5.0.2 through 5.1.0 of our Copay and BitPay apps.
Once we learned of this, our developers quickly fixed the Copay wallet in version 5.2.0. Because versions 5.0.2 through 5.1.0 of Copay app were vulnerable to the malicious code, we issued an announcement warning our users to not open or run affected apps and to move their funds to wallets on the new secure Copay version.
BitPay’s Security Updates
But if we had left things at a fix and an announcement, then you shouldn’t trust us to build your crypto wallet. Our developers were hard at work in the next week making long-term improvements to the security of the Copay and BitPay wallets. All of these updates are now live as of Copay v.5.3.1
Reducing Dependency Risk
First, we have now locked our dependency tree. This means that, aside from security patches made to our dependencies, we will only be updating our software dependencies when a new major version of Copay or BitPay is released. This makes it easier to review dependencies in our codebase before those changes go live for our users. It is usually over one month between our alpha and production releases.
Locking Down Network Connections
Second, BitPay has restricted network connections on our wallets. The actor who introduced the malicious code via the vulnerability was trying to steal private keys from wallet users and send them to a specific URL. By restricting the URLs that the Copay and BitPay apps can interact with, we make it harder for this kind of attack to work even if an attacker found their way into our codebase.
These are the updates and changes that are currently live for the Copay and BitPay apps. We’re continuing to think of additional ways to make our wallets even more secure, and as those updates come out, we’ll let you know.
If you’re interested in a crypto wallet that takes security seriously, download version 5.3.1 of the BitPay or Copay apps (the Copay wallet is currently only available through APK for Android).
If you’re a developer and interested in helping with Copay, you can check out our GitHub page.
In my 14 years of solving global payments problems at PayPal and Western Union, I’ve grown certain of a few things. First, global business to business trade is absolutely massive ( expected to be at $151 trillion by 20181) and crucial for increasingly connected local economies. Second, global payments remain slow, confusing, and increasingly expensive2. Third, the disruptive payments that FinTech companies are built on top of are still using the existing global payments infrastructure3. While FinTech businesses have improved local and global consumer payments, they have yet to meaningfully impact global B2B trade.
To truly fix the speed, cost, and certainty of global payments, we need new and freely available infrastructure to build those solutions. This new infrastructure needs to allow local small and medium businesses to go global without being eaten alive. It needs to enable SMB’s to send and receive global payments just as easily as global corporations. Finally, it needs to allow corporations to deploy their people and energy to their core business, and away from overly-burdensome treasury and accounts payable / receivables processes.
Bitcoin and its blockchain is the first viable technology in 50 years to fit the bill for a new global payments infrastructure. Anyone can use it, everyone can see it, no one can reverse it, and its borderless by its very nature.
Local and global economies run on fiat (US Dollars, Euro, Japanese Yen, Korean Won, Euro, etc.). They are worried about terrorist financing, sanctions, and money laundering. Someone needs to bridge the gap between the Fiat world and the Crypto world – so Bitcoin’s certainty, speed and transparency can improve the way small and corporate businesses operate today and in the future.
That’s where BitPay comes in. BitPay processes crypto and crypto-to-fiat payments – enabling businesses and merchants to accept Bitcoin while delivering USD, GBP or EUR directly to their bank accounts, next business day, for a simple and transparent fee. Critically, BitPay removes Bitcoin price volatility from the equation. BitPay also works in reverse. Allowing businesses to use their USD, GBP or EUR to deliver Bitcoin to their recipients en masse. BitPay has found success in being this bridge businesses need. Intrepid businesses are organically finding BitPay and driving BitPay’s domestic and cross-border B2B payments growth.
While I first discovered Bitcoin in 2010, it wasn’t until 2016 that I discovered BitPay – at which point they’d already been in business for 5 years! Remarkably, BitPay survived and thrived through multiple Bitcoin ‘crashes’ by solving real-world payments problems, and constantly innovating and staying open to additional Cryptocurrencies and technological solutions.
BitPay processes more than $1B a year, and B2B payments is our fastest growing segment. Because BitPay only charges a simple 1% fee and settles within 2 business days they’re already better than international wires, which can cost 3 – 4% and settle in 3 – 5 days. This makes BitPay Bitcoin payments cheaper and quicker in many parts of the world. Current B2B customers include technology vendors, import/exporters, real estate developers, professional services firms, and Fortune 500 enterprise customers. These businesses are executing payments quicker and cheaper than bank wires by accepting Bitcoin through BitPay today.
I’m thrilled to jump on the BitPay bus and build on BitPay’s early success in B2B and Mass Payments. Regardless of Bitcoin’s recent price volatility, the reality is that B2B Crypto payments are happening today! And we have a lot of disrupting to do in the future.