Bitcoin-based payments firm Strike last night announced deals that will bring crypto payments to NCR point-of-sale terminals, Shopify and prepaid payments provider Blackhawk Network.
The announcement brings bitcoin, originally designed as a peer-to-peer payments tool, back to its roots as a potentially serious alternative in the payments industry.
Speaking at the Bitcoin 2022 cryptocurrency conference in Miami on Thursday (April 7), Strike CEO Jack Mallers announced the deals, which will send payments over the Lightning Network, a far faster and more scalable “Layer 2” blockchain that essentially sits on top of Bitcoin’s blockchain.
Related reading: Lightning Labs Raises $70M to ‘Bitcoinize the Dollar’
“You’re going to be able to walk into a grocery store, to Whole Foods, to a Chipotle, if you want to use a Lightning node over Tor, you do that,” Mallers said. “You want to use the Cash App? You do that.”
See more: Cash App Integrates Bitcoin Lightning Payments
Unveiling a list of major retailers that will be able to accept bitcoin payments that included McDonald’s, Walmart, Starbucks, Best Buy, Home Depot, Staples, Wendy’s and Macys, among others, Mallers said they would be able to use the network to receive payments in cash or, if they choose, bitcoin.
“If Chipotle wants bitcoin, I’ll give them bitcoin, I’ll settle it in bitcoin,” he said. “If Chipotle wants to just replicate the boomer payments networks [credit cards] from 1949, just better, get instant dollars, I’ll give them instant dollars, it doesn’t matter.”
Separately, stock and crypto exchange Robinhood revealed that it is also working to add Lightning Network. “We’re excited to bring even lower costs to our customers by integrating with the Lightning network, CEO Vlad Tenev said in a release. It came as the company announced the beta release of its long-awaited crypto wallet.
Faster and Cheaper
Mallers also highlighted the cost of the transactions on Lightning, calling it “a new, innovative, superior payments rail that is finally embedded and distributed into our lives,” he said. “And so, I used it for the first time.”
He showed a video of himself buying a Coke and peanuts at a Chicago grocery store for $1.46. The fee charged, he said, came to 3,356 satoshis — better known as sats — which are each one 100-millionth of a bitcoin.
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“To the grocery store, it’s no different than using an Apple card or cash card, or a credit card issued by a bank.,” Mallers said. “They’re just getting dollars, they don’t care.”
Lightning bypasses bitcoin’s poor scalability and high fees by moving the actual processing of transactions off the bitcoin blockchain — a so-called Layer 1 blockchain. After doing the complex work on Lightning’s Layer 2, it sends bundles of completed transaction data back to bitcoin to be validated and permanently written onto the blockchain.
Individual Lightning sidechains can process 250 transactions per second (TPS) each, and the network has a theoretical maximum of 40 million TPS. Fees run, as Maller showed, tiny fractions of a penny. The Lightning Network fees are low enough that Cash App offers customers free transactions when using it.
On Tuesday (April 5), Lightning announced that a new upgrade would allow the creating of dollar-pegged stablecoins on its network, permitting low-cost mobile-to-mobile micropayments.
“If I were Visa, I’d be scared, because there are a lot of people out there that have mobile phones, but now don’t need to tap into the traditional system, and then the merchants don’t need to pay the 3% fee plus 30 cents [transaction fee],” Lightning Labs CEO Elizabeth Stark told TechCrunch at the time. “You can have fees that are dramatically lower than the legacy system.”
Three Legacy Partners
Bitcoin was created as a way to bypass the traditional banking system — that’s in the first paragraph of the bitcoin whitepaper — and so a fair amount of the announcement was spent attacking it.
Calling the Lightning Network “a global payments network that lowers costs, enhances speed, drives innovation, improves financial inclusion and brings the power of choice to consumers and merchants,” Mallers said “point of sale systems haven’t had a new, superior payment system in 55 years. “They haven’t had a better way of getting dollars, and merchants have been abused by inflated prices.”
Pointing to Shopify, Maller made much the same point, arguing that the partnership would provide merchants “a cheaper and faster way to accept U.S. dollars using bitcoin technology.”
Referring to credit cards, Maller said “any online merchant that uses Shopify can accept payments without the 1949 boomer network,” he said. “Receive it instantly, cash final, no intermediary, no 3% fee.”
Maller then announced what he called “my haymaker” — the partnership with “the largest point-of-sale provider in the entire planet, NCR.”
Last month the firm, which operates in 160 countries, unveiled the acquisition of FinTech Spoke Technologies as part of a move into open banking, which provides third-party financial service providers access to consumer banking, transaction and other financial data from banks and non-bank financial institutions.
Read here: NCR Buys Intellectual Property to Advance Open Banking
Crypto’s Political Push
The announcement drew the attention of Sen. Cynthia Lummis, R-Wyo., a long-time bitcoin owner who has championed the crypto industry since entering office in 2021.
“If America wants to remain the global financial leader, we need to foster innovation,” she said in a prepared statement Maller showed onstage. “Strike’s financial announcement is a valuable contribution toward bringing America’s financial system into the 21st century.”
Referring to her promise to bring a bill creating a solid and long-needed legislative framework for cryptocurrencies, she added, “I am working to bring smart legislation to the digital asset space so innovations like this can be integrated into America’s financial services industry.”
Related news: Bipartisan Bill to Give CFTC More Power Over Crypto at SEC’s Expense
The bipartisan legislation is being worked on by Sen. Lummis and Sen. Kirsten Gillibrand, D-N.Y.
It comes as the Biden administration launched an executive order instructing all government agencies to work together to come up with a similar framework for crypto, stablecoins and a potential central bank digital currency, the digital dollar.
Also read: Biden’s Executive Order Set to Fast-Track Crypto Policy
