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AT&T now accepts Bitcoin. Is this what adoption looks like?

Telecom giant AT&T is one of several new companies to announce it will accept bitcoin and other cryptocurrencies as a payment option. Is this a sign of growing adoption or will these companies experience the same issues that have made cryptocurrencies a problematic payment solution to date?

AT&T has partnered with cryptocurrency payment processor BitPay to become the first major U.S. mobile carrier to provide a cryptocurrency payment option to its customers. On the myAT&T app, bitcoin and bitcoin cash now sit alongside credit and debit card payment options, offering customers an alternative that can help them ‘pay from anywhere in the world quickly and easily.’

Capitalizing on cryptocurrency

“We’re always looking for ways to improve and expand our services,” said Kevin McDorman, vice president, AT&T Communications Finance Business Operations. “We have customers who use cryptocurrency, and we are happy we can offer them a way to pay their bills with the method they prefer.”

BitPay, which acts as an intermediary—enables businesses to accept cryptocurrencies as payment, and then convert this immediately into pounds, dollars, or other local currencies.

One of the biggest headlines to come out of the recent Consensus Blockchain conference was the partnership between the Winklevoss owned crypto exchange Gemini and payments start-up Flexa. The Flexa payments solution lets users spend cryptocurrencies at retailers including GameStop, Nordstrom, Whole Foods, Caribou Coffee, Jamba Juice, and Crate and Barrel. Flexa currently supports bitcoin, ether, bitcoin cash, and the Gemini dollar.

Users pay for their goods using Flexa’s app, Spedn, which generates a QR code that is scanned at the checkout. Cryptocurrency is then debited from the cryptocurrency wallet in the Spedn app. Similar to Bitpay, the merchant receives immediate payment in dollars, and never has to handle cryptocurrencies.

Crypto confusion

In the past, a number of companies have adopted a similar model. They partner with a payment processor like BitPay, announce the acceptance of cryptocurrencies, and attempt to tap into a new customer base as an innovative challenger brand.

However, many of the companies that once accepted bitcoin have been forced to backtrack after experiencing limited demand or difficulties with the service. Travel giant Expedia, which partnered with Coinbase to allow customers to complete their booking with bitcoin, removed the payment option without offering an explanation.

Stripe, which sent waves through the cryptocurrency community in 2015 on news that it would begin processing bitcoin payments, ceased this option three years. The company claimed that bitcoin transactions were as expensive as bank wires and that the backlog was occasionally so extensive that transactors would have to file an additional payment to account for price fluctuations that took place while the purchase was clearing.

Gaming platform Steam experienced the same problems and was forced to cancel bitcoin payments during the bull run of late 2017. Steam blamed scalability problems, volatility, and high fees for making the payment option untenable.

And while others have weathered the storm, it’s not clear that rewards have followed. Microsoft has long allowed crypto enthusiasts to add money to their account with bitcoin, but they have not released figures on actual usage. And Pornhub, which launched a crypto-focused subscription service last year, said that cryptocurrency payments accounted for “less than one percent of purchases made” on the platform.

With no support for Bitcoin’s second layer scaling solution, the Lightning Network, or SegWit (although this is in progress) — will AT&T suffer the same setbacks as those that have gone before?

On social media, commentators are already pointing out the high fees that BitPay commands for processing bitcoin on behalf of AT&T, comparing the service with existing crypto top-up services like Bitrefill, which supports Lightning and offers support for all major mobile phone carriers.

A bridge to the future

While household names like AT&T may or may not succeed in using bitcoin as a competitive payment service, they are undoubtedly contributing to the long term effort to strengthen the legitimacy of the cryptocurrency industry. The emergence of new crypto investment onramps via millennial-focused apps such as Cash App and Robinhood provides further evidence of this trend. Slowly but surely, the industry is building the infrastructure and support needed for stable, cost-effective cryptocurrency transfers suitable for daily transactions.


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