BitPay: Building the Global Payment Network from the Ground-Up

February 4, 2014 By: Stephanie Wargo

Laying the Foundations

Imagine the anxious feeling you had when you came up with an idea. Whether it worked or not, that anxious feeling remains.

Starting a business is that feeling amplified ten times. Every business owner remembers that point, knowing there was no turning back. Driven by passion and a strong belief in their ideas, entrepreneurs forge ahead.

Building a successful startup requires passion, along with the obvious plan for execution, but for many the idea stage is as far as it gets. The most common mistake regarding this, is establishing what the need is within the industry – if there is no need, there is no business.

For Bitcoin companies there has always been a need. Since its introduction in 2009, bitcoin startups have been popping up all over, from coast to coast and country to country.

Although it was hard to predict where Bitcoin would go, many of today’s leading entrepreneurs were supported by a large community of Bitcoin fanatics that believed in the future of the digital currency.

The technology spoke for itself and was capable of a lot of things outside of being a peer-to-peer payment system. This is where global payment networks were born.

Building a payment network from the ground up requires a holistic look at the market that few would ever think of.

When dealing with new technology, not to mention one on the basis of a highly disruptive currency, it comes with many challenges.

Banking Regulations

For payment processors like BitPay, banking regulations are often the biggest challenge to overcome.

Because Bitcoin is not regulated by any central banking institution, banks are often reluctant to provide services. In fact, many Bitcoin companies have been forced to switch banks because of this.

However, many banks have adapted quickly to the changing market and decided to educate their key personnel, before jumping to conclusions.

International Business Laws

Establishing a global payment network means expanding throughout the globe.

These new opportunities deliver a host of international business challenges, revolving around country specific laws, rules and regulations.

Overcoming this requires establishing relationships in every country, which means traveling constantly.

The Bitcoin community is centered on helping grow Bitcoin, and as such, will work closely with Bitcoin businesses looking to expand into their specific area.

The same cannot be said for the banking industry.

Scalability

As with any startup, a looming challenge is scalability and establishing a way your company can grow in a sustainable and cost effective manner – even if you double your revenue in one month.

In Bitcoin businesses, specifically payment processors; you need to be prepared to hire staff to take on an exponential growth in demand, which is hard for most to grasp.

The most successful businesses break boundaries while following the rules. Currently, BitPay is the only payment processor that is completely compliant with all FinCEN regulations.

Having a knowledge of international laws and banking regulations is pivotal for payment processors, because they are across the world in every aspect of Bitcoin.

The challenges Bitcoin has faced since 2009 have helped create the global payment network we see today.

About the Author:

Stephanie Wargo is VP of Marketing for BitPay. She has almost 20 years of experience in financial services and payments, where she led the growth of student loans and prepaid debit products.