Braintree’s Bill Ready: Bitcoin Will Impact Mainstream Payments

By November 7, 2014 Bitcoin Politics
Click here to view original web page at www.coindesk.com
Nov 7 - Bill Ready
Nov 7 - Bill Ready

Braintree's chief executive Bill Ready has followed bitcoin for years, but for most of that time, he treated it as an interesting computer science experiment.

Today, however, Ready is convinced that bitcoin has a future in a legacy payments space dominated by mobile wallets and increasingly showing its age.

Ready's bullishness on bitcoin doesn't stop there. He wants Braintree, which owns the buzz-generating mobile wallet Venmo, to help take bitcoin to the mainstream.

"We can start to ... take [bitcoin] to the mainstream because we know what it takes to be compliant with regulatory bodies. From a computer science breakthrough to an alternative form of payment – that hopefully sees much greater adoption than it has already."

Bitcoin in a mobile-first world

Ready spoke exclusively to CoinDesk at the Braintree booth at Web Summit, an annual technology conference held in Dublin that attracted more than 20,000 attendees this year.

The Braintree boss said bitcoin has a place in a world where mobile phones are becoming the "primary computing device". He said:

"Consumers will demand that they have a [mobile] wallet, so wallets will become prevalent because of adoption of mobile. In a world where wallets are dominant, it becomes easier to use a digital currency like bitcoin."

Ready said bitcoin suited digital wallets because they could be inserted "seamlessly" while physical credit cards faced inherent limitations.

"Bitcoin can insert seamlessly in a digital wallet in a way that a plastic card can't," he said.

Braintree was the first major payment platform to announce that it would allow bitcoin transactions, saying in September that it would integrate Coinbase into its system. Weeks later, its corporate parent PayPal followed suit, adding BitPay and GoCoin to the list of payment processors it would work with.

Is Venmo a bitcoin killer?

Ready is sanguine about bitcoin's prospects. He described a creaking "legacy" payments infrastructure that is ripe for disruption. A digital currency like bitcoin is well suited for the task. Although this might ease adoption by merchants, consumers require attractive interfaces for mass adoption to occur.

"It's a two-sided network, with consumers and merchants or buyers and sellers on each side. Any payments product that's going to succeed needs to solve real problems on both sides," he said.

As mobile wallets – like Braintree's own Venmo, which works with bank accounts and conventional payment cards – are already being embraced by consumers for micro-transactions, bitcoin seems to offer few advantages. Venmo reported $700m worth of transactions this quarter, up 50% from the previous period.

Apps like Venmo, and to some extent, platforms like Apple Pay, appear to be potential bitcoin-killers. But it's a notion that Ready is quick to dismiss:

"I wouldn't think about it that way. If you look at Venmo and PayPal, we support a number of payment methods within those wallets, including debit cards and credit cards. If you think about bitcoin ... it's complementary to a wallet. Venmo is not a killer of bitcoin; it's something that could be complementary."

Bitcoin's mass adoption is just beginning

Ready has been involved in the payments space since the first dotcom boom, when he was a software developer at Netzee Payments, which listed on the NASDAQ in 1999. Having watched the payment landscape evolve over the last 15 years, Ready said the prognosis for bitcoin's mass adoption was good.

He said:

"We are in the early stage of that now. As we start to offer bitcoin to our merchants – we have perhaps one of the largest merchant networks in the world – a lot of meaningful merchants are interested in bitcoin. We think we're going to take it to a much wider [number of merchants]. It's the beginnings of mainstream."

Ready warned that while bitcoin appears to have a good chance of breaking into the mainstream, its advance won't be as rapid as some bitcoin boosters would like, saying:

"I don't know that we wake up in two years and half the people are paying in bitcoin. It won't be that rapid. In a few years, a significant number of merchants will accept bitcoin, and therefore a meaningful number of consumers can pay that way. But not the majority [of consumers]. We're at the very beginning."

One of the obstacles to mass adoption of bitcoin are its immutable transactions. Unlike credit cards, bitcoin transactions can't be reversed with a 'chargeback'. This benefits merchants, who don't have to deal with fees and possible fraud linked to chargebacks, but it doesn't offer consumers the same protections that credit card payments can provide.

For Ready, the lack of a reversal process for bitcoin payments is a critical problem. Bitcoin users can only treat the digital currency as another form of cash at the moment, he said, offering none of the utility and protection of a credit card.

"It's one of the open issues that have to be solved. There's a group of people now using bitcoin who think of it as a cash transaction ... for bitcoin to be an alternative to prevalent payment methods, figuring out some form of consumer recourse is going to be important. It's not there yet," he said.

Opening doors for Coinbase

When Coinbase co-founder Brian Armstrong travelled to London two weeks ago to kick off a European tour to promote his company's new services, he described how his relationship with Braintree opened doors to the payment firm's customers, companies like on-demand platform Uber, for example.

Ready revealed that he was introduced to Coinbase by Union Square Ventures partner Fred Wilson "a long while back". Ready said he initially discussed bitcoin with Wilson regularly, and when he was introduced to Coinbase founders Armstrong and Fred Ehrsam, he kept up an "active dialogue" with the duo.

When Braintree began to consider adding bitcoin as a payment option in its developers kit, it found that Coinbase had the customer base and regulatory approvals that it was seeking from a bitcoin payment processor. Ready said:

"As we were looking at wanting to start accepting bitcoin, we wanted to make sure we had a reputable player who was solving for a lot of the compliance issues. Coinbase is out in front of the pack on that. It also had a good consumer experience, certainly with Venmo and PayPal, a good consumer wallet that delivers a good buying experience is really critical. Coinbase was doing that more than anyone else."

Bitcoin the technology, not the currency

Ready said he has followed bitcoin's development for years, although he initially viewed it as a computer science breakthrough rather than an addition to the payments infrastructure. He believed regulatory issues would prevent bitcoin from becoming a meaningful player in payments.

"I wasn't sure it would be something that the mainstream could use, just because of regulatory issues. But in the last year, year and a half, you started to have regulatory bodies rule on bitcoin. Even in cases where the bodies haven't given rulings that are favourable, it legitimises it," he said.

The Braintree chief said he owns bitcoins, although he doesn't put much stock in them as speculative assets, preferring to focus on bitcoin's technological potential instead.

"I'm interested in it as a breakthrough in distributed trust, a breakthrough in alternative forms of currency. I don't spend a lot of time speculating on it," he said.

Ready also said the digital currency world should focus on pushing for more improvements to bitcoin instead of becoming side-tracked by developing altcoins or competing protocols.

"I'm in two minds about these branches off bitcoin. It's great to see experimenting, pushing it further, but another part of it is, unless you're doing something that's a step-function different, you're undermining the adoption of bitcoin ... you do more harm than help in building all these offshoots," he said.

Featured image via Web Summit

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Today, however, Ready is convinced that bitcoin has a future in a legacy payments space dominated by mobile wallets and increasingly showing its age.

Ready’s bullishness on bitcoin doesn’t stop there. He wants Braintree , which owns the buzz-generating mobile wallet Venmo , to help take […]

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