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Bitcoin Checkout app takes on Apple Pay

A Bitcoin app embraces NFC, but will it really challenge Apple Pay?

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Credit: flickr/BTC Keychain

Just two weeks after Apple launched its near-field communications (NFC) system for mobile payments in retail stores, Bitcoin payments processing company BitPay announced Bitcoin Checkout, an NFC-based tool for mobile Bitcoin transactions.

Announcing the system in a company blog post, along with plans to demo Bitcoin Checkout at this week's Money2020 event in Las Vegas, BitPay says its app is already available for merchants using Android devices (more on iOS later). Bitcoin Checkout also features multi-employee checkout and tools for handling tips, particularly useful for those in service industries.

Although in-person Bitcoin payments are already mobile in nature – the customer scans a QR code with their phone and uses an app to confirm the transaction – integrating NFC will help keep BitPay's functionality current with Apple and Google's mobile payment systems, each of which have received plenty of attention recently. Even though Apple Pay was rejected by a large consortium of retailers that are opting for a more retail-friendly mobile payments option called CurrentC, Apple CEO Tim Cook said his company saw more than 1 million activated users within the first 72 hours it was available and claimed it had surpassed competitors in terms of usage after just a week. Meanwhile, Ars Technica reported today that Google Wallet has seen a 50% increase in weekly transactions over the past few months, an encouraging sign after disappointing growth since its launch in 2011.

BitPay executive chairman couldn’t resist taking a shot at the homogenous nature of Apple Pay, declaring "Bitcoin works on a heck of a lot more devices than Apple Pay," according to GigaOm. However, he suggested that BitPay's NFC system isn't likely to compete in the same market as Apple Pay, which counts large retailers like Whole Foods and McDonald's among its supporters.

"The checkout that we had on the phone was designed for a simple street vendor or a one-person shop, whereas this app can handle hundreds of employees," Gallippi said, according to GigaOm. "It's really designed for a more medium-sized business."

This just seems like the nature of these two factions – it's just as hard to imagine McDonald’s launching nationwide Bitcoin support as it is Apple going door-to-door to sign up small businesses and restaurants to accept Apple Pay. And given that NFC is finally gaining momentum among mainstream markets, the merchants that have embraced Bitcoin in its early, volatile days would likely wonder when they would get NFC tools as well.

BitPay could also leverage the ongoing dispute between Apple and the retailers that have embraced CurrentC. Most of the merchants that accept Bitcoin transactions do so primarily because the fees to do so are basically negligible. Merchants only put up with the fees required to process credit card payments because cash has become so rare that they’d alienate customers if they didn’t. Apple Pay is essentially banking on the same phenomenon to occur with Apple Pay – ideally, consumer adoption will grow so much that retailers will have to kick back a portion of their revenues to Apple and the credit card companies or risk losing sales. Small- and medium-sized businesses could gravitate toward Bitcoin if they want to embrace mobile payments without dealing with the fees.

Overall, BitPay appears to be capitalizing on the buzz created by Apple Pay's controversial launch to draw attention to Bitcoin. The iOS app is a dead giveaway; the NFC chip in the iPhone 6 and 6 Plus is restricted to Apple Pay, and the iTunes description of Bitcoin Checkout says the app is "optimized for iPhone 5," which does not have an NFC chip. The Bitcoin Checkout app is only a marginal improvement in functionality for mobile Bitcoin payments, but, if nothing else, it gives the Bitcoin community access to the same tools used elsewhere in the mobile payments world.

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