Understanding WooCommerce’s Approach to Crypto Payments

Brad: And we are recording. Hey everybody, welcome to another exciting episode of Do the Woo. We have a fun topic today, which is going to be talking all about Woo Payments and crypto, which I know has got everyone’s ears perked up. It’s a pretty hot topic, has been for the past few years. I’m sure you might have some questions. You might be interested in what this could look like for your store and how you might implement it. So we have some great guests on the show. They’re going to happily answer all those questions as we kind of dig into crypto and what that means in the world of WooCommerce. So I’m joined today by my co-host Kathy Zant. Hey Kathy, how are you doing?

Kathy: Doing really well. Good to see you, Brad.

Brad: Yeah, you too. You ready to learn about some crypto?

Kathy: I sure am. I’m excited about what this might mean for the future of payments and all sorts of things.

Brad: Me too. And I shows like this because I’m here to learn as much as anything. So I think a lot of the questions will come from actually being interested in what we got going on here and how that’s going to impact the future of payments and particularly around WooCommerce. So let’s dive right into it cause we’ve got a lot to talk about. So bring on a couple guests here. First we have Dave Lockie from Automattic. Dave, why don’t you tell everyone who you are, what you do over there at Automattic.

Dave: Thanks, Brad. Thanks Kathy. Yeah, Dave Lockie. I used to run with the agency Pragmatic and I’ve been in the WordPress space for about 15 years now. I’ve been into crypto for about five, six years and the start of this year I was lucky enough to find a role that combined both of those by joining Automattic to figure out what we do with crypto.

Brad: Awesome. Yeah, looking forward to jumping into that. And we also have Keala Gaines. Did I say that right? I apologize if I got the name wrong. I practiced before show and as soon as it comes out of my mouth it’s wrong. So I apologize.

Keala: Anything with the K is good. It’s Keala Gaines.

Brad: Keala. Keala Gaines. Hey Keala, welcome to the show. And why don’t you tell everyone who you are and what you do with WooCommerce?

Keala: Absolutely. I am the GM of Payments for WooCommerce and I’ve been in payments for about 22 years, but at Woo now, just coming up on a year. And the way that you can kind of think about my function is really stewardship, looking after the experience, how we make it better for our customers and how we continue to innovate around their coming needs. And so always trying to keep a pulse on how people are actually accepting payments in their day to day lives and how we can enable that through the platform. And we do that through sort of three ways. From a GM payments perspective, it’s really around where are all the places that Automattic itself is taking payments from its customers and how are we doing that? It’s around our own WooCommerce payments offering, which is now live in 18 countries and is fully integrated into WooCommerce. And it’s around continuing to power our ecosystem and make sure that we have the right relevant choices in our marketplaces for customers.

A history of 22 years in payments

Brad: So you’ve been working with payments for 22 years. I mean that really takes it back to honestly the start of e-commerce really right there in the kind of late nineties, early two thousands when it really started to take off and people realized there’s something to this internet thing, this works. You could buy things online and they show up. It’s great. So you’ve clearly, I mean, 22 years of experience working with payments, you’ve seen a lot and you’ve seen the internet grow and mature. I’m curious what maybe some of the places that you worked prior, if you’re able to speak to it around payments and some of that history that you have that you’re kind of bringing to the table now at WooCommerce.

Keala: It’s a funny thing to look back on because it is… No industry stays still, but certainly the rate of innovation and change is one that I think we would all recognize as continued to be present in ways that we can see and touch and feel in payments. But yeah, when I started it was in 2000 at a little company called Verisign Payment Services. Folks may remember Verisign the good old domain registry as well as SSL certificates. There was a telco business and there was a payments business. That payment business probably wasn’t super known, but the product was. So there was a gateway called Pay Flow and that was actually quite a large gateway at the time, processed $72 billion worth of volume. That business was bought by PayPal in 2005. And so I spent the next five years of Verisign, as you said, when things were still forming that the pay flow gateway was also… They had bought Cyber Cash.

I mean we think it was… Hosted checkout forms, there were some API calls, but things were really quite nascent. Mobile didn’t exist. It was card present is really how the world was dominated and a lot of how card not present, what we call e-commerce came to evolve, really sits on the rails on top of really what is the card present industry. And that I think was more apparent back in 2000 than it is now. It’s been more abstracted. So then 10 years at PayPal, a couple years at Intuit, five years at eBay, and now a year in at Woo. The constant through all of those have had roles across product, across go to market, across channel, partnerships, ops, everything in between has really always been figuring out how to solve problems for customers whether individually or through platforms, but at scale how we increasingly solve problems for customers around payments in an integrated way at scale. I think that’s sort of been the constant theme.

Brad: Yeah, really cool. And just thinking back, and I don’t want to spend too much time on the past, but looking at those kind of big milestones around payments like PayPal, was that one kind of game changer that came on the scene, I think primarily, if I remember at the time was because of eBay, which was really exploding. And people still weren’t super comfortable with credit cards online and are they safe and should I do that? Or maybe they don’t have access to a credit card or whatever. But then PayPal kind of came out and eliminated a lot of those concerns and essentially gave people a really easy way to send money to each other.

And I remember using it a lot on eBay in the early days and it seemed like that that change and how payments are made is what really exploded e-commerce online.

Crypto in the payment space

And what I’m curious is as we go into the crypto discussion, are we about to see that again in the crypto space? And I don’t want to get too far ahead of it, but it’s interesting as we look back and then we look forward, we’re always trying to learn from the past and what’s going to happen in the future and PayPal is that one biggie that really changed the game, just flipped it upside down.

Keala: There was a couple things for PayPal and I think there’s a couple things that are present whenever we see things get to a point of critical mass where you look back and then go, huh, what was the moment that things flipped over? And so PayPal started as a peer to peer system originally for Blackberry if I remember correctly. But there was a problem in need of a solution. So as you mentioned on eBay, you had customers around the globe around the country, no way to really send money to each other. You had a trust issue, you don’t know who that person is, you don’t want to share your financials with them. What you needed was an intermediary. So you needed a way to send money and you needed an intermediary. And yeah, it’s fun to look back at those times. Literally people were mailing checks across the country, right?

Brad: Yeah. I remember mailing checks because that when you’d have to wait a week or two, did you get it? Did you it mail out my auction that I won?

Keala: And then the person would ship it. And so you’d kind of wait for, okay, I got the payment and then you shipped it and all that good stuff. So there needed to be an intermediary and PayPal played that role really well. Fast forward to… As PayPal shifted into merchant services, which I was there for part of that again those years, it was like 2005 to 2015, the shift off of expanding the solution to more use cases that just paste… Then it became paste a button to your website, then it became merchant services, which is full acceptance on your website. And we think about, well that solves a problem. Merchant services were pretty complicated. You had to go to a bank and get a merchant account, half the banks were like internet I no thanks weren’t actually the easiest thing to do. You had to fill out a piece of paper, and online form fax a bunch of stuff in really dating myself here.

But again, there was a problem in need of a solution, which is how do I accept the payments on online in a way that’s easier than this? And PayPal solved that problem. But I think that the next real catalyst was mobile. And so mobile really started to come onto the scene, what, 2000… Probably 2010. But by 2015 it was really exploding and we were all trying to navigate entering lots of data on a little tiny screen that was not fit for form factor. We had questions about how secure your phone is. And so again, you have a problem in need of a solution that I think you find the right thing at the right time and then that’s where you hit critical mass. I’ve seen more change in payments over the last three years with COVID than we probably did before that. Apple Pay tap at the register, those have been out for years.

What we didn’t see was critical mass adoption until you have a problem that needs a solution, which is, huh, I don’t want to touch it. Or now I’m doing buy online and pick up on store and I need a different way to get my credentials to you. It’s a QR code or you’re going to SMS me a link and I’m going to do it from my device. So problems that required we reinvent the way engagement works and therefore the way that payments work around that. I think we tend to think about payments first actually, it’s usually engagement first, customer engagement first. Payments rises to the occasion to try to fill that void or remove friction out of the system.

Brad: I mean the mobile stuff definitely changed the game. And you’re right, the mass adoption, especially through the pandemic, definitely accelerated that. Because now everywhere I go people are doing touchless, Apple Pay, Google Pay, whatever, paying with their watch, which is pretty fun to do. And you didn’t see that a few years ago even though it was available. So it definitely has changed it and it’s made it easier because at the end of the day, you’re right, I don’t want to type in credit card numbers into a form on my mobile device. I want to double click the site and Apple Pay it and away we go and they get their money and I get whatever I ordered. So it’s definitely simplified it and at the end of the day, I guess you’re always trying to just make it as easy as possible for people to pay. That’s the common denominator. How can I make this as simple as possible for someone to order my product or service?

Keala: Actually that abstraction is part of I think the psychology of payments. The more we can abstract actually payments out of the process and make it invisible, the more it becomes around engagement. And there’s a little something I like to say and I think why we see things like BNPL as popular options, which is people like to shop, they don’t like to pay. The more you can make the shopping experience pure and the payment experience separate, actually sometimes the better.

What is WooCommerce payments?

Brad: A lot of truth to that. There’s nothing I hate worse than standing in line to buy something. Let me wait this line so I can give you a bunch of money. It’s frustrating especially during the holidays and there’s longer lines and stuff, so I definitely can understand that. So yeah, I mean kind of moving forward, dive into, let’s first start with Woo payments for anyone. I would imagine most people listen are probably familiar with WooCommerce payments and what that means. But if anyone is listening that maybe isn’t familiar, can you give a quick overview of what is the WooCommerce payments and who is that product really for?

Keala: WooCommerce Payments was launched in mid 2020. It’s now live as it mentioned in 18 countries. It’s fully built by Woo, supported by Woo, integrated and built within the context of WooCommerce. It supports card not present, so e-commerce, what we’re talking about. It supports card present in the US and in Canada we have a reader that works with it. We support all the forms of payment that you would expect. Some of the fun stuff we were just talking about, not just credit cards but Apple Pay, Google Pay, all that fun stuff. Local forms of payment, which are increasingly becoming really, really relevant as I think technology supply chain constraints make borders disappear a little bit more. We’re all getting more comfortable shopping across border.

And so things like multicurrency and forms of payment that would be native to a user in whatever country they’re in. So WooCommerce payments supports local forms of payments, so primarily bank based payments in Europe as well as multicurrency. So we really support recurring payments. Again, it’s around what’s the engagement model that you want to have with your customer, How do we integrate payments to make sure that it can rise to the occasion and it can do that within a unique WooCommerce context.

Brad: Yeah, it’s common all in one. I mean prior to WooCommerce payments you’d have to set up a number of different extensions, potentially a number of different payment options, certainly to get all of the different options that are available with this would require multiple extensions and plugins and accounts installed and configured and working, if you can even check all these boxes. I’m not sure if you can with a bunch of extensions, you can check some of them, but I don’t know about all of them. So it’s kind of an all in one, get you going as quickly as possible with the store, start accepting payments however you’d like. Take it from there.

Keala: That’s right. Yeah, a hundred percent. But you don’t lose any of the flexibility. You can still adapt and extend over time. So if you want to add PayPal as a form of payment to it. If you want to add at the NPL to it, you can do that. But it’s everything that you need certainly to get started, and I would say, and much more than that, obviously to grow with you in your core business.

Brad: I saw a demo of the in person payment reader at WordCampsUS, which was really neat. And that was how we got the swag. They had a fake credit card, but you would place an order at the kiosks, swipe your fake credit card, it would pay, order accepted and then you get your swag. But I was like, this is neat because especially for local small business, we see a lot of the stripe readers and the square readers. I’m excited for the day that I walk into a store and see a WooCommerce reader, then I’m going to ask them all about their website and what they’re doing with it. But it’s neat to see that out there too because we talk about online and obviously we’re focused online, but also having the capability of being online but also being a local small business or a local store that can still accept physical credit card and swipe it or touchless and the way you go is really powerful.

Keala: And those lights are converging. As I said, but it really is around of rising to meet you, your customers, across whatever lines you have for engagement.

WooCommerce payments and crypto

Brad: Yeah, that’s awesome. So let’s get to where why we’re all here. We want to get Kathy and Dave more involved here, but let’s start digging into crypto. So that’s the big crypto. I feel like it’s a little bit of a love or hate situation right now with crypto. It’s definitely a bit of a trigger for many people, but at the end of the day it is a reality. Crypto’s out there. Many people are involved in crypto and assuming probably all of us in some capacity. So why don’t you tell us what’s coming to Woo Payments, WooCommerce payments in the crypto arena and let’s kind of dig into that.

Keala: So I guess maybe love it or hate it or be expert in it or nascent in it, it’s no longer probably ignorable. Crypto is here and it is relevant for enough customers, certainly merchants and consumers that as I said, we want to make sure that we’re always giving customers the right set of choices and flexibility within our ecosystem. And so we obviously didn’t have anything for crypto in our marketplace. We wanted to make sure that, again, as these solutions are becoming more and more popular, that we took stock at what are the most relevant and popular use cases, Who do we think the most dominant and most popular providers are and why? And are they the right providers for us? And really look to establish what we think are some of the best providers for WooCommerce within the most relevant and popular use cases. And to put those in our marketplace.

We want to support our customers. This won’t be for everyone, but certainly for consumers that are looking to pay that way and are asking the shops that they shop from for those options. And for merchants that are keen to maybe, I talked about payments of rising to the occasion to solve problems. Where is there a problem that exists? And I think crypto is one of those places as well that… It can be consumer driven because either consumers have funds in storage that way. Maybe they’re big advocates of crypto, for whatever reason they want to pay that way. Merchants are always going to want to accept however consumers want to pay. There’s also some real use cases that Crypto might be able to help us solve that payments traditionally has not been able to solve well

Brad: Yeah, I’m curious, Kathy, have you ever purchased anything with crypto online?

Kathy: I have, yeah. I’ve been involved in the space. When crypto first started and I was kind of watching it back in the early Bitcoin Silk Road days, it was kind of like this enigma of what is going on over here and what’s, who is this Ross guy and why’d they arrest him and is this all just for criminals? And there was all this intrigue and I kind of come from the security space. So all of that was very fast. I mean I literally have malware on my computer that I analyze. So on purpose. That’s interesting to me. What are people doing with technology that is outside of the realm of acceptable use cases and Silk Road was kind of that. But as it evolved and then when Ethereum came out it was like, oh this is more than just payments. This is now taking this into all smart contracts. And I could see the writing on the wall that eventually this is coming mainstream.

You remember back in the day when the internet… All of the cool things that were happening with technology were kind of in the adult industry and it was kind of like this weird use case of doing movies online that nobody ever looked at. But they were doing innovative things because they had to, even in payments that was happening a lot in these industries that weren’t widely accepted in the mainstream, but it came to the mainstream. And I think the same kind of trajectory is happening with crypto where things kind of started in the dark corners of the internet. But now we’re starting to see these use cases where, hey wow, maybe I do want to use crypto or maybe there is an opportunity to transact with people in ways that are just me and them and not having a big bank involved or there’s a lot of people who are complaining about the way PayPal has done things.

What lured Dave into the crypto space

And so there’s complaints about these third party large institutions that are involved with our finances. The 2008 financial breakdown that happened that may or may not have caused Bitcoin to actually exist. A lot of these larger scale problems that crypto tried to change and now seeing it come become mainstream is super interesting. And I think we’re just at the cusp of people starting to… I’m obviously the weirdo transacting already using crypto, but I think more and more people are going to start seeing some benefits here. And Dave, I’ve seen some of your talks and at WordCamps online about this and I can tell you’ve been watching this space for a pretty long time too and seeing… What are some of the things that brought you to the space that made crypto interesting to you and your vision for what payments are?

Dave: Super kind to spend your time watching my talks, Kathy, thank you. I was pretty slow to get Bitcoin. People forget how established it is. It’s not actually that much younger than WordPress itself. I think it’s like five years younger than the WordPress project. And so for several reasons, I’m kicking myself to be sort of slow to get it. I guess the moment that the penny dropped was when I realized that this was internet native money and we’d seen a lot of activity around FinTech and we were well into the Web2 to boom times Facebook and Twitter and just this incredible exponential growth and network effects. And it was really just a principle’s realization that when you combine those two things like financial innovation at internet speed and scale with the social effects, it was going to be dynamite. I guess a lot of innovation does happen at the edges and some of those edges are the more questionable places online as you mentioned, Kathy.

But they do typically get dragged into the center and that’s when you can… I guess you can watch them and some of them are just ephemeral and they disappear and they never kind of come into the mainstream. But one thing that I’d like to emphasize is that this is an… WooCommerce, this is not Automattic going like crypto crazy. This is us doing what we do, which is monitoring what’s happening in our ecosystem. It’s looking at the open source ecosystem, the WooCommerce plugin marketplace, looking at signals through our own platform. What are people searching for? What are people talking about in support and figuring out, okay, there seems to be a threshold of demand here that it behooves us to find a solution for it. This is trending upwards, we should do something about it. So I want to make that clear that this is sort of business as usual from Woo’s perspective, although it does carry this whole sort of mind worm that I’m sure we’ll get into with some of the conversation.

Actually, it’s quite a pragmatic thing for us to do and quite adding a shipping provider in a new geo. If there’s sufficient demand, it helps our merchants. That’s something that we should do because that’s the nature of our business. I think beyond that… The reason I personally became more and more deeply invested in crypto and in wanting to find a marriage between those two passions. The work and what was happening with crypto is that we are living in a very interesting time. And so on one side we see this convergence that we talked about of ID and authorization, authentication and payment. They’re all sort of collapsing down so that if you looked into your Google account then it’s a click to pay with Google Pay. That convergence, that collapsing down of things means that we need to trust evermore the entity which is providing that service to us.

And at the same time, there are lots of signals that trust is problematic in various ways. I think it’s fair to say that most of the governments of the world have done a pretty poor job at digital implementations. You know can look at Estonia, you can look at a few great use cases where actually… This sort of what I call critical infrastructure is now part of our political systems. Democracy is the best… It’s the least worst way that we know how to do this stuff. But in a lot of the rest of the world, that’s not the case. And we end up trusting huge organizations, commercial organizations whose incentives might not be and interest might not be exactly aligned with ours. And so we see lots of concern about what these social networks do with our data, how well they know us, to what extent are we being advertised and what extent are we influenced.

So there’s a lot of that stuff which I just feel is of part of the zeitgeist. And I think crypto offers a really interesting opportunity and set of characteristics that mean that it adds a new access. It adds to the space in which we can plan for solutions. We don’t just have to trust government. We don’t just have to trust banks, we don’t have to trust big take. There is also this other way. And I think having that space in which to experiment is always really healthy. I think we can also look at the history of the internet to some degree and say we can ask questions. And this was part of a debate I watched recently. What would’ve happened if the US Postal Service had regulated email like they wanted to. To send or receive emails, you had to go through a KYC process. As people, as society, would we be better or worse off now?

And I think most people would say that actually keeping email as an open protocol has added a tremendous amount of value to our ecosystem and it’s provided a very rich foundation for innovation. And I think if you buy that argument, it becomes quite difficult to argue that there shouldn’t be a similar open protocol for payments, information and payments not actually being drastically different. So those are two things that I came to realize is past and present. And then the one which gave me conviction that there’s a job for me doing this in a year’s time is this inbound convergence of tech trims. So I’ll just pick the three which I think is most interesting to me. And that is augmented reality or metaverse or 3D, the immersive… We’re not just staring at our own screen version of the web.

I think it’s AI and I think it’s crypto and I think all of those things lead us to a world in which digitally native commerce for products and/or services just becomes a more impart important part of our economy. And having a payments industry which was born from cards present as Keala said, that’s difficult to map onto a global real time, digitally native commerce paradigm. And so I think there are some really interesting things that are going to come down the line as well as some interesting things that in the world right now that we’re speaking to for merchants. So I’m excited to see what we can do for our merchants here, what opportunities we can create right now and in the near term future, but also what challenges we can help them overcome.

Brad: Yeah, that’s awesome. I mean, you know made a lot of good points, although I got to go back to the email. I wonder if the post office did regulate it, if I would have a lot less emails in my inbox every morning, probably. You’d have to buy digital stamps or something. I don’t know what they were thinking, but you’re right, that’s an interesting comparison.

Thanks to our Pod Friends Dotstore and Nexcess

Understanding crypto and knowing if it’s right for you as a payment option

Brad: So I’m excited about crypto. I think most people are familiar with it at this point, at least at a very high level. Generally it’s what it is and it’s some form of a payment. They may not totally understand blockchain and all that great stuff, but most people have heard of it or at least heard of Bitcoin and have some familiarity with what that means. I guess the question I would have is as people are… They have a store or maybe they’re getting ready to launch a store and making decisions about payments and what they want to accept or not accept, I think crypto is the interesting one.

You always want to try to make it. We talked about making it as easy as possible to pay, make it as easy possible to get that money. So you can provide the product or service. And this is kind of for both of you, but would you recommend a store owner that has no crypto experience except crypto or do you feel like there needs to be some level of understanding maybe on a little bit deeper level of what actually accepting crypto means, how that converts into US dollars or whatever your local currency is and how you actually get that money in your bank account for someone that maybe has no experience with it. Is that something where you would recommend or do you think they need a little bit more experience in the crypto world or is it kind of a TBD.

Keala: I’ll take a payments cut at that and maybe Dave you chime in on your point of view on it. But I think what I would tell and probably what any merchant looks at is how much demand is there for a payment option. Because implementing payment options always has an expense. We make it easy, you can plug it in. It’s pre-integrated. All that good stuff, but there is some additional operational work that comes with it. You’re having money sit somewhere else, whether you convert it to fiat or not and reconcile that when coming into your bank. So you probably don’t want to do it for one transaction a month. Maybe, if it’s a really big transaction.

So what’s the demand? And it so demand is a good indicator of how viable it is for the use cases that you’re solving. And so where there’s customer demand then it’s probably the right solution to look at. And then the question is what do you need to be educated on and what are the choices, what are the factors in your consideration set that you should probably be aware of to make the right decision, I think is how I’d take a payments lens on that. And then maybe… Dave, I don’t know if you have thoughts and certainly Kathy… Then what the consideration set might be around getting educated and what you should know coming into it.

Dave: Yeah, no I think that’s a great point and I’m going to sort of pick up there and then go back over some other bits as well. So making it easy for people to transact is a core principle that we should always aim for with payments. If people want to transact, then let’s take as much pain out of that as possible. Obviously there has to be a degree of friction so that people know that they’re entering into the contract, their money’s going to be leaving their wallets. We don’t want that to be a surprise. Sometimes it inevitably is. But ease is very subjective. So if you are transacting as a US consumer in the US then you probably have a bunch of super convenient ways to pay already. You’ve got Venmo, you’ve got credit cards, you’ve got Stripe, you’ve got Diners Club, the world is your oyster. But as the world becomes more globally interconnected, then that’s not always true.

The payment networks that the merchant accepts might not be able to operate in a particular jurisdiction or they might be too high a currency exchange fee, like a 4x speed to make that transaction actually work for both parties. And so ease is subjective… That sort of term, how do we make things easy or easier? It’s very subjective to every transaction. And so there are going to be use cases that are stronger for crypto now and there are going to be use cases, like just using Venmo cash up or whatever now as well. I think that extends right through almost every detail of a transaction including different verticals. We see a lot more volume going through crypto payments for things like that are digit… Like they’re online only. So hosting services, VPNs, gift cards, things that don’t have to touch the real world. And I think that’s something that we see throughout the crypto ecosystem is whilst you stay in its realm, the digital realm, it’s really difficult to beat but as soon as you have to bridge out to the real world, then it gets messy.

You lose a lot of the power and the sense of doing it. So again, as we see more and more pure play digital goods and services, like maybe computer games compared to movies now. It’s such a vast industry, there are going to be merchants for whom accepting crypto right now is just a no brainer. There are going to be others where they’re just like they’re not going to see any transactions maybe ever. In terms of you’re merchant, you think that there’s an opportunity that you want to go after where we are at with the maturity of crypto payment processing solutions… And one of the reasons that this seems like the right time to start introducing it to the marketplace is actually there’s a really broad range of options out there. So this is a term that I’ve made up and I expect no one to use but I kind of call it crypto light.

So this is the idea that you can accept crypto on your merchant and a consumer can pay you with crypto as a merchant you just end up with fiat currency settled to your bank and often faster than through a traditional payment processor and almost certainly with lower transaction fees as well. So even if you as a merchant don’t get Bitcoin, never want to hold Ethereum, have no idea what a wallet is, they can still be tangible advantages to accepting crypto from your customers right now. And at the other end of the spectrum, you can let people walk into your site with a Web3 wallet and pay you for an NFT with Ethereum that gets sent back to their wallet and have this total, crazy composable Web3 commerce paradigm going on. What I would say is if you’re thinking about accepting crypto as a merchant, even if you want nothing to do with it, then it’s really a good idea to at least understand the principles and the concepts and where things are the same or where they’re different from traditional payments for a couple of reasons.

One is just this is a contract you’re going to be entering into. So there are going to be different risks, there are going to be different constraints as well as features and benefits. And the second one is just if you’re going to optimize your customer’s experience, then understanding what they have to go through to transact with you is just an important part of running an effective business of any type. Advertising that you accept crypto, letting people know how that looks, what wallets they might need because crypto payments can be like you can log in with their web browser wallet, you can see a QR code. There are lots of different actual kind of at the point transaction experiences. So even if you want nothing to do with it, there’s some stuff that’s really just good to understand. And if you do want to deal with on chain transactions directly, then welcome to the rabbit hole, chum. It goes pretty deep.

Challenges around accessibility of accepting payments

Brad: Yeah, just talking about, one thing to think about too is they’re kind of wrapping up a little bit is just around the accessibility of accepting payments. I think it’s many of us and myself included, take it for granted. Like you said, the world’s our oyster in terms of how we want to pay. There’s 50 different options that would work for me, but in many different countries, other countries, it’s hard to even have a payment processor that’s available. And I was reminded as we were talking, I just pulled up, Bob and I had a show, this was back in January of 2021 and we had Mary Job on. She’s a brilliant woman and she’s helping people get online in Nigeria and set up commerce stores. And I was looking at the transcript because I remember the biggest challenge, which I wasn’t even aware of is there was no real payment gateways that were available without working directly with the bank, which as you said is a long process and it’s usually kind of expensive and it’s not just a fill out a form and a way you go to accept payments.

So that was a big problem getting a lot of stores online, they make amazing things in Africa and they want to be online to be able to sell and ship these items all over the world. But just getting set up to take a simple credit card is a real struggle. And that’s where I think another piece of this crypto that maybe many of us don’t think about is that power of being able to accept payments on day one without having to worry about is there a bank process or is there a merchant account, is there some system I can use that works with the country that I’m in? Because I think there are a lot of countries where they just won’t work. So this could really open up other markets, it could open up new customers to your stores, new stores online in those type of countries to accept payments and just a different form, which is crypto. So it could be a game changer in some of these areas that just don’t have a lot of options.

Keala: But I think it’s always options relative to alternatives. And so I said there’s a lot of places that traditional payments don’t work well still. And so where there’s tons of alternatives and traditional payments work really well, then maybe there’s going to be less traction but where there’s not ease, Dave, you talked about ease relative to the alternatives that you have. If you have no alternatives, you’re probably willing to jump through quite a few hoops and deal with quite a bit of friction. So I think some areas that traditionally have not been solved well by, and we’ll use credit cards because that’s the dominant way that most of the way that we pay online is based. Even things like Apple Pay and Google Pay have their basis in cards. It’s just a container for a credit card, if you will. So things that are account based, like a PayPal account, those start to look a little bit different.

Micropayments not well solved and there’s a reason for that because every single transaction on a credit card has that fixed per transaction amount. Well if you’re doing a transaction for a dollar, a couple dollars, that fixed percentage of the cost becomes a really high proportion of your effective rate. So micropayments don’t work well. At the same notion, a really high ASP doesn’t work well. Things over $10,000 tend to have higher decline rates. People don’t have that much on their credit card. Even if they do, sometimes they decline. Really high dollar transactions tend to also be sometimes linked with things that have contract, warranty, titling, escrow, protections, deeds, things where you’re going to want to have a smart contract, an identity coupled together with a high dollar transaction.

There’s a reason high dollar transactions have friction, right? Because there’s usually something else going on with it that I need to make sure you are who you are. The payment’s good. Crypto happens to be irrevocable and there’s it. There’s an exchange of value happening. And so having that happen on a blockchain with a smart contract, with transparency, those could be use cases that are solved really well. So we talked about micropayments, sort of macro high dollar transactions and then across border. And across border in particular has been solved in countries that have common banking systems. But you mentioned Africa and some of the countries that aren’t of part of these banded together and create systems that work well together, then the seems show quickly.

How can Woo help people feel more trust in a crypto based transaction

Kathy: Keala, you talked about a lot of things that kind of peaked my interest, having watched the space for such a long time and knowing that crypto is immutable, knowing that when I send Dave some Bitcoin, Dave’s got the Bitcoin, you know what I mean? It’s like the transaction is finalized. And I think a lot of the maybe trepidation that maybe some common consumers might have with using crypto can be around that finalization. The fact that it’s on the blockchain and that you can see the transaction and it’s all there. That’s all great and fine, but what if I don’t get what I just bought and Dave’s got my money? All of those types of things. And you talked about a lot of these other things with smart contracts and different ways that crypto can add to that trust factor of a transaction. And I was wondering what is Woo’s take on all of that? How can Woo help people feel more trust in a crypto based transaction?

Keala: It’s a great question and it’s a place that I’m looking to see the space evolve. I tend to take that payments view, which is again, where do payments not work well and then where will something sort of rise to fill the gap? And I think there’s a lot of opportunity there. Today in those… It will take a high dollar transaction where you’re writing a check or sending a bank wire might be more appropriate to online. Wires are irrevocable, right? And so both the buyer and seller or the buyer and the merchant sort of enter into that type of transaction with a different type of mental model and awareness already. There likely is already a trust in the exchange of goods that you’re going to get or the contract governs that there’s trust in that exchange. I think that crypto just becomes another instantiation of possibly a better way to do that.

I’ve sent wires and they’re not easy and they’re expensive and God forbid you send a wire internationally and you hit the button and you go like, Oh boy, I hope I did that right. And it’s not super traceable. So I don’t think that crypto may be for every transaction, maybe one day. Dave made a point around physical goods versus digital goods. Again that revocability. How much do you trust the transaction? But where do payments not work well today and where are traditional payments being used, but there’s a lot of friction in the system. That maybe crypto helps fill that gap in a way that removes friction and helps solve a problem that isn’t being well served today. I think those are the things that really excite me most.

Dave: Yeah, I would back that up with saying what’s happening with WooCommerce and crypto payments at this stage is that we are offering the partner solutions through the marketplace. Many of those solutions come with a bunch of merchant tooling including managing refunds, et cetera. Just because you can’t do a chargeback through a crypto payment network doesn’t obviate their legal need for you as a merchant. There are laws… Crypto’s not this wild west, it’s subject to a lot of regulation already. So as a merchant with a fair compliance reasons or customer service reasons or online review reasons, you still have an obligation to treat your customers properly, to give them a refund if you fail to deliver the good and services. And again, primarily for me, it primarily comes back to where you leave the crypto ecosystem and have to bridge back to the real world.

So finalizing a Bitcoin transaction, but then having to wait a week to receive the goods, that’s a fraught time because you’ve sent an irreversible transaction. Keala makes a good point that that’s not totally unique to crypto, but I think that’s why we saw such a boom in NFTs over the last year is not because and I do think that that’s super interesting and that we’ve seen a very rapid hype cycle and some interesting things will come out. I think as much silly, it’s because they’re just encapsulated within that ecosystem. You don’t need to leave crypto land to transact, to get the goods of the services. It’s the same with DeFi, right? You are transacting within net ecosystem and so there is none of the mess that is bridging out. That’s why Stablecoins are so big because they allow you to switch to fiat currency.

They let you exchange to fiat pegged value without having to go back out into real world, into a bank account and back. And so I think anywhere that people find innovation for product services, ideas that allow things to happen within crypto world, you’ll see a lot of use. And as the ecosystem matures and people close those gaps between how traditional payments work and those responsibilities, how crypto payments work, then I think we’ll start to see it becoming more seamless. And Keala made some great points about how this is all just part of the trend in payments. Payments is becoming more seamless. You kind of abstract the payments side a bit out as much as possible… If you’re scaling a QR code to check out on the store and you’re paying with dollars on Lightning Network or Ethereum in a few years, I don’t think most people even going to notice or care half the time.

Brad: It is all changing, isn’t it? Maybe this is the next biggie. As you mentioned, PayPal was a big one. Mobile was a big one. Is crypto the next one? It definitely looks likely, but I guess the market will tell, huh?

Dave: Honestly, I think we are waiting for… So with PayPal, the driver was eBay. The fact that there was sort this social marketplace and it was Web2 and people could read and write to the web. I think there are a lot of use cases for now, that’s why we’re doing this now. But I think where the world really changes is where we just have a fundamentally different Web that has different value propositions, constraints, requirements between creators and consumers. And I think even the paradigm version, here’s merchant, here’s a consumer ends up getting broken down as we see single individuals like, what’s her name? Kardashian or Ye becoming these psych powerhouse brands that do TPV comparable to building hundreds of people.

As we see that traditional boundaries break down, I think we just find ourselves in a world where those digital goods, those digital services which play to crypto strengths just become a more important part of the digital economy. So yeah, that’s where I think that eBay, PayPal dynamic comes in, is this emerging new use case that’s happening already. We can see that it’s happening, but as soon as we start see it being mainstream, I think it really starts challenging the status of payments. That would be my take.

Brad: So when can we start accepting crypto on our online stores? Is it available now? Is it coming soon?

Dave: By the time the podcast is out, Brad, I’m pretty hopeful you’ll be able to find one of our incredible partners on the marketplace, on board with them and start accepting crypto for their site, how soon you are up to at the moment, buddy.

Keala: Brad, if you want to test it out, you can send me a payment

Brad: And I will not be able to reverse that payment unfortunately. Yeah, it’s exciting. I’m anxious as kind of see, especially as people start using it, kind of get more real world examples of store using it and how it’s going. And like you said, is there demand or not? And I think certain markets there certainly will be demand and others maybe not or it’s just going to take some time to catch up, but it’s exciting to see that it’s coming out. Again, having hit through official WooCommerce channels, you’re probably going to get quite a bit of adoption pretty quickly I would imagine. So, yeah, I guess any other questions or topics before we wrap it up here? We covered quite a bit. This has been a really fun show, really informative. I think we’re good. So we’re, why don’t we just go around the horn in there and tell people where they can find you online and if they have any questions or more information where they can look. We’ll start with you, Keala.

Keala: Oh, where you can find me online. I don’t even know how to answer that question.

Brad: Are you on Twitter or I don’t… Everyone’s leaving Twitter now, so maybe not.

Keala: No, I’m on LinkedIn. I’m old school.

Brad: Okay, fine. You’re on LinkedIn. All right, Dave, what about you?

Dave: Yeah, LinkedIn’s fine or dave.Lockie@Automattic.com. You can find me there. I’m really happy to talk to… It’s got to be a conversation. People can have concerns, going to have questions and want have those. So if you’re interested then reach out and let’s talk.

Brad: Yeah, it’s great that it’s out there. I’m sure there’ll be some more discussions at WordCamps. Now that WordCamps are back out there again. And meetups are getting going again too. So a lot of opportunities to get out there and talk to people about this and show it off, which is exciting. This was a fun crypto show on Do the Woo. Thanks for joining us and we’ll see you on the next episode.