Strainly, a cannabis seed and services company, in partnership with BTCPay has published a case study on the use of BTCPay to facilitate payment processing for underserved and blacklisted industries.
One of the most important use cases of Bitcoin is, as many users of a certain privacy wallet would say, “To make the transactions they don’t want you to make.” Censorship resistance. Financial institutions, and indirectly governments through the coercive influence they exert over those institutions, hold a large degree of control over society and the economy by having the ability to deny people access to financial services and the ability to transact in markets they deem unacceptable.
The cannabis industry has notoriously gotten the short end of the stick in that regard since it first became a legal business at the state level in the United States. Major banks will not allow cannabis businesses to hold accounts with them, most payment processors will not offer services to them, they are either forced to deal with cash only or very high priced payment processors that still might cut them off at a moment’s notice.
Strainly is a company that has serviced this industry since 2016, providing seeds of cannabis strains, growing equipment, plant clones, pollen for breeding, and other services. All of these products by the way are legal at even a federal level in the United States, but companies offering these products are still subject to financial exclusion.
As a result of this, Strainly has pioneered the use of BTCPay Server as a payment processing solution for vendors in this industry. After a lengthy period of use for their own services, they have decided to open up their integration to facilitate a peer-to-peer marketplace amongst their own users. Leveraging BTCPay Server on the backend, they are able to provide vendors with a server to register their own non-custodial wallets for payment processing and open up the use of Bitcoin as a payment mechanism for other participants in the legal cannabis industry. BTCPay’s pull payment system even supports frictionless refund functionality for vendors and customers, while simultaneously protecting vendors from chargebacks inherent in the legacy financial system. It also facilitates payments between customers and vendors in a way that does not expose either side’s private financial information to the other party.
In exchange for operating the infrastructure to facilitate this marketplace, Strainly collects a small fee on each exchange. After initial testing where this fee was paid in addition to the vendor invoice by the purchaser, they observed this arrangement created a high degree of friction for buyers on the marketplace, many of whom prior to using it had no experience with Bitcoin. In response, they rearranged the user flow in order to have the vendor pay the marketplace service fee, leaving purchasers the single invoice for vendor costs and shipping fees.
This change has led to a huge reduction of friction for end-users with no prior experience using Bitcoin. Strainly is currently processing 600-800 invoices a month, with an 80% settlement rate for created invoices. These kinds of success rates clearly demonstrate they are doing something right when it comes to making Bitcoin use simple and intuitive for regular people. This case study is the perfect demonstration of how Bitcoin can function as the censorship resistant payment infrastructure it was designed to be. The full case study is available for download here.
Source: bitcoinmagazine.com