4 Million Merchants Will Be Given the Power to Accept Bitcoin

The merchant activation is a product rollout which is coming out as a near-term service on the merchant platform of Block.
Active merchant accounts are being reported at 4 million are eligible in the new feature of accepting Bitcoins.
It is claiming to be launched publicly within a period of less than one week.

Technical mechanics

Figure 2 shows that payments through Bitcoin are being directed through the Lightning Network so that the payment can be settled quickly. Merchants are being provided with automatic fiat conversion so as to avoid direct volatility exposure. The company has current merchant infrastructure and payment rails on which payment processing and custody are being carried out.

Merchants who choose to do so are projected to save a potential fee of around one up to two percentage points compared to the normal card networks. To model annual throughput the public is using an estimated average point-of-sale transaction size of approximately eighty dollars. Assuming a small adoption rate, hundreds of thousands of merchants will be projected to start transacting significant quantity of Bitcoin within the initial months.

Corporate Assets

The corporate treasury Bitcoin deposits of the company were stated to be in the low thousands of BTC and these reserves are being quoted as a strategic approval of the growth of the merchant products. The implementation is being positioned as a long-term strategic initiative that is linked to overall Lightning and merchant implementation initiatives. Market commentary reported that there were uprisings of the Bitcoin price in the short term, and call-option flow during the announcement. In early reactions, crypto markets and payments markets were being characterized as risk-on, and derivative premiums and futures liquidity were becoming increased.

The take-up rates among merchants are expected to depend on both the region and the regulatory environment, and may also be limited by the local regulations. Fiat on-ramp friction, invoice reconciliation and customer refund are operational risks being pointed out as implementation challenges. The issue of volatility and regulatory scrutiny were being raised as factors that may dampen the enthusiasm of merchants.

The number of adoption and the percentage of merchants who have the feature enabled will be monitored as the main short-term indicator. The set of data related to settlement-flow, Lighting on-chain liquidity and fiat-conversion volumes will also be tracked to identify the earliest signs of a significant merchant adoption. The times of official rollout, availability in regions and product conditions will be monitored to find confirmations or restrictions.