One of the earliest technology companies to adopt cryptocurrency payments on its website for exchange of digital and physical content and services, Microsoft has stopped accepting Bitcoin as a payment method on their website.
According to a Microsoft spokesperson, the reason for them halting Bitcoin payments is the volatile nature of the currency in the present. The ban, according to the source, is temporary in nature and would be rolled back as soon as Bitcoin gains stability. Microsoft had first added support for Bitcoin on their website in 2014.
Microsoft’s decision comes at the backdrop of a similar decision by Valve software, the parent of the Steam games marketplace, in December of 2017. Steam had cited a similar reason for removing Bitcoin, blaming high transfer fees as well as its instability.
Fees for Bitcoin transactions have surged in the past few years, attributing to the high value which the currency now commands. This had led to Bitcoin becoming unsuitable as a payment method for microtransactions, where companies have to pay a large part of the total amount as transaction fees. The instability of the currency also poses a concern, as certain drops in the value may entail huge losses for companies accepting Bitcoin as a payment method.
Since their introduction, Microsoft did not allow Bitcoins to be used directly. Instead it asked users to add a predetermined amount of money using Bitcoin and then use that amount to purchase goods and services on their website. This transaction, while subject to various transaction fees, may still cause losses for the company, due to the ups and downs Bitcoin faces everyday.
The great cryptocurrency boom of 2017 has meant that the value of Bitcoins and other cryptocurrencies swing wildly in the matter of minutes. As a rule of thumb, a currency would gain adoption as payment method only if it is stable, something which cannot be said about Bitcoin in the present.
Microsoft is now advising customers to use alternative methods like cards or PayPal in order to purchase goods or services from the Microsoft website. Earlier, Visa had also terminated its partnership with WaveCrest, a prepaid card provider, which rendered many Bitcoin based prepaid cards useless.