CheapAir Asks Customers For Feedback After Coinbase Shuts Down Merchant Processing Solution

Francisco Memoria
  • CheapAir has been accepting bitcoin since 2013, and is now looking for a company to help it manage cryptocurrency payments, as Coinbase is shutting down its merchant processing solution.
  • The company sees BitPay as an alternative but would like to hear from users. It's also set on adding BCH, Dash, and LTC.

US-based flight aggregator CheapAir, a company that’s been accepting bitcoin payments since 2013, recently published an open letter in which it asks its users for feedback on which cryptocurrency payment processor it should go with to replace Coinbase, as the latter is shutting down its Merchant Tools.

In the letter, CheapAir chief executive officer Jeff Klee notes that the company has been accepting bitcoin payments for a while and plans to keep doing so. Taking into account Coinbase is shutting down its “custodial” solution for merchants, accepting cryptos will be harder.

One of the solutions Klee proposes is using BitPay, whose merchant applications allow for Bitcoin (BTC) and Bitcoin Cash (BCH) payments. CheapAir cites having a “great experience” with the company, and claims integration is largely complete. However, it notes BitPay requires specific protocol-compliant wallets, which could be an inconvenience to users.

Klee wrote:

“We understand what Bitpay is trying to accomplish. The issues they are trying to address – delayed or incorrect payments – are real and were especially rampant back in December and January when transaction volumes spiked. On the other hand, I am not keen on the idea of asking our customers to, in many cases, do more work or change wallets just to be able to transact with us.”

Jeff Klee

While asking for feedback in the letter, the chief executive also revealed it will use the opportunity to start accepting other cryptocurrencies, namely Bitcoin Cash, Dash, and Litecoin. It’s also set to automate some processes to issue refunds faster.

In the document, the CEO revealed that CheapAir needs to convert most of the bitcoins it receives as payments to fiat, because its partners – such as hotels and airlines – don’t accept bitcoin.

CheapAir has in the past revealed accepting bitcoin affected sales in both direction, as they dropped when bitcoin’s value dropped, but surged when bitcoin hit a new all-time high. In a March 2017 press release, Jeff Klee claimed the company saw a 74 percent year-over-year increase in bitcoin sales “over the last six months.”

Coinbase’s move to shut down its Coinbase Merchant Tools in favor of Coinbase Commerce has affected other companies as well. As covered, Reddit recently stopped accepting Bitcoin payments for its Reddit Gold membership program because of the move.

The San Francisco-based wallet and exchange service recently came under fire for suspending WikiLeaks Shop’s account “without notice or explanation.” In response to Coinbase’s move, WikiLeaks revealed it will “call for a global blockade of Coinbase next week as a unfit member of the crypto community.”

Overstock CEO Sells Shares in His Company to Invest in Blockchain Projects

Patrick Byrne, the chief executive officer of Overstock.com (OSTK), has recently lashed out at investors who questioned his sale of 900,000 of his ‘founders shares’ in the company. Justifying his move, he revealed he needed the funds to invest in blockchain projects.

According to Business Insider, Byrne recently sent a letter to shareholders after the company’s stock prices plunged over 21% this week to their lowest since 2012, after he revealed he sold 500,000 of his shares earlier this week.

On Friday, the CEO revealed he sold an additional 400,000 shares, meaning he sold over 15% of his stake in the company. Although Overstock’s shares recovered on Friday, May 17, Byrne’s letter to shareholders was notable. In it, he wrote:

I simply had to supplement my nominal salary with stock sales in order to fulfill personal commitments to invest personally in blockchain projects such as Medici Land Governance, along with a need to meet charitable pledges.

The CEO added that he doesn’t plan on giving such an explanation again, justifying that he owes shareholders “staying within the law and not making decisions based on inside information, not explanations of my life and projects outside Overstock.”

He noted that the “unanticipated stir” caused by his sale was unexpected, and added “I had no idea that shareholders would demand explanations of why and how I might want to use my cash derived from my labor and my property to pursue my ends in life.”

Byrne is notably Overstock’s largest shareholder, and noted he told investors a year ago he would be making “significant sales” to fund different projects, including those related to blockchain technologies and, presumably, cryptocurrencies.

In fact, the libertarian sold 775,000 of his shares in September of last year, before this week’s sale. The stock’s price has fallen roughly 90% from its record high in January of 2018, when Overstock was benefitting from its cryptocurrency ventures and accompanying the cryptocurrency market’s performance.

In November of last year, Byrne revealed he had plans to sell Overstock’s retail business and go “all-in” on cryptocurrencies and blockchain technology. The CEO’s plan would see the company focus on its fully-owned subsidiary Medici Ventures, which has been invested in blockchain-related startups, after selling its retail business.

Overstock's price performance over the last two yearsSource: Yahoo Finance

Byrne has notably been battling short sellers targeting Overstock, as the firm competes with the likes of eBay and Amazon. Financial analytics firm S3 Partners has estimated short bets against it stand at $157 million, or 50% of its float. This makes it more targeted by short sellers than 99% of companies in the U.S.

Despite the company’s performance on exchanges, Overstock has since launched its tZERO security trading platform, and was one of the first companies to pay a “portion” of its taxes using bitcoin in Ohio.