Excitedly, the cannabis seed and services company, in partnership with BTCPay, has published a case study on using BTCPay to facilitate payment processing for underserved and blacklisted industries.
One of Bitcoin's most important use cases is, as many users of a particular privacy wallet say, “to make transactions they don't want you to make.” Resistance to censorship. Financial institutions, and governments indirectly through the coercive influence they exercise over those institutions, have a significant degree of control over society and the economy through their ability to deny people access to financial services and the ability to transact in markets they consider unacceptable.
The cannabis industry has notoriously gotten the short end of the stick in this regard since it first became a legal business at the state level in the United States. Major banks won't allow cannabis businesses to hold accounts with them, most payment processors won't offer services to them, they're either forced to deal in cash only or payment processors with very high rates still might cut them off at any moment.
Strainly is a company serving the industry since 2016, providing cannabis strain seeds, cultivation equipment, plant cloning, pollen for breeding, and other services. By the way, all of these products are legal even at the federal level in the United States, but the companies offering these products are still subject to financial exclusion.
As a result, Strainly has pioneered the use of BTCPay Server as a payment processing solution for sellers in the industry. After a long period of using their own services, they decided to open the integration to facilitate a peer-to-peer market among their users. By leveraging the BTCPay server on the backend, they are able to provide sellers with a server to register their non-custodial wallets for payment processing and open up the use of Bitcoin as a payment mechanism to other participants in the legal cannabis industry. BTCPay's withdrawal payment system supports easy refund functionality for sellers and customers, while at the same time protecting sellers from chargebacks inherent in the legacy financial system. It also facilitates payments between customers and vendors in a way that does not expose the private financial information of either side to the other.
In exchange for running the infrastructure to facilitate this market, Strainly collects a small fee on each exchange. After initial testing where this fee was paid on top of the seller's invoice by the buyer, they noted that this arrangement created a high degree of friction for buyers in the market, many of whom had no experience handling Bitcoin before using it. In response, they rearranged the user flow in order to have the seller pay the marketplace service fee, leaving buyers with a single bill for the seller's costs and shipping fees.
This change has significantly reduced friction among end users who have no previous experience using Bitcoin. Strainly currently processes 600-800 invoices per month, with a settlement rate of 80% on invoices generated. These kinds of success rates clearly show that they are doing something right when it comes to making using Bitcoin simple and intuitive for everyday people. This case study is a perfect demonstration of how Bitcoin functions as the censorship-resistant payment infrastructure it was designed to be. The full case study is available for download here.
