The Importance of Onchain Payments

By Parker Lewis

At its core, Zaprite is a bitcoin payments company. However, within the bitcoin infrastructure landscape, payments is typically used interchangeably to imply or as code for “lightning”. Zaprite is not a “lightning” company. While we do support lightning payments, we place just as much focus on onchain payments as we do lightning. 

Relative to lightning, onchain payments are incredibly simple and deliver final settlement far faster and cheaper than the equivalent in the fiat system (similar to a Fed wire). Onchain payments have higher fees than lightning payments, but it is more reliable to send high value transactions onchain. And the fees are still relatively low compared to moving value in fiat and particularly for larger transactions. Plus, every onchain payment has the benefit of final settlement, in a way that is easier for the average individual to achieve via lightning. 

A typical onchain fee might range from a dollar to ten dollars per transaction, possibly even higher in a high-fee environment. But, if a merchant is selling a high-value good or service, fees paid to miners are far lower than what would be charged in the fiat system–$30 for a wire or credit card fees could be hundreds of dollars–if moving a significant amount of value. Onchain bitcoin payments are incredibly efficient and cost effective for higher value transactions, which are common for many of our customers who use invoices or sell higher priced items with our payment links. 

Importantly, it is the easiest way to effect final settlement in the world. And in a way that eliminates the risk of chargebacks to the merchant. Try sending or receiving $3,000, $5,000 or $10,000 through the banking system. Not only is it incredibly frictionful, but it is also costly in more ways than one–on a direct basis in terms of upfront fees but also the risk to a merchant that a transaction might be reversed, which is real but more hidden. True, irreversible final settlement for the equivalent of a few bucks is incredibly valuable to merchants. 

Adding Strike Onchain Payments

Our single most popular connection type within Zaprite is the ability to connect a self-custodial bitcoin wallet like a Coldcard, Trezor, Ledger or Sparrow, which accounts for more transactions than any other connection. That said, our goal at Zaprite is to meet our customers where they already are. Strike is our most popular lightning connection and many of our customers are not yet ready for self-custody, despite being ready to accept bitcoin payments.

Now with today’s release, Zaprite users can connect a Strike account, with the ability to activate both onchain payments and lightning payments with one seamless setup. This allows less technical merchants without hardware wallets to offer an onchain payment option, which is particularly valuable to those with higher-value items for sale, where an onchain payment would be better suited than a lightning payment. 

This also enables merchants with a single custodial account to offer both bitcoin payment options to customers through a Zaprite checkout alongside a fiat connection such as Square or Stripe. By providing both onchain and lightning with options for custodial and noncustodial and with the ability to accept fiat side-by-side with fiat, we’re creating a solution that we believe can meet the needs of the broadest set of businesses–technical and non-technical alike. 

A Spotlight on KC Cattle Co.

Kansas City (KC) Cattle Company recently announced that it had made the decision to make bitcoin its primary treasury reserve asset, noting both loss in purchasing power of the dollar and rising costs in the cattle industry as creating the need to depend on a better store of value. 

The announcement was so well received that the company decided that it would accelerate plans to accept bitcoin as payment, a request many prospective customers made following the announcement. Zaprite was happy to support the team at KC Cattle Co. in getting set up to do just that–sell their beef directly for bitcoin and in a way that would settle in bitcoin.

While the owners have done their research on bitcoin and are familiar with hardware wallets, the team initially made the decision to work with a custodian rather than immediately take self-custody. And, the items that KC Cattle initially plans to offer for purchase in bitcoin are halves of beef (a full half cow), which is 175 pounds ranging from $2,900 to $3,600–amounts which are very well suited for onchain payments.

“It was not a difficult decision to put bitcoin in our treasury or to accept bitcoin as payment.” Paul DeJoe from KC Cattle Company said when discussing the motivation. “Costs in fiat are going up forever for us and for our customers. Costs in bitcoin for us and for our customers are going down forever.”

When we were setting the team up to accept bitcoin, it became clear to all of us that onchain payments would be better suited for half cows, while lightning payments might be better for smaller day-to-day purchases from a webstore. Both were necessary. “Bitcoiners are high value customers for the loyalty they bring. The responsibility you have to this community is that you have to be honest, communicate an understanding of bitcoin and demonstrate the technical ability to seamlessly accept bitcoin.” DeJoe added. “A good example is understanding that both onchain and lightning payments must be available as options. We were testing Zaprite transactions to see if it met the standards we were after and if they could offer the experience we were looking for, worthy enough to connect with bitcoiners as customers. Using Zaprite (connected to Strike) was another easy decision.”

At Zaprite, we always want to meet our customers where they are and to provide the options that cater to their needs, in a way that lowers the bar to accepting bitcoin payments and that ultimately results in more business choosing to do so. In this case, supporting onchain payments was really important, reinforcing that skipping straight to (or only to) lightning payments is not the right solution for many ranges of commerce and that having both custodial and non-custodial solutions available is key to expanding the market for bitcoin payments.

Strike works seamlessly (and flawlessly) with Zaprite and the combination of the two is creating an incredibly valuable platform for individuals and merchants to accept bitcoin. We’re very grateful for our collaboration with Strike, and we’re excited to help enable KC Cattle Company to sell some of the finest beef in the world directly for bitcoin and direct to the consumer. Fix the money. Fix the food. 

Learn More

To learn more, you can find the following links to Zaprite, Strike and KC Cattle Company. If you are interested in accepting bitcoin as payment through Zaprite but still have questions, you can reach out to us using the following contact form submission.