McDonalds Now Accepting Bitcoin in Lugano, Switzerland

Fast food giant McDonalds has now started accepting Bitcoin and Tether payments in the town of Lugano after partnering with the Plan ₿ Foundation. Lugano, located in the Italian speaking region of Switzerland, has a modest population of about 64,000 and has recently been becoming a crypto hotspot in Europe. Plan ₿ Foundation is an organization dedicated to onboarding countries onto Bitcoin and stablecoin payment networks and intends for Lugano to be one of the first projects. The foundation has a stated goal to enable over 2,500 merchants to accept bitcoin payments.

The process of payment looks no different from what most are used to. In the case of McDonalds, paying is as simple as scanning a QR code and sending Satoshi’s to the merchant (1 Bitcoin = 100,000,000 Satoshis). Payments go through extremely fast by using layer two solutions like the lightning network. A recent twitter post shows a live transaction being processed in one of the McDonald’s locations in Lugano.

Store of Value to Medium of Exchange

A common criticism of Bitcoin is the fact that not many merchants accept it for products and services. While it’s true that most merchants around the world do not currently accept Bitcoin, it’s relevant to keep in mind the natural process all commodity money have undergone throughout history. The first stage of this process is securing the function of ‘store of value’, or the ability for money to maintain value over time. Store of value is obtained by achieving the properties of scarcity and durability, two things which Bitcoin is extremely good at being that it’s capped in supply and loses no functionality with repeated use.

For the past 13 years, Bitcoin has proven itself as a great store of value for those with a time preference of more than 4 years. Yes, it’s extremely volatile and this comes with part of the risk of trading bitcoin short term. It’s also obtained a market cap of $1 Trillion faster than any equity or commodity in history. Some could argue that it’s still in the phase of obtaining the function of store of value and this tumultuous time in the markets will prove to be a good test of this. All of this said, it’s unlikely that Bitcoin would ever gain wide adoption in the ‘medium of exchange’ function of money before proving itself as a good store of value. Yet, over the past year, we have seen the sparks of what could be the beginning of Bitcoin being used for indirect trade with global merchants.

One of the most eye opening cases for more bitcoin adoption was Jack Mallers speech during the 2022 Miami Bitcoin Conference. Mallers is the founder and CEO of Strike, a Bitcoin application which allows users to purchase and send Bitcoin. In his presentation, Mallers reviewed the history of credit card networks and noted that no real innovation has been made in the payment processing system since 1949. Apple Pay and NFC technology have made things easier but they have not changed the actual way payments are processed: one bank talks to the other bank to make sure funds are sufficient and the service in the middle (Visa, Mastercard, etc.) takes a 3% fee for processing the transaction. Mallers proposed that merchants can save that 3% fee by utilizing the bitcoin lightning network.

Image of bitcoin payment from Jack Maller’s presentation

Merchants would have a clear incentive to use this process of payments if they could in fact save the 3% service fee from using Bitcoin instead of Credit Cards. During the presentation, Jack Mallers announced his company’s partnership with NCR, the world’s largest point of sale provider in the world. In addition, Strike is also partnering with Shopify. This opens a lot of doors for available merchants using Bitcoin rails as a way to process transactions. The beauty of this is that merchants would not be forced to accept Bitcoin… they can have the point of sale provider convert the transaction to dollars before it reaches the balance book.

Conclusion

Bitcoin is a new asset and will take time for the masses to catch on to its added benefits. Places like Lugano and El Salvador are clear early adopters of the technology and time will tell how fast it will spread to other parts of the globe. With that said, there is incentive for merchants to start accepting Bitcoin as a payment network. Below is a list of merchants which, according to Jack Mallers, will begin accepting Bitcoin transactions this year in the United States.

List of merchants accepting bitcoin payments as part of the NCR and Strike partnership via the Bitcoin Conference presentation.