Subway accepts Bitcoin, allowing users to get a sandwich on the Lightning Network

by · November 9, 2022

Subway accepts Bitcoin, allowing users to get a sandwich on the Lightning Network

No, it’s not Groundhog Day. Subway is accepting Bitcoin (BTC), again — but this time it’s using the fast, nearly free Bitcoin Lightning Network.

The world’s largest franchise by number of restaurants is testing Bitcoin payments in three subways in Germany’s capital, Berlin. Subway first experimented with Bitcoin almost 13 years ago in Moscow, Russia.

Over the past few months, Berlin Subway franchise owner Daniel Hinze has recorded over 120 Bitcoin transactions. In an interview with Cointelegraph, Hinze explained his desire “to help Bitcoin become money.”

“Five years ago I started dealing with cryptocurrencies; and for the past two years I have been treating the subject of Bitcoin very intensively. With that in mind, I have decided to do so [Bitcoin] may be the better monetary system.”

Bitcoin is not a popular medium of exchange in Europe, despite the efforts of merchants, retailers and even Lightning-enabled conferences. Hinze has encouraged Bitcoin payments by offering a 10% discount on all footlongs, meatballs and sucookies paid with BTC.

To kick off the promotion, Hinze offered a 50% discount on all Bitcoin payments for one week:

– Around the week there was of course extremely high demand. Our three restaurants were often visited by people who liked to pay with Bitcoin.

German-speaking social media was buoyed by Subway purchases as the hashtag #usingBitcoin took over. Hinze partnered with Lipa, a Swiss-based Bitcoin company, to enable a user-friendly point-of-sale solution.

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Bastien Feder, CEO of Lipa, told Cointelegraph that their mission is to make Bitcoin “basically irresistible to use because Bitcoin is currency.” Lipa equipped the subways with merchant devices that allow customers to quickly scan a Lightning-enabled QR code that enables fast, frictionless, low-cost payments.

Lipa charges merchants 1% for the service, unlike Visa or Mastercard payment rails, which charge double or more. Feder explained:

“It is 2.5% to 4% depending on the contract from the seller. If it’s a business card, it’s 0.5% on top of that. […] And if it’s a foreign business credit card, you’re paying up to 7% and you don’t know until the end of the month.”

The experience of paying over LN is very different from when Subway franchises first accepted Bitcoin payments in 2014. Before the LN arrived, customers had to wait for several minutes.

Miners would mint the next block on the blockchain, with the transaction confirmed by Bitcoin nodes around the world. The process was inconvenient for retail payments due to the wait time as well as the sometimes high fees. With LN, customers get faster settlement times than Visa or Mastercard and lower fees thanks to a peer-to-peer network of payments.

Nevertheless, due to the fact that Bitcoin has for most of its history been a speculative vehicle – save for a few use cases for purchases – encouraging Bitcoiners to use BTC can be a challenge.

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Nevertheless, retail examples are emerging, for example in Berlin or San Salvador. Nicolas Burtey, CEO of Galoy Money, told Cointelegraph that the introduction of Bitcoin in El Salvador was the tipping point for the Lightning Network. He joked that the Bitcoin Act “should really have been called the Lightning Act!”

Related: McDonald’s, Pizza and Coffee Paid in Bitcoin: Plan B for Crypto Payments

Lipa and Hinze expect a steady increase in demand for Bitcoin payments. Feder told Cointelegraph that it is largely due to the “exponentially growing Bitcoin community in Germany, in Switzerland, pretty much all over the world.”

In fact, LN enables communities that are committed to trade, from Senegal to Guatemala and Switzerland. Hinze told Cointelegraph that currently the Subway restaurant only accepts the world’s most recognizable currency, as he and his business partners “firmly believe in Bitcoin.”