Square demos first Bitcoin payments on point-of-sale terminal at coffee chain

A U.S. coffee chain shop in Washington, D.C., Compass Coffee, has started to accept Bitcoin via Square’s point-of-sale terminal. Square revealed that customers will be able to purchase coffee using BTV over the Lightning Network through a Standard Square register.

The popular 27-location chain in the U.S. capital demonstrated the new technology during DC Finetech Week. Compass Coffee revealed that customers will use a similar white touchscreen device to those used by millions of small businesses across the nation.

Compass Coffee tests Lightning payments from 10 different wallets

Michael Haft, CEO and co-founder of Compass Coffee, revealed that the firm has already tested Lightning payments from 10 different wallets. He confirmed that all the tests on the wallets were fast, reliable, and went through instantly. 

Maksym Sakharov, co-founder and CEO of WeFi, argued that Bitcoin payments can scale globally before mass adoption in the U.S. He also said the real demand for Bitcoin payments is no longer in Silicon Valley, but in countries like the Philippines, Vietnam, and Nigeria. Sakharov believes that crypto isn’t just another luxury in such countries, but a weapon for survival.

The introduction is the first real-world Bitcoin payment initiative via Square’s newly announced BTC payment system, revealed last Wednesday by its parent company, Block. Compass Coffee announced that merchants will be able to accept Bitcoin payments and convert up to half of their daily sales revenue into BTC, with zero processing fees for the first year.

Pranav Agarwal, independent director at Jetking Infotrain India, acknowledged that BTC payments have been part of the white paper and intrinsic to its earliest positioning as a currency. He also noted that the adoption of BTC payments has been slow, mainly due to the block times, which are approximately 10 minutes.

Lightning Network changes speed of BTC payments

Agarwal added that the Lightning network has enhanced the speed of BTC payments, stating that payment acceptance systems at PoS are now at scale and will usher in a new era of BTC adoption. He argued that typical card payments involve an issuing bank, a receiving bank, and card rails, whereas BTC payments can be self-custodial with just a single enabler, such as Square. He believes Square could unlock new value through loyalty programs, cashbacks, or lower prices because sellers don’t need to absorb high interchange fees.

Despite Square’s BTC initiative, regulatory hurdles still limit Bitcoin payments. Jack Dorsey recently called for a federal tax exemption on small Bitcoin payments. U.S. President Donald Trump also made similar efforts in July through the reconciliation bill, which failed to advance, but Senator Cynthia Lummis said she is still working.

YZ NG, head of product at UR, said Compass Coffee’s Lightning demo shows what needs to happen next for Bitcoin payments to become as seamless as card transactions. He also believes that true parity requires more than speed, adding that UX’s payment system, merchant integration, and clear compliance framework need to align.

Earlier this month, Square cited in its announcement that crypto payments in the U.S. are expected to grow 82% between 2024 and 2026. The firm also revealed that 142 BTC have already been accumulated through early use of its conversion feature, piloted in 2024.

Square, a subsidiary of Block (SQ), integrates BTC into its existing payments and banking ecosystem, aiming to lower the barrier to entry for small businesses to participate in the crypto economy. The firm has also championed Bitcoin payments through retail tools like Cash App and hardware initiatives, such as Bitkey wallet and Proto mining products. He said the goal is to make BTC payments as seamless as card payments.

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