It comes as no surprise that online retailers are constantly looking for ways to lower their costs and to differentiate themselves from their competition.
But what is surprising is that they tend not to think of payments processing as an area where they can do both at the same time. However, by accepting payments in the digital currency bitcoin, an increasing number of retailers are achieving just that.
“As a digital currency, bitcoin has a number of advantages over more traditional forms of payment,” says Akif Khan, vice president of solution strategy at Bitnet, a bitcoin payment processor. “First, it is typically cheaper than accepting payment by card, so retailers lose less in fees and boost their margin.
“Second, the costly headaches of card fraud disappear with bitcoin, as there is no chargeback mechanism and all consumer payments are final. And third, accepting card payments across country borders is still a costly process, but bitcoin is borderless and enables a payment from anyone, anywhere.”
At present, companies such as Dell, Expedia, Microsoft and Time all accept payments in bitcoin. Consumer adoption is relatively low compared with cards, but growing steadily, as evidenced by the surge of bitcoin use on Black Friday and Cyber Monday when a total of $296m (£195m) was spent globally across the bitcoin network.
“For retailers considering bitcoin it’s key to work with a processor who protects them from any volatility in the bitcoin price during the payment process, and who can convert the received bitcoin into a more traditional currency to keep things simple for the retailer,” says Khan.
As adoption grows, retailers should focus on understanding the digital currency space to be ready to meet consumer demand.
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