Right now, there is a growing minority of people who are enthusiastically advocating the use of Bitcoin for online trading. Don’t know what Bitcoin is? You are not alone.
Bitcoin is a new digital currency frequently known as “cryptocurrency” and works as a peer-to-peer distribution system where people are able to send money worldwide almost instantly for very low transaction fees. These benefits have attracted business and consumers to the currency. Yet, recent news stories highlight that the currency is also appealing to cybercriminals for many of the same reasons.
Some businesses use it for trading, but no major brand or retailer has yet to take on this payment method.
I have noticed that some people are advocating that Bitcoin is an easy option to streamline an ecommerce website to accept several currencies at once. But why, when you already have widely accepted and trusted currency, does the consumer really want another currency?
The currency of the country in which a company is based is, of course, the first choice for ecommerce providers. Most online retailers are expecting to sell to their local market and want their consumers to pay in a currency they understand and trust.
As things stand, I fail to see why Bitcoin is that beneficial to consumers and ecommerce. Credit cards, direct payment or other methods work well and cost the consumer nothing. I do not see why the average consumer will want to use a new digital currency. And if the consumer does not see a compelling reason to adopt it, then established retailers will not adopt it either.
At Spreadshirt we are active in 17 countries; we offer nine languages and eight different currencies each matching their local domain. This is because consumers like to be able to see exactly what something will cost (and this is easier to evaluate in their own currency). Our biggest markets are the Eurozone and the USA, but we still need to offer niche currencies too. The local consumer needs to match the value of what we offer them against what they can buy locally both online and offline.
As a mass-market retailer I have tried to find five possible reasons why the average consumer might want to use Bitcoin, and to explain why it does not make a lot of sense just yet:
1) Taking out the middleman? In this case, this approach only has an advantage if the consumer gets a lower cost or cares about “sticking it to the middle-man.”
2) Speed of transaction The average consumer does not care. “I make a payment, I get my product. I guess the money gets there in the end.” If you are transferring large enough amounts and the transaction takes over 24-hours, then yes this may be of interest. But this has only happened twice in my life when I was buying or selling a company, and simple methods exist to deal with it, this is not a mass-market concern.
3) No regulating tax authority? Most consumers pay income tax from salary and buy goods from VAT paying retailers. Perhaps some self-employed people might like the idea, but then the companies who pay them still have to declare payments. So the likelihood is only tax avoiding rich or criminals will care.
4) E-wallet? This idea I like, but I have seen plenty of evidence that people are using PayPal as a wallet. And in the last decade there have been 1000s of attempts to get to critical mass on e-wallets. The people who win here will be mobile phone billers who can use the phone as a wallet and have the customers already. I bet on Vodafone or O2 cracking this model, over Bitcoin.
5) Accepted globally? I have travelled to over 40 countries and never had a problem with Visa or MasterCard. For personal reasons I have had to send money to Tanzania, Ethiopia and Cambodia but standard cheap banking systems have never been a problem. So this is only useful if you are trying to do business in very strange places. Again, this is not a mass-market issue.
I receive 100s of requests a month from consumers, and our ecommerce platform sellers, wanting Amazon checkout and payment. We have yet to have one request for Bitcoin. If Bitcoin is not mass-market then it will be of little use to ecommerce retailers and platforms.
The internet is a funny place however, where new ideas do catch on. My job therefore is to try and cover as many of our customers’ needs as possible, so if enough people say they want to use Bitcoin in the near future, then we will adapt and find ways of taking payments!