Major online retailers have not been adding Bitcoin and other cryptocurrencies as payment options despite the numerous obvious benefits.
Virtual currencies have been around for some time now. Many of them are promoted as faster, cheaper and easier ways to pay for your everyday needs. The concept of digital money has expanded beyond the limits of a niche thing for computer geeks and cryptography fans. However, you will not often come across a ‘Bitcoin accepted here’ sign on the websites of large online retailers or brick and mortar shops alike.
This state of low adoption often puzzles cryptocurrency community members, as digital money has distinct advantages over traditional means of payments, especially for pure internet-based companies with no physical locations.
For any internet (non-physical) based business, I don't understand why anyone would not accept crypto for payments. It is easier, faster and cheaper to integration than traditional payment gateways. Less paperwork. And reaches more diverse demographic and geography.
— CZ Binance (@cz_binance) February 2, 2019
Low transaction fees and broader geographical customer reach are among the key benefits offered by digital money. While most payment processors like Visa and MasterCard, charge around 3 percent per transaction on top of monthly fees. Meanwhile, Bitcoin transaction fees are much lower, and they are expected to decrease with SegWit and Lightning Network adoption. Some projects focus on instantaneous payment solutions with no transaction fees at all.
Apart from that, Bitcoin and other cryptocurrencies allow merchants to expand their global reach by targeting emerging markets and privacy-focused customers wary of governments and corporations tracking their spending and habits.
Also, cryptocurrency payments are immune to chargeback fraud, which is common on e-commerce platforms. As cryptocurrency transactions are irreversible, customers will not be able to initiate a chargeback with the third-party provider of processing services. They will transact directly with the merchant to settle payments.
However, digital currencies are in the infant stage, and have their disadvantages and growing pains as well. Several concerns hold merchants back from adding cryptocurrency to the list of their available payment options.
First, Bitcoin and all major altcoins are notoriously volatile at this point in time to consider them a viable payment option. No one wants to receive Bitcoin for goods worth $1,000 only to find out that the market value crashed by 20 percent during the day. Merchants have to deal with huge overhead and hedging costs that undercut the financial benefits of accepting payments in digital currencies.
Unclear regulatory requirements and taxation issues are among the most cited reasons why online retailers do not want to accept payments in cryptocurrencies. Also, cryptocurrencies are not considered as a legal tender in many jurisdictions, which may cause problems for public companies.
The last, but not the least argument against integrating cryptocurrency payment options is the lack of demand currently. Fiat currencies still run the world. Companies have to pay their bills and taxes using traditional money, therefore why they prefer their revenues in fiat.
According to the recent Statista research, the percentage of cryptocurrency owners is too small to consider the troubles of setting up the infrastructure for accepting payments in virtual money. Only 8 percent of U.S. citizens reported that they own Bitcoin or another form of digital asset.
Moreover, the overwhelming majority of them consider cryptocurrency as a speculative asset. They buy and hold Bitcoin in hopes to make a profit once the price goes up, which bodes ill for the idea of mass adoption in the future.
Cryptocurrencies have a bright future lying ahead. However, the ecosystem is still in the early stages of evolution. We need more time and more effort devoted to educating people and promoting the idea of digital money as a means of payment.
Once the dust settles and regulators draw the lines and choose a side, the mindset may change from speculation to real-world use cases. Maybe then will we see cryptocurrency mass adoption on a large scale among all online retailers and brick and mortar shops.
Do you think retailers should be more proactive with accepting cryptocurrency as a payment option? Would you pay for your regular goods with Bitcoin? Let us know your thoughts in the comments below!
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