Retailers Must Prepare for Alternative Currency, But Shouldn’t Expect Too Much Too Soon
By: Adrien Nussenbaum, Co-founder and CEO, Mirakl Inc.
Each and every one of the last few years has been heralded in the payment and retail industries as the “Year of Bitcoin” and every one of those years has proved that prediction to be inaccurate. Bitcoin has been the next big thing in payments for a while now, but I’ve only met a few consumers that have actually used it. Bitcoin is still a long way away from being a currency used in the mainstream, but that doesn’t mean it never will be, along with a number of other alterative currencies that are garnering attention.
Bitcoin, as a digital currency, has been on the radar for a while now and is attached to a few positive attributes,including: it bypasses the banks making online transactions easier and cheaper, which in theory is hugely appealing. However, it has also suffered from bad publicity around unregulated security and is used as the currency of choice for the hidden Internet, also known as the “darknet”.
There are also other crypto currencies with a very similar proposition to Bitcoin, such as Dogecoin, Litecoin and Namecoin. Yet Bitcoin’s narrative has been such that it is perceived as the leading alternative currency. A number of retailers have implemented Bitcoin currency but many haven’t seen payment via this method so far, but it is important to be ready because at some point in the game, Bitcoin will move firmly into mainstream use. Below are our four main reasons for retailers to get Bitcoin ready:
Meeting Consumer Needs
Smart retailers will want to make it as easy as possible for their customers to pay them. This means a simple and secure payment process and the ability for consumers to pay via the method that best suits their needs. This has mostly meant PayPal, a number of credit and debit card options and perhaps the ability to pay in a different currency. It will eventually include Bitcoin and by not providing this as a payment method, retailers are in danger of missing out on sales, both now and in the future.
Ease of Going Global
For smaller retailers, international transactions can be more hassle than they are worth, full of red tape and expensive cross-border transaction fees. Bitcoin greatly eases a retailer’s ability to accept international payments by removing those costly fees and making cross-border payments easier and faster.
Lower Transaction Fees
Bigger retailers have scale and are able to negotiate better credit card transaction fees, compared to smaller organizations. Most small retailers pay anything up to four percent per credit card transaction, sometimes with hidden fees on top of that. Bitcoin is significantly lower, reducing credit card processing fees to less than 1 percent.
Moving with the Times
Retail is a competitive sector, and those in it need to be aware of current and future trends. When we added Bitcoin as a payment method on our online marketplace platform, we wanted our customers, irrespective of their model or strategy, to anticipate market trends instead of just reacting to them.
In today’s ever-changing retail environment, Bitcoin and other forms of alternative payments apply to any retailer who wants to be perceived as vital and current even though it may take some time to saturate as a mainstream form of payment. PayPal wasn’t an instant success when it first launched, and although chip and pin is already well established in Europe, it is just catching on (due in part to the recent EMV mandate) in the U.S. as a form of in-store payment. Even if for the moment adding Bitcoin is as much a marketing tactic as it is opening up a new payment method that will be widely used, retailers will quickly learn that it will become a “need to have” instead of a “nice to have” technology.