Should you accept cryptocurrency in your store?

  • News
  • October 10, 2018
  • Hemma Vara
Should you accept cryptocurrency in your store?

Retailers must keep up to date with technology to enhance customer experience and accessibility. By adopting new technologies, retailers can increase their sales conversion rates.

We decided to talk to a few New Zealand retailers who are early adopters of cryptocurrencies as alternative payment methods. As the market and the regulation of cryptocurrencies improve, cryptocurrencies are on track to become a mainstream means of payment within the next decade.

Halfdan Hansen is the general manager and creative director of Nelson jewellers Jens Hansen. He started offering bitcoin as a payment method a few years ago, and since then has received a couple of bitcoin orders each year. He sees the attraction for ‘bitcoin millionaires’ who would prefer to purchase goods and services in bitcoins rather than converting the currency into dollars. However, he notes that regular citizens can be hesitant to use bitcoin, especially if they can use credit cards.

Hansen’s process for accepting bitcoin payments is simple. Because his website is built on ecommerce platform Shopify, he is able to use Shopify’s integration with payment app Bitpay. Bitpay notifies Hansen when payments are made via bitcoin, and he then fulfills the order to the customer. Bitpay doesn’t charge him to use the app, which is a clear incentive for ecommerce retailers to adopt the technology.  

Jacqui Land of The Log Cottage in Swannanoa is set up to receive bitcoin payments, but has yet to receive one. She intends to market the payment option next year after a new wallet is released. This wallet, or software programme where bitcoin is stored, will make the payment process quicker, easier and more pain-free for customers to use. Land says that being a universal currency, paying by bitcoin is an attractive option for overseas buyers. People from any country can pay for her luxury accommodation without being concerned with bank exchange rates and large currency conversion fees.

We also talked to Jonathan Mafi, director at Spacifx Ltd who provides 3D animation and app development services. Both he and Land acknowledge that the usage of cryptocurrencies has fallen, and activity is quiet for the time being. Land says things will pick up when the crypto market recovers.

Although no one is spending bitcoin at present, Mafi observes that there’s always a surge in use at Christmas. Because massive tech companies continue to invest in crypto, it’s possibly the future of money. Land says that as crypto becomes more mainstream, the customer appeal will broaden.

Mafi says that for traders such as himself, it’s easy to spend crypto directly due to the hundreds of apps that enable it. There are also third party applications that take crypto payments and pay the retailer in the retailer’s local currency. Retailers just have to research to find out which applications suit them.

To see a list of New Zealand retailers using crypto, you can browse and search the Coinmap website. There are also a number of overseas retailers such as Amazon and Expedia who are using crypto. Earlier this year, Microsoft ceased using bitcoin as a payment option due to the volatility of the market, but has now resumed its offering.

For retailers who are on the fence about crypto, if the administration costs are minimal, it could be a way to tap into the ‘bitcoin millionaire’ market. The incentive for consumers will also increase as the crypto market stabilizes, and is recognized as a secure and regulated form of payment.

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