Understanding the importance of Bitcoin for online merchants is rather easy. After all, Bitcoin is supposed to be the “Internet of money.” There are definitely a large number of Bitcoin advocates in the online world, but what happens when we bring Bitcoin into brick and mortar stores? Some pretty big online retailers, such as Overstock and TigerDirect, are accepting Bitcoin online, but when are we going to see more opportunities to pay with Bitcoin at physical stores? Let’s take a closer look at why Bitcoin makes sense for public places and how this digital currency can be turned into a real payment option.
Why Use Bitcoin in Public Places?
Although some merchants still don’t understand the point of accepting Bitcoin at their physical store, it’s rather easy to make the case for Bitcoin when you’re talking to specific types of merchants. The lower fees of Bitcoin and the lack of chargebacks are two obvious selling points, but which merchants benefit from these perks more than others? If you’ve ever been to a corner store in your local city, you may have come across a policy of not allowing credit card or debit card payments for small transactions. This amount can be as low as $10 in the United States, and merchants in some parts of the world don’t like the idea of accepting credit or debit cards at all. These are the kinds of places where Bitcoin is needed the most. Whether you’re talking about a restaurant, corner store, bar, or other location where transactions tend to be a bit smaller, it’s important to remember that chargebacks and fees are a huge problem for these kinds of transactions. When you go into a convenience store and buy a candy bar for one dollar, more than two thirds of that money is actually going to Visa or Mastercard. Most corner store merchants also don’t like the idea of risking a $20 chargeback fee on a customer who is only buying a soda and a bag of chips.
What About the 10 Minute Confirmation Time?
Many Bitcoin critics point to the ten minute confirmation time as the core reason as to why nobody will ever use Bitcoin at physical retail stores. When it comes to dealing with this argument, it’s important to remember that Bitcoin transactions actually happen instantly. As time goes on, the odds of that transaction being reversed become exponentially smaller. It’s also important to note that the chances of a double-spend goes down quite dramatically once the transaction has been broadcast to a large percentage of the network. Practically speaking, unconfirmed transactions are perfectly all right for merchants. They’re still more secure than credit card or debit card transactions, and many wallets, such as the Mycellium Wallet, are finding new ways to increase the security around unconfirmed transactions for merchants.
What Needs to Happen?
The main reason that we don’t see Bitcoin acceptance as places like Walmart and Tesco right now is because the demand is simply not there. Although these kinds of large retailers could save a bit of money for customers who actually want to use Bitcoin, the reality is that there simply aren’t that many people who want to use Bitcoin at this time. Accepting Bitcoin is helpful for attracting that new, niche demographic to a particular store, but the fact of the matter is that demographic is still rather small.
The main thing holding back Bitcoin merchant adoption right now is the same thing holding back Bitcoin adoption in general. People don’t like the idea of holding onto bitcoins due to the volatility involved with the cryptocurrency, but the price has slowly become more stable over time. Regulatory clarity, bitcoin adoption as a currency in developing nations, and new applications built on top of Bitcoin are three of the main things that will continue to lower the volatility of bitcoins over time.