When companies accept Bitcoins, it sounds very gratifying at first: more shopping opportunities, larger network infrastructure and increased trust through the support of well-known companies. The two-sided medal explains why the big players in the race are still pushing down the Bitcoin price. Because Bitcoin acceptance is not the same as Bitcoin acceptance.
What motivates retailers to accept the news spy?
The first step, the dealer’s decision to introduce the news spy as a payment method, is the first step towards becoming a Bitcoin merchant. This provides merchants with similar benefits to the news spy customers:
Fraud prevention. Unlike credit cards, for example, payments cannot simply be cancelled (by fraudsters).
Savings in fees. The fees are negligibly low compared to other payment methods.
New niche market. In terms of Bitcoin acceptance, the Bitcoin continues to be a niche product. And integration as a payment method appeals to the special audience of Bitcoin enthusiasts, which at the same time sets Bitcoin apart from the competition.
Acceptance is not equal to acceptance
Bitcoin payment processing models can be divided into two opposing categories: Native settlement and Bitcoin As a Service. The last term was freely chosen by me.
Native Bitcoin Merchants
Native acceptance is usually what one imagines under normal payment processing for a purchase with Bitcoins: The customer sends Bitcoins, the merchant receives the Bitcoins.
Bitcoin As a Service
I have chosen the phrase “as a service” for this model because merchants who follow this method do not actually accept Bitcoins directly. You only use the Bitcoin for payment, just like the buyer’s credit card, and you don’t want anything else to do with it. In contrast to native integration, the customer pays Bitcoins and the merchant receives money (e.g. dollars or euros). For this purpose, a service such as Bitpay usually comes into play, which takes care of the actual payment processing. As a rule, the online shops themselves do not come into contact with Bitcoins at all; in the end, only the converted money is transferred to them.
Bitcoin acceptance as a price brake
It is obvious that native Bitcoin acceptors (as presented above) do not necessarily have a positive effect on the price. The Bitcoin user pays his purchase with Bitcoins and since the merchant is only interested in Fiat money, true to the motto “Only cash is truth”, the Bitcoins are sold immediately.
The consequence: The price is pushed. The dealers push their Bitcoins, which are converted in the purchases, masses on the market. Since they are primarily interested in receiving cash quickly, the selling price is oriented towards below rather than above the current price.
Only cash is true
Most retailers only accept Bitcoins as a service. So far, this method has more advantages for merchants as it offers security in many ways. The direct exchange into cash saves the trader a lot of effort:
No price fluctuations. The fast sale allows small price fluctuations to be taken into account, but the trader does not risk major losses that would be possible if he kept the Bitcoins longer.
Tax situation. As a young innovation, Bitcoin has not yet officially arrived in many countries and there is a lack of clarity about the tax assessment. When exchanging e.g. into euro dealers can calculate their taxes as usual.
Too small a network. A company has to handle many costs. As an example already the coworkers are enough. So if income is generated in Bitcoin, then employees, suppliers and goods would also have to be paid with Bitcoins. Since the ecosystem is not large enough, however, the retailer cannot avoid exchanging his Bitcoins for Fiat currencies.
The decision to accept Bitcoins only as a service is therefore understandable at this stage. Especially the big companies like Dell rely on this model. However, smaller shops like Bester-Tee swear by native acceptance and (initially) keep the Bitcoins themselves.