A frequent question asked of me is “As a merchant services sales rep or an ISO, should I go directly to the processor?” In this episode I’ll answer...
Should a Merchant Accept Bitcoin?
Find some guidelines here as to whether a merchant should accept bitcoin. There is no clear “yes” or “no” answer. But sales people should know how to serve clients in this venue. Consider the insights in this episode to help your merchants make the right choice concerning bitcoin. I would love to hear insights […]
Find some guidelines here as to whether a merchant should accept bitcoin. There is no clear “yes” or “no” answer. But sales people should know how to serve clients in this venue. Consider the insights in this episode to help your merchants make the right choice concerning bitcoin. I would love to hear insights from my readers. Please write a comment after this episode.
>>Geography Matters. My merchants in rural Pennsylvania have no need for bitcoin. No one buys with bitcoin here. However, in Manhattan, LA, or Dallas that could certainly be different! Right now, bitcoin is similar to Applepay in that it’s interesting and cool. Knowledge of it is advisable but not significant. If one law can destroy something, it’s not significant. The U.S. government could make one law, and bitcoin would be useless.
>>Business Type Matters. Although bitcoin is not significant in any market, it can be a statement about a business. For merchants in a geography where there is some bitcoin traffic, consider the business type. If a merchant goes after a younger demographic, then accepting bitcoin may make sense. Bitcoin wouldn’t comprise 50% of the merchant’s volume – probably less than 1%. However, accepting bitcoin will set the merchant apart as a cool company in touch with the younger demographic.
Another demographic which is conducive to bitcoin is in the case of a need or desire for privacy and security. When a credit card is used, there is a digital footprint associated with it. There are people who prefer for whatever reason to be anonymous. Our cousin is one of these. There’s nothing illegal or shady involved. He just prefers not to leave a digital footprint. Therefore, he likes the idea behind bitcoin and pushes the use of it.
Here is the punchline though. Merchants accepting bitcoin should convert it to dollars as quickly as humanly possible! Because of the volatility of bitcoin, a thousand-dollar transaction today might be worth only five hundred dollars tomorrow. If that happens, how happy will the merchant be toward the person who set him/her up with bitcoin? Bitcoin offers no guarantee other than the amount at the moment of a transaction. Within the last eight or nine years, bitcoin has had several occasions of dropping 50% in a day’s time. Make sure your merchants using bitcoin are converting to U.S. dollars right away.
In my experience, the claim that bitcoin is saving everyone a lot of money is ironic. Since there is no structure, sales people have to charge merchants too much money to set them up to accept bitcoin. It’s ridiculous! So, who knows what will happen with bitcoin in the next twelve months? Bitcoin has gotten bigger and is worth more money. There should be a bit more stability. However, in the last several months, it has been extremely volatile. Be careful getting your merchants to accept it. You don’t want them holding onto something with that kind of volatility.
I do believe in the next fifteen years cryptocurrency is going to be important. There are many other types of cryptocurrency. Bitcoin may or may not be important to the future. I predict blockchain will be massively important in the next ten to fifteen years. But just like a website build on the internet, bitcoin can’t be predicted, even though blockchain can.
Hopefully the insights in this episode will help you help your merchants make the right choice concerning bitcoin. If this speaks to you, share it with your audience!
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